There’s a possible storm brewing between governmental “powers that be” and drug patent holders, particularly big pharma. With most of the world on hold as we work our way through month two of the coronavirus-related shutdowns, some countries are invoking rarely used powers to ensure they have the drugs they deem necessary to wage war against COVID-19. Many of these powers revolve around the suspension of various patent protections normally granted to a patent holder, which can make the import or manufacture of generic versions of certain drugs easier.

Emergency Powers

“In times of crisis many governments around the globe resort to emergency powers to fight drug supply shortages and even speed the production of vaccines, all in the name of public good,” explains Eric Ludwig, ESQ, an experienced, US-based trial lawyer with an extensive background in intellectual property and business litigation around the globe. “The United States, however, tends to focus on penalizing profiteering from such crises, boosting domestic production of critical supplies, and incentivizing innovation—all the while leaving intellectual property rights intact.” 

For example, under the United States Defense Production Act (which dates to 1950 and the start of the Korean War), the U.S. President is granted sweeping authority to “direct private companies to prioritize orders from the federal government … to ‘allocate materials, services, and facilities’ for national defense purposes, and to take actions to restrict hoarding of needed supplies.” During the current crisis, President Trump has used the DPA to increase domestic production of critical health and medical supplies, such as ventilators and masks, while also attempting to curb hoarding and price gouging. For the most part, IP rights have not been impacted.

Should the COVID-19 crisis worsen or extend beyond what our leaders and/or the populace deem as reasonable, what might the future hold in terms of additional orders? Stay tuned.

Voluntary Relaxation of Rights

In the meantime, many are calling for big pharma to voluntarily relax enforcement of their patents in the United States and abroad for the expressed purpose of collaborating on the development and production of therapeutic drugs and vaccines to fight the coronavirus. Several companies have already responded:

• US-based AbbVie announced that it will not enforce its patents on Kaletra, an HIV-related medicine that has shown promise in fighting COVID-19.
• California drug-maker Gilead agreed to waive orphan status for remdesivir, a drug which is undergoing various trials around the world as a possible treatment for the coronavirus. (Under US law, orphan status grants seven years of market exclusivity for makers of drugs designed to treat diseases affecting fewer than 200,000 people.)

Compulsory Licensing

Absent the voluntary relaxation of patent rights, there are mechanisms governments can invoke to permit the legal manufacture and sale of generic versions of drugs under certain conditions. Known as “compulsory license of patents,” under the Word Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), member countries can, in times of national emergencies, grant companies the ability to produce a patented product or process for domestic use without the consent of the patent owner.

Compulsory licensing of patents has been invoked several times in the past, most notably in 2012-2013 when India authorized the manufacture of a generic anti-cancer drug that it said German drug-maker Bayer had not made readily available to the market at a reasonable price. There’s a good chance should the current pandemic linger, make a return this fall (as some have predicted), or should big pharma fail to make certain medications available or affordable, compulsory licensing will come back into play.

Complexities Call for Expert Guidance

“While we would like to think there are a great number of certainties in life, and that one of those certainties is that the rights of patent holders are sacred, recent actions reinforce the notion that the only true certainties, as the old saying goes, are ‘death and taxes,’” says Ludwig. “If you are a drug manufacturer or involved in the production of medical equipment and supplies, or are planning to get involved in these areas, you would be well advised to explore your intellectual property rights fully. A qualified and experienced IP lawyer can conduct the due diligence necessary to ensure you are not infringed upon and that you do not infringe on the rights of anyone else.”

Protect Your Product. Your Business. Your Dreams.

Contact Eric Ludwig today for a one-hour consultation to discuss whether you need to apply for copyright, patent, and/or trademark protection in the United States or elsewhere.
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