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The ongoing public health emergency owing to the coronavirus has led to paradigm-shifts in various fields including intellectual property rights. The first virtual Assembly of the World Health Organization (WHO) took place in May and a Resolution was passed to address issues surrounding the pandemic. The Resolution, amid other statements, called for universal, timely, and equitable access to all technology, including its necessary components, for the purpose of responding to the COVID-19 situation. Towards the end of this statement, WHO laid down that technology must respect the provisions of international treaties applicable to the situation, including the Agreement on Trade-Related Aspects of IPR and the concerned provisions in the Doha Declaration on the TRIPS Agreement as well as Public Health.
Indeed, universal access to technology must be given with respect to vaccines, PPE, testing kits, medicines and other essential components. There has been a constant demand for protection for intellectual property rights of various instruments to combat the pandemic. This article seeks to address the suspension of IPR to ensure compulsory licensing of equipment, vaccines and necessary components required for the fight against the virus while analyzing the approaches taken by different countries. The Resolution will remain a dead letter unless there is tangible action taken. While there are numerous challenges associated with developing COVID-19 treatments and vaccines, they are surmountable.
Licensing for the Pharmaceutical and Medical industry
With the increase in cases across the globe, the need for large-scale hospitalization and intensive care units have risen. As India’s coronavirus cases surpass 2,37,000, war-footing efforts are being made to procure more protective gears, diagnostic kits, ventilators and other essentials. The missing block to a country’s preparedness is the supply of intellectual property rights. Complications with respect to withholding of essential formulae and industrial designs have begun. The Swiss company Roche, the leading diagnostic kit manufacturer, has been withholding the formulae for a reagent which has led to decreased supply of testing kits in numerous countries. Moreover, the patents for Remidisivir and Fevipriavir, two medicines undergoing clinical trials, are protected in India. Access to medicines lie in the hands of patent holders who do not insist on enforcing their IPR. In most countries, the domestic industries have the ability to produce medicines at a low cost. However, it is not feasible to rely on the magnanimity of IP holders in all cases. Hence, compulsory licensing for any IP protected products required for the battle against COVID-19 has been approved in many countries.
Suspension of drug patents have been the oldest tool in disease fights. As countries race to get hold of vaccines and equipment to tend to its citizens, patent holders have come to accept the reality. Israel was one of the first countries to have issued a compulsory license during the pandemic. The Israeli patent laws permit the government to exploit any invention, after compensating the patent holder, in the interest of national security or necessity such as a pandemic. Germany only recently passed legislation for the prevention and control of infectious diseases in humans. Similarly, Canada has passed the COVID-19 Emergency Response Act. Such laws allow the government to suspend patent rights or issue compulsory licenses during the pandemic. Broadly, these licenses will expire after one year or earlier, once the emergency comes to a halt. The patent owner who is notified of any such license is entitled to equitable remuneration and has the right to appeal. Similar approaches are being taken in Australia, Brazil, Chile and Ecuador.
Section 107 of the Indian Patents Act permits the production, use and marketing of patented drugs without the permission of the patent holder for approval. Therefore, Indian companies indulging in generic production and research institutes are permitted to produce and utilize these patented medicines. However, to attract private sector investments, the regulatory authority needs to provide approval. Compulsory licensing can be granted on three grounds under Section 84: unmet demands, excessive price and lack of local manufacturing. Any interested person can apply for compulsory licenses for three years from the date of grant of the patent after the failure of efforts to obtain a voluntary license from the patent holder. However, India has been put in a tight spot due to pressure from U.S.
The TRIPS Agreement as well as the Doha Declaration permits compulsory licensing. Although under Article 27, for the purpose of protecting human life or health, patent rights can be suspended. In addition to this, Article 30 allows the development and approval of generic drugs before the expiration of a patent. Article 31 permits ad hoc and time-sensitive compulsory licensing, if approval from patent holders is taken on reasonable commercial terms before invoking a compulsory license, which must be indemnified.
International organizations such as WHO, WTO and the World Intellectual Property Organization (WIPO) should support member countries that seek to invoke the ‘security exception’ stipulated in Article 73 of the TRIPS Agreement. The effective use of this provision will be fully justified to procure products and use the technologies to manufacture them to combat the current health emergency. The enforcement of intellectual property rights that may prevent the procurement or manufacturing of the products are to be suspended.
Accessibility and affordability take precedence over profits. Monopoly rights with respect to drugs and medical equipment have to be given up even if it may seem uneconomical. However, keeping prices low and overriding IPR are two different things. If there is a drug supply shortage, governments will take necessary steps while ensuring companies are provided a measure of fair compensation for their rights.
Changing Dimensions of Commerce
The main challenges faced by stakeholders in intellectual property rights in the wake of a pandemic are enforcement and reputation issues. With private companies operating at an unprecedented pace, governmental funding and emergency approvals are being granted with ease. To effectively combat this pandemic, companies have redirected efforts, even their core businesses, to the production of urgently required materials. Filling of patents will experience lag due to the difficulty in distinguishing between true emergency counter measures and opportunistic infringers. Adding to the challenges, existing laws may allow for compulsory licensing of IP under terms a patent owner would otherwise not accept. Considering the potential for conflict, there is a necessity to balance intellectual property rights and the actions taken to fight the virus. Despite the circumstances, the approach being adopted is ‘business as usual’. Innovators and manufacturers can exploit and license their IPR during the pandemic under certain terms. Holders of IP can operate and seek licenses as usual. However, there will be shifted priorities which may lead to delay, but the process remains essentially the same as before.
Patent offices around the world have learned to adapt to the changing dimensions of commerce and trade. The United States Patent and Trademark Office have ensured to enforce steps to adapt to the change in workflow. Moreover, the European Patent Office is also adopting measures to combat the pandemic. Proceedings and events have been postponed unless they are to take place through online means. Time limits with respect to patents have been extended. A free formal license that allows IPR holders to easily permit the use of their intellectual property is being developed as well. In China, sharp increase in China’s FDI outflow has driven the government to use FDI to gain access to Intellectual Property Rights and technology. Re-opening of industries and shops has been encouraged as soon as there is a sufficient decrease in the number of cases. However, merely being back in business will not change the fact that the customer and client base has reduced significantly.
Guidelines released by the WIPO lay down measures to ease tensions which include the extension of time limits during the closure of an IP and using videoconferencing and electronic communication to smoothen the process. As the spread of the virus sees no bounds, measures to protect intellectual property becomes essential. While COVID-19 unleashes its wrath on businesses, utilizing the measures taken by governments will help protect their interests for the time being.
Governments have addressed the use of intellectual property rights for countering the coronavirus, including necessary response products such as PPE, tests, vaccines, and treatments. The most feasible solution is suspending patent rights and ensuring compulsory licensing. Patent owners and manufacturers seeking to combat the pandemic must consequently remain vigilant about protecting their own IPR as well as infringing the rights of other IPR holders. Although these form part of the ordinary process for IPR holders, the global emergency calls for a speedy and effective system. Most countries have the legal framework to enforce compulsory licensing while other countries are finding difficulty to create a balance between protecting the rights of IPR holders and effective COVID-19 countermeasures.
Innovations will continue to be protected through IPR laws. Holders may have to collaborate with third parties for increasing efficiency. Licensees must understand and enforce their rights with respect to operability. Compulsory licensing must be done under reasonable commercial terms as stipulated under the TRIPS Agreement. While IP holders are to be compensated for the use of their product, tailoring the indemnification provisions will ensure fairness even for those using governmental funding. During the pandemic, governments cannot remain the gatekeeper for patent holders. With the elevated flexibility, there comes the need to be aware and vigilant.
To quote the Director-General of WHO, “Let our shared humanity be the antidote to our shared threat.”
World Health Organization, A73/CONF./1 Rev.1 (May 18th, 2020).
 Carlos Correa, Open Letter to WTO, WHO, AND WIPO on COVID-19 and the TRIPS Art. 73 (Exception for Essential Security Interests), South Centre.