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Covid-19 and the patent path forward

The unique situation surrounding Covid-19 has led to issues arising in all aspects of business and everyday life which, until now, have not even been considered. From "helicopter money" to "R₀ values", there are new technical terms entering public discourse which frame everyday discussion of issues in the Covid-19 crisis.

From an intellectual property standpoint, an issue which has attracted coverage both in Australasia and globally is the implications of patent protection on the availability of vaccines against, and treatments for, Covid-19 in the rush to discover and create these.

While the pandemic nature of Covid-19 means that access to vaccines or treatments are inevitably global issues, the territorial nature of intellectual property does provide scope for differences. Below, we make a brief overview of some aspects of the patent systems of New Zealand and Australia which may influence availability of a vaccine or treatment for Covid-19. We also observe some of the potential global implications of the "patent pooling" models that have been proposed.

Key points:

• Compulsory Crown use and compulsory licensing are mechanisms which could be used to facilitate access to patented inventions relating to Covid-19 in Australia and New Zealand.
• In reality this is unlikely due to the timeframes prescribed by legislation and/or likelihood of willingness from patentees to provide faster access to patentable innovations on commercial terms.
• The development of patent pools such as C-TAP is interesting to observe and it remains to be seen whether this will have any effect on availability of patentable technology.

Crown use and compulsory licensing in Australia and New Zealand

The provisions of New Zealand and Australian patent law are similar in the manner they provide for the exploitation of a patented invention, without the explicit approval of the patentee, by way of Crown use or compulsory licensing.

Crown use

Crown use permits a government department or authority to exploit an invention for the services of the Crown. In New Zealand, this may be triggered at any time after the complete specification relating to an application for a patent for the invention has become open to public inspection (18 months from the earliest priority date). In Australia, there is no such explicit limitation but on a practical basis, unless the invention had been otherwise disclosed by the inventor or Applicant, its manner of working would unlikely be known until after publication.

Practically this lag means that the Crown use provision may be too slow to provide efficient access to emerging treatments or vaccines for a global pandemic.

If triggered, conditions of Crown use are limited, providing a non-exclusive right to work the invention. An effort to obtain consent from the patentee or patent applicant on reasonable commercial terms must first be made (unless in case of emergency), notification to the patentee or patent applicant regarding the nature and scope of use is required and remuneration to the patentee of patent applicant is payable.

All of these factors are subject to oversight of, and determination by the Courts if agreement between the Crown and patentee is not achieved.

Compulsory licenses

Compulsory licensing is another mechanism by which a party may use a patented invention without the express consent of the patentee.

A compulsory licence may be granted by the court on the basis that a market for the patented invention is not being supplied on reasonable terms, and that the person seeking the licence has sought but not been granted such a licence.

Given the inevitable limits on production of any breakthrough vaccine or drug against Covid-19, despite worldwide demand, and the potential global "pecking order" involved, there is a real prospect that an invention may not be supplied in New Zealand or Australia at all, leading to scope for a compulsory licence.

However, a compulsory licence may only be granted after the later of expiry of three years from the date that the patent is granted (in both New Zealand and Australia), or after the expiry of four years from the patent date (in New Zealand only). These are long timeframes for invoking the compulsory licensing regime, and which are unlikely to be palatable for the people and governments of New Zealand and Australia, in a scenario where they are desperate for vaccines and treatments for Covid-19.

The Patents Acts of both New Zealand and Australia also include provisions which permit a compulsory license to be granted for the production of pharmaceuticals for export purposes to "least-developed countries" or other countries in an emergency under the TRIPS agreement. When this amendment to TRIPS was enacted New Zealand and Australia noted that they would not trigger this regime as an importer. This means that it is possible that, in theory at least, a compulsory licence could be granted in New Zealand or Australia tomorrow for the production and export of Covid-19 vaccines or treatments the subject of a granted patent to an eligible importing country, yet such vaccines or treatments could not be compulsorily licensed for use in Australasia until the expiry of three years from the date that the patent is granted.

Global patent pooling

Patent pools are another mechanism which have been proposed as a COVID-19 solution, and they reflect the collaborative approach to solving the Covid-19 problem which has so far been favoured. A patent pool, the COVID-19 Technology Access Pool (C-TAP) for COVID-19 has been suggested and subsequently launched by Costa Rica and the World Health Organisation on 29 May 2020 (https://www.who.int/news-room/detail/29-05-2020-international-community-rallies-to-support-open-research-and-science-to-fight-covid-19.

Patent pools are groups of patents, typically owned by a range of parties, which are based on agreement between the parties to simplify licensing and cross-licensing between them. Permission to use technology from the patent pool may be dependent on monetary contribution or contribution by way of patents to the pool.

The practice of patent pooling is not new and has been used for example by certain industries to share access to groups of "standard essential patents". However the concept of patent pooling in terms of the present scale and urgency provides a whole new set of issues to consider.

There has been strong advocacy for patent pooling by multilateral organisations such as the European Union and World Health Organisation, while some specific governments have opposed the idea. To date, over 30 countries have signed up to the COVID-19 Technology Access Pool (C-TAP), of which New Zealand and Australia are not included at this stage.

There is still water to go under the bridge as to whether patent pooling will be a successful solution to open accessibility to potential Covid-19 vaccines and treatments, or whether these will be withheld by discoverers and licensed on commercial terms in order to meet the inevitable demand.

Of course, all of the above presumes that such vaccines or treatments will be patent eligible subject matter in the first place. It would certainly be a story if the novelty of a Covid-19 vaccine or treatment was destroyed by disclosure before filing!

Summary

As the above mechanisms and processes show, none are likely to be perfect in facilitating access to vaccines and treatments for COVID-19 at the speed necessary to meet likely demand.

While countries including Canada, Chile, Germany, France and Israel have amended their patent laws or triggered compulsory licensing in order to pre-empt facilitating access to patented inventions, and certain pharmaceutical companies have waived their exclusivity on certain products, availability of these technologies is fundamentally dependent on their initial discovery, development and efficacy.

Therefore, it may be that as breakthrough technologies in the fight against Covid-19 are developed, national patent laws and global initiatives, such as patent pooling, simultaneously evolve to allow for necessarily rapid deployment and manufacturing. Alternatively, public interest and public relations considerations of pharmaceutical companies developing these inventions may supersede desire for strict patent enforcement.

If you have any questions regarding the above issues or anything else in relation to intellectual property in Australia or New Zealand, please contact us.

Jesse Strafford - June 2020