April 9, 2020

“Covid-19 and Patents” an article by Alexandros Lioumbis

There is a lot of debate regarding the role of patents in the fight against the Covid-19 pandemic. Last week, distinguished LSE Professor Elias Mossialos suggested that countries should buy all Covid-19 related patents so that any Covid-19 related vaccine, drug, test becomes available to authorities without delay and without complications. This was reported today by Reuters. The FT also released an article suggesting that big drugmakers are under pressure to share patents against Covid-19.

Although the idea is appealing, well reasoned and fact based, there is one fundamental question that is far from obvious to answer: Which patents?

There are various aspects that need to be addressed to answer the question:

1. Technological Aspects, 2. Territorial Aspects, 3. Application Status Aspects, 4. Legal Framework Aspects

1. Technological Aspects:

Every week new drugs are proposed or old drugs are proposed to be repurposed. Similar is the situation with vaccines. Thus the technological landscape of the patents widens every time a new drug or vaccine trial or test is announced and narrows every time a drug or vaccine or test proves ineffective. Would countries buy patents as announcements are made or when results are proven? As far as I know, there is no comprehensive Covid-19 related technology database, let alone patent database. In fact, there is still no definitive treatment or vaccine but largely speculative publications (albeit promising in many cases), some referring to trial or pre-trial data, or some simply speculating based on population dynamics. Assuming the patents were there and a country (or EU) would want to buy those patents, with what criteria would they make the choice?

2. Territorial Aspects:

Not all patents have been extended for patent protection to all territories. On one hand, and as a rule of thumb, few patents are extended to many territories (vaccines would typically be among those), most patents are extended to offer protection in only some territories (namely the US, a few European countries and possibly China, Korea and Japan). Some territories, on the other hand, (e.g. African countries) may have very few patents in force. Assuming a country would want to buy those patents, they would need to identify which patents have been validated in their respective territory and proceed accordingly. For some countries this may be a daunting task (assuming large numbers of patents are yearly validated in that country) but for other countries it could be very simple (assuming a very small number of patents are yearly validated in that country). Regarding EU, there is no EU-wide patent. There are patents validated in EU states and, indeed, some may be validated in most, if not all, EU states but, in Europe, each patent is valid (or not) on a country-by-country basis.

3. Application Status Aspects:

The concept of a “patent” is many times misleading. There are granted patents (which deserve to be called “patents”) with a clearly defined scope of protection, there are published patent applications that are at various stages of prosecution (which deserve to have a “patent pending” status) with an indicative scope of protection and there are yet unpublished patent applications (where it is unknown what scope of protection they may confer if ever granted). Patent applications are secret for 18 months. As the pandemic only started a few months ago and moves fast, it is unlikely that any new patent application filed after the pandemic outbreak would have been published by now, unless the companies developing the drugs/vaccines/tests release voluntarily the content of the applications they had filed in the meantime. Only in very few cases would already granted patents (thus filed years ago) be relevant. That could, for example, be the case for some generic test equipment patents or for patents of some drugs that work generally for coronaviruses and not just for the particular virus (SARS-CoV-2in question.

4. Legal Framework Aspects:

Many countries have “compulsory licensing” legislature in place. For example, the EU has Regulation (EC) No 816/2006 of the European Parliament and of the Council of 17 May 2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems. Assuming that a country needs to “acquire” a patent and the patent proprietor is unwilling to license or sell, the legal framework is in place and it is up to the country to activate it. Thus, there is no need to “buy” the patent. All a country needs to do is to enforce a compulsory license. Chile, Israel and Equador have already taken such steps. However, would such frameworks work for e.g. patents for devices for rapid testing or are they limited to pharmaceutical products such as drugs and vaccines?

So, again, “which patents”? How can a country decide which patent is useful or necessary at any given moment? Assuming a sweeping process is applied and all patents that could even remotely relate to Covid-19 are to be considered, what about the unpublished ones? And how would such a process avoid favouring some players, e.g. “big pharma” against smaller players?

In other industries, when a new technology emerges, standards are created (think for example the 5G related standards in telecommunications) and companies are requested to publicly declare their “standard-essential patents” which are then offered for licensing under FRAND terms. How could something similar happen with, e.g., Covid-19 related patents? An international organisation (for example, the WHO) could create and monitor (I would even dare say should create) a “Covid-19 standard” and request all patent holders and applicants to declare their “Covid-19 standard essential” patents to the monitoring body. Then, all relevant (“standard essential”) patents would be offered under FRAND terms to third parties or countries for licensing.

Such standardization processes typically take years or even decades, which would not be practical during a pandemic. How could this be expedited? With today’s latency of international organizations it might appear improbable, if not impossible. A more efficient way would be for patent owners to create “patent pools”. The President of Costa Rica made such a proposal in a letter to WHO two weeks ago. A patent pool is an agreement between two or more patent owners to license one or more of their patents to one another or to third parties. If compulsory licensing is seen as a threat by patent owners, as has been done before, then patent owners could be incentivised to participate in such patent pools that would collectively grant licenses to third parties (e.g. countries) saving time and resources to all parties.

What would trigger the acceleration of such processes? Again, compulsory licenses. If one or more EU countries would move fast to grant compulsory licenses for at least the more promising vaccines/drugs/tests then the patent owners would be more than willing to cooperate or to take part in patent pools. But to arrive to compulsory licenses relevant patents need first to be identified.

What I propose is for all countries to set up task forces (either governmental or inter-governmental, e.g. at EU level or even ideally at WHO level) with scientists and patent professionals to identify the patents, prioritise the patents dynamically and provide each country regularly with advice as to which patents need to be licensed, either voluntarily, or under FRAND terms or under compulsory licensing terms. Why licensing and not straightforward acquisition? Because that would amount to compulsory purchasing. Compulsory purchasing would amount to expropriation and is not anticipated by international patent law, contrary to compulsory licensing which is present in international laws and treaties, especially for public health emergencies. A discussion about buying the patents could be misleading, whereas the effect of compulsory licensing is exactly the same and downright legal.

We should not forget one thing: Patents give their owners legal rights in exchange for publishing an enabling public disclosure of the invention. It is NOT in the interest of the scientific community to enforce measures that would make companies reluctant to file patent applications out of fear of widespread compulsory licenses or, even worse, expropriations. And obviously, companies should not be led to refrain from research fearing that their ROI would not justify the investment if they aren’t going to be compensated at least under FRAND terms.