The controversy to come? Patent law and a COVID-19 vaccine

The United Nations Headquarters in New York, USA. Photo: Osugi/Shutterstock
Senior Lecturer, ANU College of Law
Wednesday 10 June 2020

Since the inception of the Agreement on the Trade Related Aspects of Intellectual Property (TRIPS) within the World Trade Organisation (WTO) system, international law has struggled to adequately account for human rights and development concerns. This has been evident in the compulsory licensing struggles over HIV-AIDS medications and in the impact of patent and plant variety protection measures upon food security in the Global South. In short, there is room for doubt as to whether international intellectual property (IP) laws fairly and adequately serve global communities.

The COVID-19 pandemic appears likely to bring many of the concerns around the global IP system to a head. At present, there are a number of companies and institutions racing to be the first to develop a COVID-19 vaccine. Patent law favours the first in time. Subject to the requirements of domestic laws, it grants a temporary monopoly for the exploitation of a useful invention to the inventor.

It follows that whomsoever develops a COVID-19 vaccine stands to make extraordinarily significant sums of money. Further, as the TRIPS Agreement has 164 member states, and, as the treaty itself is frequently included in the IP chapters of the myriad of free trade agreements across the globe, the patents protection clauses of TRIPS are binding on almost all states.

This poses an obvious availability problem. No doubt, the developed states have a fairly high capacity to pay for COVID-19 vaccines, but the same cannot be said for under-developed states. Moreover, with COVID-19 wreaking havoc in nations with large poor communities, such as India, Indonesia, Iran and Brazil, the potential for a humanitarian disaster is obvious.

Notably, developed states such as Germany, Israel and Canada have signalled that they will suspend patent protection for COVID-19 vaccines given the level of the health emergency at play.

The Doha Declaration on TRIPS and Public Health acknowledges the need to balance patent protection with a compulsory licensing system. However, the process set out under article 31 of TRIPS requires consultation and negotiation with the patent owner before any compulsory licensing and manufacturing of a drug can take place. This is likely to be a time-consuming process, ill-suited to the exigencies of a pandemic.

It is notable that Canada has circumvented this entire process under Bill C-13 by permitting the Health Minister to direct the Patents Commissioner to authorise the Canadian Government to make use of a patent to the extent required by the health emergency. This law is bounded by a test of necessity. Nevertheless, it is likely not consistent with Canada’s obligations under TRIPS.

Similarly, Germany proposes to rely on a pre-TRIPS domestic law, used only shortly after the Second World War, to suspend patent rights. Similar compulsory licensing laws exist in the United States, the United Kingdom, Australia and New Zealand.

Whether these laws will be used is debatable.

The acid test is whether those firms that have the most to gain from a COVID-19 vaccine will agree to either an open source or licensing process. Given the vast amounts of money expended on research and trials this seems unlikely. Yet, the lure of appearing to be a good corporate citizen may draw some concessions from the eventual patent holder.

The European Union has drafted a resolution in favour of patent pooling, the sharing of intellectual property to permit the fast manufacture of any useful COVID-19 drugs, but this is only a voluntary measure.

There is support amongst some researchers for an ‘open source’ approach to COVID-19 intellectual property. Under this approach, knowledge about COVID-19 treatments would be available via a Creative Commons licence.

However, the ‘Open Covid Pledge’ largely has the support of academics or companies not directly involved in drug trials and manufacture.

The acid test is whether those firms that have the most to gain from a COVID-19 vaccine will agree to either an open source or licensing process. Given the vast amounts of money expended on research and trials this seems unlikely. Yet, the lure of appearing to be a good corporate citizen may draw some concessions from the eventual patent holder.

It is also quite likely that any patent will be challenged in the domestic courts. This was the case in Australia with the Cancer Voices litigation which culminated in the 2015 decision in D’Arcy v Myriad Genetics. In that case, on the basis of one of the domestic conditions of patentability, the complex manner of manufacture test, the High Court of Australia found that no patentable invention existed. Such decisions, and their consistency with international law, is likely to be a live issue in the future.

To be clear, it is not that international intellectual property laws themselves are to blame. Instead, it is the interaction of property, via TRIPS and domestic laws, with pre-existing economic and social problems that gives rise to the controversies around patents and access. In the context of any COVID-19 vaccine, the limited nature of public health budgets, existing poverty and inequality issues coupled with a fast-moving pandemic, is likely to give rise to a volatile situation.

If ever global cooperation was needed that time is now. While the pandemic has abated in Australia and New Zealand, the experience of Singapore shows that it has the ability to flare up again.

There are legal avenues available to ensure access, but their operation is time-consuming and not altogether assured. There is some urgency around getting states to think ahead as to how patent laws should operate in the event of a COVID-19 vaccine.

Updated:  10 August 2015/Responsible Officer:  College General Manager, ANU College of Law/Page Contact:  Law Marketing Team