COVID-19 response is critically dependent on rapid and mass-scale innovation, and the supply of products necessary for the prevention, diagnosis and treatment of the disease. In particular, strengthening local production of medicines and vaccines is urgently required in developing countries. With the rising incidence of COVID-19 infections, developing countries will require these products in substantially large volumes, overcoming challenges of limited local manufacturing capacity and heavy import dependence.

Intellectual property (IP) rights can potentially impede mass production of existing health products, as well as innovation and research and development of new products. IP rights can be exercised by their owners to grant or withhold from licensing the technology required for manufacturing or further developing a product. If a license is denied, the technology will not be available for other firms to manufacture or supply.

Usually, a bundle of several IP rights can exist around a particular technology. It is very common patenting strategy in the pharmaceutical industry to take separate patents on the main compound of a drug and a large number of secondary patents on different formulations and combinations, dosage, as well as other possible therapeutic use of a drug. This can make it difficult for follow on innovators to invent around the thicket of IP rights.

There have been instances where transfer of technical designs or knowhow have been denied to third parties to manufacture products required to respond to COVID-19. Italian volunteers desiring to manufacture ventilator valves through 3D printing technology were denied access to the designs of some components, forcing them to engage in reverse-engineering. In the United States (US), the governor of the state of Kentucky admitted to difficulties in procurement and manufacturing N-95 masks owing to several patents.

Patents on critical enzymes may also restrict the development of testing kits. Trade secrets may restrict access to health technologies required to respond to COVID-19. For example, the multinational pharmaceutical company Roche initially refused to share with Dutch companies the secret formula for producing a buffer solution that is required for use in RC-PCR tests for COVID-19.

Through a resolution of the World Health Assembly on COVID-19, member states of the WHO have recognised the possible need for countries to adopt measures to ensure that IP rights do not constrain global equitable access to health technologies for COVID-19 through the full use of the flexibilities of the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) as well as voluntary pooling of patented technologies, data and know-how.

TRIPS agreement and its flexibilities

National laws of all countries that are members of the WTO must comply with standards of IP protection and enforcement established by the WTO TRIPS Agreement. The TRIPS Agreement requires WTO members to grant patent protection for pharmaceutical products for a minimum term of 20 years. This has impacted the ability of countries to develop a robust local pharmaceutical industry.

India had to amend its patent law to effectively enable foreign pharmaceutical companies to obtain patent protection for medicines. Thus, Indian generic companies have to obtain a license from the patent holder to produce and supply remdesivir for use in COVID-19 treatment. Only five Indian companies have been granted a license by the patent holding company – Gilead – to produce remdesivir. In the absence of patent protection, a larger number of Indian companies could produce the drug to ensure sufficient availability of the same at affordable price.

A number of flexibilities available under the TRIPS Agreement can be applied by governments to ensure that IP rights do not constrain innovation and availability of health technologies required for responding to COVID-19. Till date, the national measures that have been adopted by different countries largely focus on measures enabling ministries of health to grant compulsory licenses or government use authorisations with some countries also offering indemnity against IP infringement proceedings and use of competition law. Below are some examples of national measures taken by some countries.

National measures taken by countries

Enabling laws to facilitate grant of compulsory licenses 

Canada

Canada enacted the COVID-19 Emergency Response Act, which allows the government to issue a compulsory license without first negotiating with the rights holder, or establishing its own ability to supply a product, and the patent holder is only entitled to receive an amount as remuneration instead of a compensation. While the Commissioner of Patents has the discretion generally under the Canadian patent law to grant a government use authorisation on the application of the government, the Emergency Response Act has removed this discretion and mandates the Commissioner of Patents to grant such authorisation upon the application of the Ministry of Health.

Chile

The parliament of Chile adopted Resolution No. 896 declaring that the global coronavirus outbreak justifies the use of compulsory licensing to facilitate access to vaccines, drugs, diagnostics, devices, supplies, and other technologies useful for the surveillance, prevention, detection, diagnosis and treatment of the coronavirus in Chile.

 Germany

Germany adopted the Prevention and Control of Infectious Diseases in Humans Act, which authorised the Ministry of Health to issue government use authorisation under the patent law, upon the declaration of a national epidemic by the lower chamber of the German federal legislature (Bundestag). Such authorisation by the ministry was made applicable to medical products including active ingredients, starting materials and excipients for medicines, medical devices, laboratory diagnostics, aids, items of personal protective equipment and products for disinfection.

Israel

Israel issued a government use authorisation under the Israeli patent law for the importation of generic lopinavir/ritonavir combination for the treatment of COVID-19 patients from an Indian generic company by a local company acting on behalf of the health ministry.

It is noteworthy from these instances that only two developed countries (Canada and Germany) very rapidly adopted legal measures to enable the government to issue compulsory licenses for government use for COVID-19, by making use of the provisions relating to the grant of compulsory licenses under their existing patent laws. Developing countries like India can review the provisions relating to the grant of compulsory licenses in their patent laws and assess whether similar enabling legislation would be required to explicitly guarantee the freedom of the government to grant compulsory licenses for COVID-19 related technologies.

Indemnity against infringement claims

Another approach that countries can take is to suspend the enforcement of IP rights for COVID-19 related technologies and grant indemnity against enforcement actions and infringement lawsuits. It has been argued by some that the recent notice of declaration published by the US Department of Health and Human Services under the Public Readiness & Emergency Preparedness (PREP) Act, conferring immunity from tort litigation for those engaging in acts related to COVID-19 countermeasures, also grants indemnity against patent infringement liability for third parties that use health technologies in relation to COVID-19. Though this interpretation has not been tested out in a court of law, this suggests that countries can adopt specific legislation suspending the enforcement of IP rights. 

Use of competition law

It is also possible for countries to use measures for anti-competitive use of IP protected technologies in relation to COVID-19. For instance, recently the European Commission (EC) launched a preliminary investigation on the abuse of the dominant position in the Dutch market by the pharmaceutical company Roche, on account of its refusal to share the secret formula for producing a buffer solution that is necessary for use in COVID-19 testing kits.

The EC has also stated that during the pandemic it will continue to closely and actively monitor relevant market developments to detect instances of undertakings taking advantage of the current situation to breach European Union (EU) competition law, either by engaging in anti-competitive agreements or abusing their dominant position. It is possible for developing countries to also use competition law to prevent anti-competitive behaviour by IP right holders over products that are critical for COVID-19, both for the development of the local industry for such products as well as to protect the interests of patients and healthcare workers. 

Exercise of absolute sovereign powers

France has enacted a new law No. 2020-290 which introduced a new article – L.3131-15 – to the French public health code, allowing the prime minister to order the seizure of all goods and services necessary to fight against sanitary disaster, to temporarily control the prices of products, and to take any measures necessary to make relevant medicines available to patients. IP-related measures, including revocation of patents and grant of compulsory licenses could also fall within the scope of measures that can be adopted by the government under this law.

Other possible measures

In accordance with the TRIPS Agreement, a number of other IP-related measures can be taken by countries. Under Article 73(b) of the TRIPS Agreement, a country can take any action which it considers necessary for protection of its essential security interests, taken in the time of war or other emergency in international relations. Thus, in furtherance of its health security interests, a country can take measures such as suspending the grant of patent protection, and grant indemnity against enforcement actions. In accordance with article 6 of the TRIPS Agreement, a country can also undertake parallel importation of needed products, including from countries where they are produced under compulsory licenses.

What developing countries must do

With the rising incidence of COVID-19 infections in developing countries, it may be necessary for them to look at the IP rights applicable in their territories in relation to those products and technologies, and consider the legal measures that could be taken, where necessary, to ensure timely and affordable access for the population. To that end, a number of measures can be adopted by developing countries consistently with the TRIPS Agreement, by effectively implementing existing laws and regulations, amend them or adopt new enabling laws.

It is time for developing countries to review the extent to which such measures can be adopted, or what changes, if any, need to be introduced into their legal regimes so as to be able to act effectively and timely to address the devastating effects of the COVID-19 pandemic. Developing countries can avail technical assistance services to explore possible measures that could be taken in response to COVID-19 to ensure access to the required health products, in accordance with the legal obligations and flexibilities under the TRIPS Agreement.

Nirmalya Syam is Senior Programme Officer at the South Centre. The South Centre is  an intergovernmental organization of developing countries based in Geneva supporting their efforts to promote their common interests in the international arena,, including on adapting  their intellectual property  to support production and procurement of affordable and quality medicines so as to increase their in-country availability in the public and private sector. This article is based on a Policy Brief published by the South Centre.