IP rights in the COVID-19 pandemic

In brief 4 min read

As the race for a COVID-19 vaccine and treatment continues, norms around IP use are being upended. Innovators need to navigate the use of their IP in this current climate.

Key takeaways

• Many pharmaceutical companies and research institutions are working on responses to the COVID-19 pandemic based on existing patented technology or which will generate new intellectual property.
• Some IP rights holders have decided to suspend or not enforce their IP rights, at least while the search for a vaccine and treatment continues.
• This involves a delicate balance between the inherent incentive IP protection provides to innovate, and the urgent need to respond to the global risk of COVID-19 unhampered by the risk of IP infringement.
• Australia, like many countries, has compulsory licence and Crown use provisions in its Patents Act.
• While there is much speculation that the global pressures facing governments could lead to those provisions being invoked, that seems an unlikely response, at least for Australia.
• Not only has the COVID-19 pandemic encouraged unprecedented collaboration, pro-active efforts to repurpose known compounds as potential treatments, and a willingness to suspend IP rights, the Federal Government is taking a facilitative approach, as it has in previous pandemics.

Who in your organisation needs to know about this?

Boards, management, legal counsel and patent attorneys of innovator companies and institutions working on COVID-19.

IP in the COVID-19 pandemic

Pharmaceutical and medical supply companies are prioritising the development and manufacture of vaccines, therapies and medical supplies to combat COVID-19.

A number of known anti-viral therapies are being tested as potential treatments. For example, Abbvie has reported that it is supporting clinical trials of its HIV treatment Kaletra for use as a potential treatment for COVID-19, and Gilead Sciences' investigation of the use of its antiviral remdesivir has been widely reported. While it is settled that new uses of known compounds are patentable in a number of jurisdictions, including Australia, Gilead has announced that it will rescind the orphan drug designation it was granted for the investigational antiviral remdesivir and reports indicate that Abbvie will not enforce global patent rights on all formulations of Kaletra. In addition, Medtronic announced that it is publicly sharing the IP for its ventilators to help doctors and patients dealing with COVID-19.

With researchers collaborating at an unprecedented level, and the Federal Government taking a facilitative approach by expediting or removing regulatory hurdles, as it has done in previous pandemics, it seems unlikely the Commonwealth will use the largely untested machinery of the Patents Act to force outcomes that can be achieved by other means.

Is there a risk of compulsory licences and Crown use?

It would take an unlikely set of circumstances for the Federal Government to invoke the compulsory licence and Crown use regimes available to it under the Patents Act. We discuss those provisions in detail in IP reform update – demise of innovation patents, and government powers in a crisis.

In summary, the compulsory licence provisions1 give the Federal Court the power to order a patentee to grant a licence to the applicant to exploit the invention relevantly where:

• a patentee is not exploiting the invention to meet demand in Australia on reasonable terms;
• the patentee has given no satisfactory reason for failing to do so;
• the applicant has tried for a reasonable period, without success, to obtain authority from the patentee to exploit the invention on reasonable terms and conditions; and
• it is in the public interest to grant a compulsory licence.

Similarly, the Crown use provisions² allow the Federal Government or state governments to exploit a patented invention for Crown purposes (ie services of a relevant authority primarily funded by the Commonwealth or state or territory, and will likely include healthcare services) without the risk of infringement where the relevant authority has tried without success to obtain a licence on reasonable terms or in an emergency (by-passing negotiation).

A compulsory licence has never been granted in Australia, and the Crown use provisions are rarely used. The Federal Government will, no doubt, be committed to ensuring that demand for any COVID-19 vaccines and treatments is met. However, the current approaches taken by the Government and innovators suggest that this can instead be achieved through agreement on reasonable terms, rather than through the courts.

While the compulsory licence and Crown use provisions are not risk free, they are fairly blunt instruments in the current fast-paced environment of this pandemic, and would likely be last-resort measures. It seems more likely that the Federal Government would use its powers under the Biosecurity Act 2015 (Cth) to determine any requirement or make any direction necessary to respond to the pandemic before resorting to Crown use or compulsory licensing provisions.

Actions you can take now

• Before entering into any collaboration relating to the development of potential COVID-19 vaccines or treatments, consider whether you will need to contribute any of your IP, and what IP might be generated.
• Consider the terms on which you will make any of your IP available to the collaboration, whether it be freely available or for certain purposes, under certain conditions or for a certain duration.
• In dealings with the Government, be aware of the risks associated with compulsory licences and Crown use in Australia, while noting that they are rarely invoked.