Quarterly International Ip Law Update

• Publication year: 2022
• Author: David Tseng

QUARTERLY INTERNATIONAL IP LAW UPDATE

David Tseng
MediaTek Inc.

Mariana Noli
Noli IP Solutions PC

Leaf Williams
Reichman Jorgensen Lehman & Feldberg LLP

THE PATENT COVID FOG: THE PATENT SYSTEM'S ROLE IN LIFE-SAVING MEDICINES

The inventor of insulin famously sold various U.S. patents on the hormone for $1 each to the University of Toronto to encourage mass production and distribution.¹ Though important pharmaceutical discoveries are still occurring today, such altruism stands in stark contrast with news of high costs for insulin in the United States.²

The continued race to prevent and cure Covid also illustrates the potency and shortcomings of the patent system. On one hand, the promise of tremendous financial reward provides strong demand to innovate and has led to numerous government-approved vaccines and treatments.³ For pharmaceutical companies, revenue from patent licensing to manufacture and administer the treatments is necessary to recoup the significant expenditures and risks in the research, development, and testing of such treatments.

Even the USPTO has recognized that patents can accelerate the introduction of groundbreaking technology to address global humanitarian challenges and hosts a program to award such innovations.⁴ On the other hand, the exclusionary nature of patents can also lead to delays in the distribution of such treatments in developing countries, and some question whether the basic patent bargain—in which innovation for the future is paid for by slower diffusion of innovation today—is effective policy in the face of a global pandemic.⁵

The World Trade Organization ("WTO") has tried to address this disparity. Although there is no such thing as an international patent, the TRIPS Agreement between members of the WTO establishes a set of minimum standards for IP among member states. Article 31 describes compulsory licensing procedures where governments may use patents without authorization from a rights holder.⁶ Appropriate circumstances are determined on a case-by-case basis and the government must first attempt to

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negotiate with the rights holder in the event of a "national emergency or other circumstances of extreme urgency or in cases of public noncommercial use." Moreover, the use of the patented technology is limited to the member state at issue.⁷These conditions ensure that compulsory licensing is only used under limited circumstances, and its application is further complicated by logistical difficulties in identifying which patents should be licensed.⁸ In addition, the member states must actually have the operation capabilities to practice the patents, which may be problematic in certain developing countries.⁹

Perhaps in view of the obstacles involved in securing compulsory licensing rights to Covid patents, developing countries have requested a patent waiver on relevant Covid-19 vaccine patents to speed up access and distribution. A few months ago, the WTO approved a partial patent waiver after intense debate.¹⁰ However, given that there is currently no shortage of Covid-19 vaccines available worldwide, the measure has been criticized as too little, too late.¹¹ As the main proponent for the patent waiver, even India has acknowledged that this waiver will not lead to any additional manufacturing facilities for Covid-19 vaccines.¹² The waiver has also been criticized as ineffective due to time restrictions and other limitations that have made the effect of the waiver largely duplicative of the compulsory licensing measures that are already present in TRIPS.¹³ Further, numerous pharmaceutical companies have entered into patent pools and other similar arrangements with other companies and private companies to improve access to Covid-19 treatments, rendering the waiver a largely toothless measure.¹⁴ The Biden Administration has offered only lukewarm...