“PATENTS AND COVID-19: the private sector’s response to a public need”
When a country approves a patent, it grants the owner an exclusive right of exploitation for a limited period (20 years in Argentina) for new and highly inventive developments. A great deal has been said about this monopoly and its supposedly disvalued implications to society as a result of the intellectual protection of COVID-19 vaccines. From this point of view, the “waiving of patents” is being proposed as an efficient public policy to solve the global health crisis. However, these arguments lack legal and factual grounds.
Undoubtedly, the pandemic created unprecedented bewilderment that seriously impacted on all social layers and socioeconomic realities. The seriousness of the situation requires urgent and extraordinary measures.
It is not less true, however, that we have already lived through health crises, like the anthrax events after 9/11. These memories awaken in those of us who lived through them, similar sensations to the ones we are experiencing now. In those cases, patent protection was also a topic of discussion. [1]
With more than 30 years of experience in Intellectual Property Law, advising inventors and research teams, I feel confident enough to say that the current crisis can be overcome without damaging the patent system. The solution is actually the opposite to a waiver of patents: showing the world that, thanks to private and public efforts, it was possible to research and develop treatments against the virus in record time. The results were vaccines of diverse origin that showed astonishing effectiveness rates for the speed in which they were developed.
Obtaining a patent is a complex and expensive process. The promise of having exclusive rights over an invention gives companies the incentives to take risks by researching, developing and bringing products to the market. Specifically, the holder of rights can charge a price for a limited time to recover that investment. We should not overlook the fact that this right is for a limited period. This ensures that, once a patent is exhausted, others can make the product.
Another key point is that these exclusive rights are granted territorially. In other words, the owner of the invention must file the patent application in each country where he/she wants to obtain protection, having for this purpose a 12-month priority period established in the Paris Convention (Law No. 17,011).
Even with the time limits and the territoriality restraints of patents (without also considering the rigorous essential requirements of patentability, such as, absolute novelty, inventive height and industrial application, that are not tackled in this article for exceeding the matter at hand), we find companies and inventors that choose to follow this path.
In this sense, the future should not be anti-patent, but supportive of a solid system of invention protection. Patents have already proved to be absolutely necessary to create the right atmosphere to continue investing in research and development, not only to reduce the undesired effects of the current vaccines, but also to improve the effectiveness of the existing ones and be prepared for future mutations of the virus as well as other illnesses.
It is not necessary to issue a political declaration in order to take advantage of the exclusive rights temporarily granted by a patent. Rather, it requires putting into place the existing mechanisms in almost every patent law across the world. If that is the decision, the solution already exists and can be found in the Patent Law itself.
Specifically, the international and local patent system have a catalogue of safety valves that allow governments to intervene during a health crisis, before the expiration of the exclusivity term granted to the patent holder to exploit its invention. One of the most important resources are the “compulsory licenses” provided for in our Patent Law (Law No. 24.481, Decree No. 260/96) and in the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS, Law No. 24.425), which have been applied in a great number of countries on other opportunities with the aim of giving third parties access to the patented technology under reasonable market conditions.
In a sense, they are like any other license, but they are mandatory due to emergency reasons, and imply a transitional period in which governments can allow private companies or governmental institutes to produce the invention. Whatever the case, compulsory licenses always involve reasonable compensation to those who invested time, money and efforts in achieving the patent.
Here we find a turning point which is that “waiving patents” seems to indicate that this knowledge will be made available to everyone without paying for the rights that were granted to the relevant holders. It should not, in any way, spread the idea that there are inventions that must be released without recognizing their owner a fair price for such disclosure.
It is precisely the role of the State to grant access to the vaccines that everyone needs (in my opinion, only to those who cannot get them by their own means) and to create the economic conditions to make prices affordable. The negotiation of compensations for licenses should be a tug of war. On the one hand, to try to ensure the lucrative interests of the companies that invested in developing the vaccines and, on the other, to grant access to health and improve health conditions.
We do not need to “waive patents”, we rather need more public and private pharmaceutical laboratories in condition to access licenses – compulsory or freely negotiated – for the vaccines currently developed and the ones that will need to be developed in the future. To that end, we simply have to rely on the mechanisms that the legislation makes available.
Notwithstanding the foregoing, it should be kept in mind that vaccine technologies are complex and involve multiple patents, trade secrets, and technical knowledge. Thus, a compulsory licensing system might not even be enough to produce vaccines without the explicit consent of their inventors since it should cover not only patents but all related intellectual property.
It is clear that the exchange of know-how cannot be imposed on those who spent months in laboratories researching, studying each possibility and learning from their own mistakes. We can take the case of the Moderna vaccine, which in October 2020 announced that it would not enforce intellectual rights over its vaccine tests, but in practice the use of those rights has low impact without the necessary collaboration and knowledge transfer.
Even if a regime of compulsory licenses could be promoted for this type of products, it would ruin the relationship between States and laboratories. Consequently, the bridges of dialogue and collaboration that have been built up to now, would most likely collapse.
In addition to all of this, as pointed out by the General Director of the World Health Organization, the shortage of raw materials such as glass, plastic and caps is also an important aspect that delays the production and distribution of vaccines worldwide. This information is supported by the report from Chatham House and the International Federation of Pharmaceutical Producers and Associations (IFPMA) which states that “it has become evident that many COVID-19 vaccine input supplies of raw and packaging materials, consumables and equipment, are in short supply which may result is several COVID-19 vaccine manufacturers not being able to meet their current vaccine manufacturing commitments”.
The development of the vaccines against COVID-19 that are currently commercialized has already demonstrated an unprecedented level of cooperation among companies in the pharmaceutical industry and different countries. Laboratories have made their best efforts to release quality products in unthinkable times, and the solution is not found by removing patents, but by increasing production and supply.
Hopefully, responsible and well-informed politicians will clarify the current misinformation and help strengthen the patent system, which is critical for the growth and wellbeing of the nations. This is how the Administration of the German Chancellor, Angela Merkel, properly stated it by saying that “the protection of intellectual property is a source of innovation and must remain so in the future”, highlighting that “the limiting factors in the production of vaccines are the production capacities and high-quality standards, and not patents”.
Buenos Aires, May 10th, 2021
© Juan Carlos Ojam – Ojam Bullrich Flanzbaum
For further information please contact: jcojam@ojambf.com
Linkedin: Juan Carlos Ojam
Original article in Spanish in abogados.com.ar: https://bit.ly/3eI7Mwe
[1] Bayer scientists discovered and medicinally developed ciprofloxacin, the active ingredient in Cipro, in 1981. By 1984 they obtained a patent for this drug, which turned out to be the most effective in fighting the anthrax bacteria. Early treatment with anthrax antibiotics is essential to improve the chances of survival of those infected. As envelopes loaded with this bacterium began to appear in October 2001 in Florida, Washington and New York, the demand for this drug increased exponentially. The fear of a general shortage and its high cost led the United States government to consider applying a compulsory license of the Cipro patent, in order to produce generic versions of the drug locally and to ensure a large stock in the event that cases would increase. Finally, the conflict between Bayer and the North American government was resolved through a commercial agreement with considerable price drops and a permanent stock commitment.
