Will IP hurt ventilator production amid COVID-19 pandemic?
With the UK facing a shortage of ventilators needed to treat critically-ill patients suffering from COVID-19, earlier this week Prime Minister Boris Johnson called on manufacturers to switch their production lines to address the shortage.
Even if manufacturers can rapidly change their production into ventilator assembly lines, there are bound to be wider IP implications. WIPR investigates.
A tricky position
Businesses that currently manufacture ventilators are in a tricky position, according to Edward Cronan, barrister at Hogarth Chambers.
“There is demand for vastly increased production and there will be little to no hesitation by governments and third parties in meeting that demand however possible,” he says.
For example, late last night the Financial Times reported that three industrial consortia—consisting of aerospace companies led by Meggitt and two from the automotive sector steered by Nissan and McLaren respectively—were racing to develop a new medical ventilator.
The consortia are aiming to develop a basic ventilator prototype by next week, with manufacturing expected to begin within a month. According to the Financial Times, the target is to manufacture 5,000 ventilators as soon as possible, with a goal of a further 30,000 eventually.
Meanwhile, in Italy, two volunteers, Cristian Fracassi and Alessandro Romaioli, used their 3D printer to create unofficial copies of a patent-protected valve, which was in short supply at Italian hospitals, reported The Verge.
However, says Cronan, given the regulatory approval processes required in the medical device sector, recent movements to design ‘open-source’ ventilators are likely to be misguided.
He adds that “governments are likely to focus on deploying known and trusted designs and these will ideally be produced by companies that have expertise in the medical devices space”.
Crown use exemption
As British engineers and manufacturers respond to the UK government’s request, the risk of patent infringement rears its head.
Penny Gilbert, partner at Powell Gilbert, says: “Surely no patent owner would seek an injunction in the current situation, but could businesses answering the government’s call end up embroiled in subsequent demands for damages or licence fees?”
This is where the Crown use exemption from patent infringement comes into play. The exemption provides a means for the UK government to authorise others to make use of any patent rights without the prior agreement of the patent owner, to the extent they are for the “services of the Crown”, explains Gilbert.
She adds that the patent owner is compensated appropriately later, by negotiation with the appropriate government department, and government authorisation for the use can be given retrospectively, if necessary.
While the exemption has rarely been invoked in the past, says Gilbert, it arose in the case of IPCom v Vodafone, handed down earlier this year.
“Since Vodafone’s allegedly infringing activities related to providing emergency access to the mobile phone network, under terms of a contract with the UK government, that was held to provide the necessary ‘written authorisation’ to invoke crown use and provide a shield against IPcom’s infringement claim,” adds Gilbert.
Cronan adds that the key lesson for the current ventilator shortage is that the government authorisation only needs to relate to a particular act (eg the reproduction of a ventilator design), and doesn’t need to specify the patents being licensed.
Presumably the same conclusion would apply to crown use of any designs incorporated in ventilator technology, he says.
“It is therefore very possible we will see the UK government make use of the Crown use exemption, even if they are not aware that is what they are doing,” says Cronan. “The government may also be able to rely on the exemption in article 31 of TRIPS that entitles them to waive the obligation on the party authorised to make ‘efforts to obtain authorisation from the rights holder on reasonable commercial terms and conditions’.”
Voluntary cooperation
Ultimately though, is the Crown use exemption really necessary?
Rachel Fetches, partner at HGF, says: “Although we have provisions for compulsory licensing, patentees with the relevant patents are highly likely to cooperate voluntarily with the government and other manufacturers to ensure that demand is met.”
Many will simply do this because that is the right thing to do, argues Fetches, but, in any event, companies will not want to have the negative PR of being seen to be an obstacle for meeting the clear need and/or perception of profiteering in the context of a public health crisis.
According to Fetches: “This applies equally to the pharmaceutical companies working on potential treatments/vaccines/diagnostic testing, that are acknowledging that sales of a successful treatment are unlikely to be profit-generating but would have huge positive PR value for the companies.”
Chile is already dealing with IP implications of the crisis—earlier this week, the Chilean Chamber of Deputies (the lower house of Chile's bicameral Congress) approved a resolution asking the Chilean government to declare that there is justification for compulsory licences.
The compulsory licences would cover vaccines, drugs, diagnostics, devices, supplies, and other technologies useful for the surveillance, prevention, detection, diagnosis and treatment of people infected by the coronavirus virus in Chile, according to an English translation of the resolution from non-governmental organisation Knowledge Ecology International.
Third parties may also seek to use the UK’s compulsory licensing laws, according to Cronan. However, he says this is likely to be a slow process and is essentially untested in the UK.
He concludes: “I would hope that potential licensors would recognise the need to grant relevant licences when approached, and that we will not need to have recourse to this process to meet public health demands.”
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