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20 January 2022BiotechnologyMatthew Howell and Lauren Griffin

Pandemic blues: the global approach to COVID-related IP

As the COVID-19 pandemic reaches its two-year anniversary, the world’s battle against the virus continues. But while the world’s attention is (rightly) focused on variants, vaccines and other virus mitigation tools, there are less-reported seismic shifts in the global approach to IP among private companies and governments reacting to COVID-19.

Chief among these is a global push to waive certain provisions of the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), most significantly a three-year waiver from enforcing IP that concerns the “prevention, containment and treatment of COVID-19”.

Support for the waiver has gradually gained momentum since it was initially proposed by India and South Africa in October 2020, including from the US and 60 other countries across various iterations of the draft waiver. Some opposition to the concept of a waiver, however, remains—especially in the UK, Germany and the EU (the EU being a WTO member in its own right).

Supporters of the waiver argue that a waiver will lead to increased vaccination in low-income countries, where vaccination rates remain low and the risk of additional variants is high. Opponents, on the other hand, believe it would discourage innovation while not addressing the real issues—lack of infrastructure and manufacturing know-how—that impede delivery of COVID-19 treatments to developing nations.

The EU, for example, has proposed compulsory licences instead of a waiver in order to better reward rights holders. The WTO will take up this issue again in early March 2022, although one uncertain variable will be Germany’s position under new chancellor Olaf Scholz. In view of the opposition, and because the WTO IP waiver must be unanimous among its members, negotiations remain at an impasse and compromise seems to be unlikely.

An unpredictable impact

The impact of an IP waiver is unpredictable, but it would probably have little short-term effect. For example, manufacturers hoping to benefit from the waiver face a prolonged scale-up time building facilities and acquiring necessary regulatory approvals, meaning it could take years after an agreed waiver to see a definite increase in vaccine supply actually brought about by the waiver.

By then, there may be a surplus of vaccines as current manufacturers continue to expand and increase production. The benefit of an IP waiver also should be weighed against potential long-term consequences, particularly if COVID-19 treatment innovators are not sufficiently compensated for their efforts and therefore less encouraged to develop treatments for the next pandemic. A waiver and the EU’s compulsory licence proposal both face other drawbacks, eg, a forced disclosure of vaccine know-how could result in a permanent loss of trade secrets and ultimately a chilling effect on research and development. This is especially true where much of the IP value in vaccine manufacturing may reside in know-how that is protected through a trade secret (and its non-public nature), as opposed to the public disclosure required by a patent.

The government-level waiver of certain TRIPS IP provisions for COVID-19 is unlikely to have a meaningful impact to combat COVID-19 but may detract from future innovation if not carefully calibrated to balance the numerous competing interests.

Coinciding with the stalling of global government efforts to waive COVID-19 IP protections, there has been a proliferation of agreements involving private companies—with each other and with national governments. The US and the EU both committed billions of dollars and euros to fund COVID-19 vaccine development and to pre-purchase hundreds of millions of doses of vaccines. That approach directly led to the “vaccine nationalism” that served as the impetus for the COVID-19 IP waiver request in the first place: namely, that vaccine doses were overwhelmingly directed to the US and Europe, while much of the rest of the world found it difficult to acquire a significant vaccine supply.

‘Hoarding’ vaccines

In response, companies and governments have taken action to increase the supply of vaccines and other treatments worldwide, as well as to diminish the criticism that they were “hoarding” vaccines. One non-waiver method to supply the world with vaccines, without impacting IP rights, has been COVAX, a partnership of Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI), and the World Health Organization, in connection with Unicef, to procure and distribute COVID-19 vaccines to developing nations.

COVAX has supplied more than 900 million vaccine doses to over 140 countries, with the doses sourced by donor nations and through direct (and discounted) supply agreements with vaccine manufacturers. However, the number of doses donated pales in comparison to the number still needed to vaccinate the world more adequately, particularly in Africa and Asia.

In another example, a vaccine (Corbevax) developed in part by the Texas Children’s Hospital Center for Vaccine Development and Baylor College of Medicine received emergency use approval in India, where Biological E.(BioE) plans to manufacture over 100 million doses a month. Because that vaccine uses existing subunit technology, there is limited IP protection on it, and its developers are seeking to widely expand its footprint in Asia and Africa.

Government intervention

Besides buying and donating doses, national governments have acted in other ways. The US and the EU have expedited regulatory reviews of COVID-19 treatments. The US awarded over €100 million to MilliporeSigma, a Merck subsidiary, to produce materials critical for COVID-19 rapid tests. Before that, the US Defense Production Act was used by President Joe Biden and former President Donald Trump to increase the supply of ventilators, personal protective equipment and other critical supplies and equipment needed to manufacture vaccines.

“The impact of an IP waiver is unpredictable, but it would probably have little short-term effect.” - Matthew Howell, Alston & Bird

There remains vigorous debate over whether, and the extent to which, governments can and should exercise “march in” rights to take ownership of private IP, force compulsory licences, or control pricing, such as through the use of the Bayh-Dole Act (and currently proposed revisions) in the US. That kind of taking may lead to eminent domain-like lawsuits by the rights holder against a government.2

An inventorship dispute on an mRNA-related patent application has been reported between Moderna and the US National Institutes of Health (NIH), although Moderna recently abandoned that application—after it had been allowed by the US Patent and Trademark Office—to afford it more time to discuss and resolve the issue with the NIH. That relationship, and the corresponding IP ownership matter, demonstrates pertinent topics for consideration that may arise from public and private partnerships.

New contracts, new relationships

The approach of private companies to contract with each other, separate and apart from government intervention, has been particularly interesting. These contracts are important because they provide monetary incentives and IP control to rights holders, and at the same time confront the supply and distribution issues that pose a risk to global health. Johnson & Johnson, for example, partnered with Merck to expand manufacturing capacity, while Sanofi contracted with Moderna and BioNTech to manufacture their mRNA vaccines.

These arrangements are not limited to companies in the US and the EU, however. Novavax and AstraZeneca have contracted with Serum Institute of India, the world’s largest vaccine manufacturer, primarily to provide vaccine doses to low- and middle-income countries. Likewise, Johnson & Johnson, Pfizer/BioNTech and Moderna have contracted with companies in India, as well as others in Asia, Africa, and South America, to produce their vaccines. By allocating limited rights and know-how under negotiated agreements, these vaccine developers have designed a technology transfer framework they control, while at the same time reducing IP-related criticism and the likelihood of an eventual waiver for global COVID-19 IP.

COVID-19 lawsuits

So far there have been few infringement suits that concern COVID-19 IP. In the US, Allele Biotechnology and Pharmaceuticals sued Regeneron, as well as Pfizer and BioNTech, claiming that their COVID-19 treatment development (but not manufacture) infringed Allele’s patented mNeonGreen technology. While both of those cases remain pending, it is worth noting that Allele seeks only monetary damages and not an injunction that would prevent Regeneron, Pfizer or BioNTech continuing their alleged infringement.

In another instance of COVID-19 patent-related litigation, Moderna and Arbutus Biopharma appealed post-issuance patent challenge rulings to the US Court of Appeals for the Federal Circuit. Moderna’s challenge involved two Arbutus patents that concern lipid nanoparticles for vaccine delivery. Though the Federal Circuit affirmed that some of Arbutus’s patent claims were unpatentable, it held that not all of them were invalid. It remains to be seen, however, whether Arbutus brings suit against Moderna for alleged patent infringement by Moderna’s COVID-19 vaccine.

With the current climate of cooperation to combat an international threat, and the increasing public pressure for rights holders to share their IP to promote global health, it seems likely that COVID-19-related IP disputes will continue to be resolved through private contract.

Matthew Howell is a partner in the IP litigation at Alston & Bird in Atlanta, Georgia. He can be contacted at:  matthew.howell@alston.com

Lauren Griffin is an associate in the IP litigation group at Alston & Bird in Charlotte, North Carolina. She can be contacted at:  lauren.griffin@alston.com

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