This article was first published in BioScience Today
The pharmaceutical and healthcare industry is often accused of misusing IP to extend exclusivity and delay reasonably priced access to life saving technologies. The recent pandemic has focussed attention on the industry as it works to develop vaccines, diagnostics, and treatments, and the role of IP rights, particularly patents, in those developments is being scrutinised. In early April 2020 a group of over 140 organisations and individuals wrote to the World Intellectual Property Organization (WIPO) asking that they ensure that IP regimes support, rather than impede, efforts to combat Coronavirus.
Usually access to IP rights is obtained by requesting a licence from the rights owners’ then decide whether to grant that licence, and on what terms. However, when focussed on developing products to meet an immediate need, searching for third party rights to license may be considered an unwanted complication. Although unwanted, conducting searches can be valuable, helping to avoid surprises, permitting design changes to avoid risks, and providing insights into other possibilities.
For some technologies in which access to multiple patent rights is needed to create a viable product the creation of a patent pool for those rights can facilitate matters. Patent pools are agreements in which parties pool their rights and license them as a package. The rights owners can agree terms under which they license one or more rights to each other, or to third parties, or they can assign or license rights to a central “entity” which manages the rights making access to the pool of rights more straightforward. The pool can reduce the number of licences required, making it easier to deal with multiple owners and handle royalties.
Patent pools in medicines are not new and have been proposed in response to past emergencies. Following the severe acute respiratory disease (SARS) outbreak there was a rush to sequence the SARS genome and apply for patents and a patent pool was proposed. However the outbreak ended sooner than expected and the pool was never established. In April 2020 the Medicines Patent Pool, a United Nations-backed organisation working to increase access to, and facilitate the development of, life-saving medicines, temporarily expanded its mandate to include technologies that could contribute to combatting COVID-19.
The above mechanisms rely upon rights owners being willing to grant access upon reasonable terms. Willingness to grant licences depends upon many factors, including publicity (positive or negative). Companies can be encouraged to grant licences and public perception can be sufficient for companies to give up certain rights altogether. Recently, following public criticism, Roche decided to share a proprietary formula for part of its coronavirus testing kits, and Gilead Sciences renounced an orphan drug designation in the US that granted special status to its potential coronavirus treatment remdesivir. However, public perception may not be sufficient and sometimes companies may be unwilling to grant access to their rights.
Patent laws do provide mechanisms to compel patent owners to grant access. The granting of such compulsory licences is a sensitive issue. It breaches the deal under which patent applicants disclose their invention in return for the potential to secure a period of market exclusivity. Although a compulsory licence should provide the patentee with a “reasonable royalty”, there is no compensation for the loss of control over the invention.
However, where a specific patent is preventing adequate supply of a critical product, the use of compulsory licence provisions might be exactly what is required and Francis Gurry, director-general of WIPO, has said that during an emergency, health and safety “trumps everything”.
In response to the pandemic some countries have amended their IP laws to provide enhanced ability to grant such licences. For example Canada’s Parliament, as part of the COVID-19 Emergency Response Act, has added health emergency compulsory licensing legislation to Canada’s Patent Act.
Companies voluntarily licencing rights is preferable as it allows greater control and encourages sharing of associated rights. However, it is reassuring to know that there are options to force licences to be made available if necessary.