Compulsory licensing and ‘inventing’ for Covid-19

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Selin Sinem Erciyas
Gün + Partners, Ankara

The Covid-19 pandemic has once again put compulsory licensing into the spotlight. However, strengthened compulsory licensing provisions may not motivate inventors to create the desired solutions. Understandably, most governments have panicked about providing fast and equal access to equipment such as ventilation machines, masks, goggles and, most importantly, pharmaceuticals. In this regard, Intellectual Property (IP) rights have been seen to pose an obstacle. It would be naive to say that there is no reason at all to see IP rights as an obstacle to providing such equipment. However, it is important to understand that a pandemic is a special situation, which cannot be ruled or handled via usual thinking.

That said, Canada, France, Germany, Israel, the United States and many other well-developed countries (which are home to most of the relevant inventions) have chosen to depend on compulsory licensing. Equally, the United Kingdom has not introduced a new law to amend or to strengthen the existing compulsory licensing laws, but has instead pointed out that ‘Crown Use Defence’ can be invoked in case of infringement of the IP rights due to products such as masks and ventilators. Local firms have been requested to produce such items in large quantities, in order to combat the Covid-19 pandemic. Additionally, it was announced that UK firms manufacturing ventilators (for use in combating the pandemic) will be protected by the Government from the financial impact of potential legal claims that arise over intellectual property infringements.

Turkey is one of the countries that did not take additional precautions, such as amending or strengthening compulsory licence provisions, and has also thus far managed Covid-19 well. Indeed, the current results concerning the pandemic show that Turkey has been one of the best-performing countries in terms of mortality rates and burden on the health care system. On the other hand, it should be noted that Turkey’s existing compulsory licensing provisions are broad and strong enough to suspend or overcome any patent rights in the case of a ‘public interest’ emergency situation.  Article 132 of the IP Code governs that the President of Turkey can decide on compulsory licence upon proposal from the relevant ministry, in cases where the commencement of patent use, or the extension or generalisation of its current use, are in the interest of public health or national security.  The compulsory licensing due to ‘public interest’ reasons is free from negotiation with the patent holder or any pre-procedure before the Courts or Turkish Competition Authority.

The behaviour of the health care industry proves that the innovators understand the unique characteristics of the pandemic. Innovator companies collaborated by participating in the Covid-19 Therapeutics Accelerator and the Innovative Medicines Initiative Covid-19 partnership. Moreover, most of the innovator companies generously gave up on related IP rights and publicly shared their product specifications, making patents available on a royalty-free basis for Covid-19 tests, or pledged not to assert patents against activities to stop the spread of Covid-19. It is true that a few innovators tried to take measures to protect their monopoly over their IP rights at the beginning of the pandemic. However, they faced serious negative publicity and all of them withdrew their acts.

Indeed, on 19 May 2020, the 73rd World Health Assembly adapted a Resolution that calls on international organisations and stake holders to work collaboratively at all levels to develop, test and scale-up production of safe, effective, quality and affordable diagnostics, therapeutics, medicines and vaccines for the Covid-19 response. This includes existing mechanisms for the voluntary pooling and licensing of patents, in order to facilitate timely, equitable and affordable access to them, consistent with the provisions of relevant international treaties, including those of the Trade-Related Aspects in Intellectual Property (TRIPS) Agreement and the flexibilities within the Doha Declaration on the TRIPS Agreement and Public Health.

Governments should consider that the threat of compulsory licensing has a serious chilling effect on ‘inventing'. Inventions require huge investment over a long period of time, which cannot be recouped without the ownership of IP. Covid-19 will most probably not be the last pandemic and humanity will need inventive activity again soon. It should be kept in mind that it took 20 months during the SARS pandemic of 2002–2003 for pharmaceutical companies to make a promising vaccine, ready for testing on humans.

Therefore, there should be an interim plan that encourages and motivates innovators but simultaneously secures equal and affordable access to medicine. The United Nations-backed Medicines Patent Pool (MPP), which normally aims to improve access to HIV, Hepatitis C and tuberculosis medication, temporarily expanded its mandate to include any health technology that could contribute to the global response to Covid-19, where licensing could facilitate innovation and access. The Medicines Patent Pool system seems to offer a more equitable and foreseeable solution, where a voluntary licence is taken from the patentee and the product is manufactured by the generic pharmaceutical companies.

Consequently, although compulsory licensing seems to be the first thing to come to mind when the need for an invention arises, this instrument should be handled carefully. It should not be ignored that patent protection is the main incentive for innovator companies to produce inventions.  A system like the Medicines Patent Pool, which does not force pharmaceutical companies into compulsory licences (but instead negotiates with the patentees for public-health driven licences) would seem to be the most sustainable offer, protecting almost all parties’ interests.