Hold tight on the monopolistic rights or save lives with competitor?
The recent COVID-19 pandemic has led to a global health crisis of unprecedented proportions. As nations around the world are struggling to control the spread of the pandemic, it has become clear that access to sufficient and affordable medication and health care equipment would be crucial in overcoming the crisis. However, medications are often the subject of patents which enable a patent owner to restrict the exploitation, use, distribution and sale of medications. A very pertinent question arises: Should patent rights be strictly enforced in light of the pandemic?
Patent protection in Malaysia is governed by the Patents Act 1983 and a patent gives its owner (i.e. the patent holder) an exclusive right to exclude others from making, using, selling and importing an innovative invention for a period of time. In this situation, a patent owner is granted a monopoly in respect of its invention and is entitled to dictate the manner in which the invention is used, including control of the prices of and the quantity in which an invention is sold.
Despite all efforts being made to face the COVID-19 crisis head on, the sudden surge in demand for medication and health care equipment has left many without life-saving equipment as manufacturers around the world struggle to cope. This has led to certain actions being taken in the race against time to contain the virus and to save lives, which could, unfortunately lead to patent infringement.
POTENTIAL CASE FOR PATENT INFRINGEMENT
A recent report disclosed that a hospital in Brescia, Northern Italy, was forced to enlist the assistance of engineers to digitally design and produce a valve for its respirators using 3D printing technology because the hospital was unable to obtain replacement valves from their usual supply chain. However, this was conducted without the patent owner’s permission. As a result, there has been reports of a patent infringement lawsuit being threatened. Although the patent owner ultimately denied having issued a threat, this shows that the actions of the engineers could arguably risk exposure to a patent infringement lawsuit despite being commendable in saving lives.
Many would opine that it may seem unfair that there has been infringing use even though the unauthorized use was for saving lives, it cannot be denied that a patent owner is entitled to a monopoly for the invention.
However, having said that, if patent rights are strictly enforced even in times of crisis, the resulting consequences could prove to be in dire need. For example, the strict enforcement of a patent in relation to a drug or a vaccine against the COVID-19 virus could lead to the death of many who could not afford the same. Developers and manufacturers are forced to then find alternatives to life-saving equipment and health care products for fear of a potential infringement lawsuit. Further, hospitals and clinics would also be faced with shortages in medication or equipment as they struggle to cope with a resistless number of patient, leading to a decrease in a hospital’s overall treatment capacity and potential failure in curbing the spread of the virus.
Therefore, this is a clear indication that a balance is required between the rights of a patent owner and the need to save lives and manage a crisis. Profit-making should not be prioritized over societal interest in addressing a crisis such as the COVID-19 pandemic. Such an issue would put our morality as humans into perspective. As such, this begs the question of whether and when rights granted by patents should be “relaxed”?
In Malaysia, a compulsory license may be granted under the Patents Act 1983. Any person may apply for the grant of a compulsory license after the expiration of three years from the grant of a patent (or four years from the filing date of the patent application, whichever is the latter) under any of the following conditions:
(i) where there is no production of the patented product or application of the patented process in Malaysia without any legitimate reason;
(ii) where there is no product produced in Malaysia under the patent for sale in any domestic market, or there are some but they are sold at unreasonably high prices or do not meet the public demand without any legitimate reason.
The person making the application must present proof of effort being made to obtain authorization from the patent owner on reasonable commercial terms and conditions but such efforts have not been successful within a reasonable period of time. As a safeguard for the patent owner, the exploitation of the patented invention will be limited to the purpose for which it was authorized and shall be subject to the payment to the owner of the patent of an adequate remuneration for such exploitation.
In addition, the Malaysian Government may decide, even without the agreement of the owner of the patent, that a Government agency or a third party may exploit a patented invention if:
(i) there is a national emergency or where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the Government, so requires; or
(ii) where a judicial or relevant authority has determined that the manner of exploitation by the patent owner or his licensee is anti-competitive.
Such actions would thereby enable a Government agency or a third party to manufacture and sell a patented invention at a greater capacity and at a lower price to make it more accessible to the public.
Not surprisingly, the possibility of the grant of compulsory licenses and exploitation of a patented invention by the decision of the Government could be a cause for concern on the part of patent owners. A patent owner’s monopolistic rights would be compromised and such actions could lead to the loss of exclusivity and potential business opportunities. It could also lead to a patent owner being unable to recover costs which it may have invested in the research and development of an invention.
WHAT’S THE NEXT STEP?
This begs the question: Does public interest heavily outweigh private interest? In a bid to curb the pandemic, various countries have begun invoking legislations equivalent to Malaysia’s compulsory licensing and emergency use provisions.
For example, there has been reports of Israel issuing a Permit (a compulsory license) for the importation of generic versions of AbbVie’s patents associated with lopinavir / ritonavir with the view of attempting to treat COVID-19 in March 2020. The medicine is essentially used for the treatment of HIV patients but is now being tested as a potential ingredient for a cure for COVID-19. Following the announcement, the patent holder, AbbVie, dropped its patent rights over the medicine worldwide. In unprecedented times like these, this is a positive step towards prioritizing the public interest and will hopefully encourage pharmaceutical companies to come together to collaborate against the pandemic.
In contrast, there are also companies who are fighting for their exclusivity and monopolistic rights. For instance, the Wuhan Institute of Virology in China recently filed an application for the registration of a national patent for the use of remdesivir, an experimental antiviral drug used to treat COVID-19, and first developed by a US company called Gilead. While the act of the Institute is completely within their right, is their decision to restrict access to the patent potentially life-saving drugs an ethical one in the face of the current global health emergency?
Further, pharmaceutical companies and governments in the US, UK and Europe are strongly opposed to the temporary waivers of patent rights over the production of the COVID-19 vaccines. The Pharmaceutical Research and Manufacturers of America sent a letter to President Joe Biden saying waivers would “undermine the global response to the pandemic, including ongoing effort to tackle new variants.”
According to a Bloomberg tracker, enough shots have been given out to vaccinate around 4.6% of the global population, but distribution so far has been centered in wealthy, western countries. Countries like Morocco, Africa, has vaccinated no less than 0.5% of its population. It is a similar story in places like southern and western Asia and Central America, where supplies remain scarce. An estimate from The Economist found that these areas would likely not have widespread vaccine coverage until at least 2023.
Not all hope is lost. Covax, the UN-backed initiative, aims to deliver at least 2 billion doses of the currently produced vaccines by the end of 2021. Just over a week ago, Ghana became the first country to take delivery of Covax doses. Ivory Coast and Colombia have joined in on receiving a number of the vaccines as well.
“More and more low- and middle-income countries are getting very serious about making this pandemic monopoly waiver a reality, so it’s time for blocking countries to do the right thing and stop standing in the way,” said Yuanqiong Hu, Senior Legal and Policy Advisor at Médecins Sans Frontières (MSF) Access Campaign. “Governments that oppose the monopoly waiver proposal know that simply asking pharmaceutical corporations to voluntarily do the right thing will not get us anywhere, when these attempts have so far failed to secure global access to COVID-19 medical tools for people who urgently need them. It’s time for change, not charity.”
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