Compulsory Licensing of Patents as a Palliative to COVID-19 Pandemic by Sandra Eke

Patent Application in Nigeria
Image: © Vladimir Voronin | Dreamstime

The disruption occasioned by the coronavirus pandemic globally is the defining occurrence of our time. It has affected all spheres and sectors of the global society, of which the intellectual property terrain is not an exception. With the announcement of the World Health Organisation (WHO) multi-country clinical trials termed “Solidarity Trials”2 and increased funding of various research groups around the world, a cure is imminent. However, this possible cure raises some intellectual property rights concerns regarding the protection of the exclusive patent rights embedded in the inventions of new drugs, modifications of previously existing drugs, or novel medical testing equipment. Some of the drugs approved for clinical trials by WHO already possess patent protection, like Remdesivir,3 and attempts have been made in some countries, like China, to patent similar Covid-19 treatment drugs.4 This has sparked a lot of debate by members of the public who fear that patent owners of essential inventions may abuse their exclusive rights to such patents for the purpose of increasing profitability. To address a problem of this nature, various international instruments and treaties5 signed by several nations,6 introduced the concept of compulsory licensing of patents to permit the exploitation of the exclusive rights held by a patentee over an invention, without necessarily obtaining his consent.7 However, contrary arguments have arisen on the fairness of such a measure on patent owners, its disincentive to innovation, and a hindrance to the right of patent exclusivity. In light of this, one uniform question resonating in the minds of the public is whether these arguments are still viable with reference to the use of such essential inventions during extreme emergencies like the Covid-19 pandemic.

UNDERSTANDING THE NATURE OF PATENTS

A patent is an exclusive protection granted to an inventor as a reward for his/her ingenuity or intellectual creativity. This monopolistic right held by a patentee does not exist in perpetuity; it subsists for a specified duration of time after which it falls into the public domain. The rationale for such a monopoly is to promote economic and technological development, encourage creative efforts, and enable the inventor to derive benefits from his invention before it falls into the public domain. In most jurisdictions, with the aid of international treaties,8 the duration of a patent typically spans for at least 20 years. In Nigeria, a patent expires at the end of the twentieth year from the date of the filing of the patent application.9

It is pertinent to note that it is not all inventions that are patentable. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) provides that “patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step10 and are capable of industrial application.”11 Also, the Patents and Designs Act (PDA) in Nigeria stipulates similar provisions on the patentability of an invention, the PDA provides that “an invention is patentable if it is new, results from inventive activity and is capable of industrial application; or if it constitutes an improvement upon a patented invention which is similarly new, results from inventive activity and is capable of industrial application.”12

RIGHTS CONFERRED BY A PATENT

The exclusive rights to a patent conferred on a patentee could be in relation to either a product or process. In the instance where the patent rights granted relates to a product, the patentee has the exclusive right to prevent third parties from making, using, offering for sale, selling, importing or stocking the resulting patented products for the purpose of sale or use without obtaining its authorization.13 In the instance where the patent rights are granted as a result of a novel process created by the patentee, the patentee has the exclusive right to exclude third parties from using or applying the process, offering the process for sale, selling, or importing the product obtained directly from the use of its process without its consent.14 In addition, patentees also have the exclusive right to assign the patent or transfer the patent by succession, and to conclude licensing contracts.15

It should be noted that these exclusive rights are not without limitations or exceptions. The rights under a patent in Nigeria extends only to acts done for industrial or commercial purposes and does not extend to acts done in respect of a product covered by the patent after the product has been lawfully sold in Nigeria, except in so far as the patent makes provision for a special application of the product, in which case the special application will continue to be reserved to the patentee.16

COMPULSORY LICENSING OF PATENT

Despite the exclusive nature of the rights bestowed on a Patent owner, there are a number of limitations to those exclusive rights. Compulsory licensing is one of such limitations. Compulsory licensing of a patent involves the use of a patented product or process without necessarily obtaining the consent of the Patent owner. The concept of compulsory licenses has been recognized by various international treaties and agreements. Article 5(2) of the Paris Convention for the Protection of Industrial Property17 empowers each contracting state party to the convention with the right to “grant compulsory licenses to prevent abuses which might result from the exercise of exclusive rights conferred by the patent…” Also, Article 31 of the TRIPS Agreement authorizes all member states to the agreement to use compulsory licenses without the authorization of the right holder in appropriate circumstances. Paragraph 5(b) of the Doha Declaration18 similarly states that “each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.

This kind of license is usually applied to and granted by the court based on certain specified grounds19 or authorized by the Minister in the interest of the public. When issued, the license is non-exclusive, it does not permit the compulsory licensee to carry out importations or grant further licenses except in limited circumstances.20 Although it is usually issued after the expiration of a period of four years after the filing of a patent application or three years after the grant of a patent,21 there are other instances when it can be issued before the expiration of the four year period. One of such instances is governmental use of a patented invention as an emergency resort during a period of emergency like the COVID-19 public health emergency. Paragraph 4 of the Doha Declaration expressly permits WTO members to take measures to protect the public health of its citizens. Similarly, Paragraph 16 of the Patents and Designs Act in Nigeria also stipulates when a compulsory license can be issued for public health reasons.

In situations of a public health emergency and in the interest of the public, the Minister is empowered to authorize any person to purchase, make, exercise, or vend any patented article or invention for the service of a government agency in Nigeria.22 Such powers are exercised by the Minister when the minister is satisfied that such patented article or invention is necessary or expedient “…for the maintenance of supplies and services essential to the life of the community; or for securing a sufficiency of supplies and services essential to the well- being of the community…23

However, the enforcement of provisions in various patent laws relating to compulsory licensing during situations of an emergency is not recent. On June 8, 2005, the Eritrean Minister of Health relied on the provisions of the TRIPS Agreement and Doha Declaration to issue a compulsory license for the importation of patented antiretroviral drugs in Eritrea.24 This issuance was following his earlier declaration of a state of emergency on the spread of HIV/AIDS in Eritrea.25 He stated that the antiretroviral medicines would be used non- commercially to treat persons diagnosed with HIV/AIDS in their country.26 Similarly, on 26 October 2005, following a declaration of a state of emergency on the spread of HIV/AIDS in Ghana, the Ghanaian Health Minister issued a compulsory license for the importation of patented generic HIV/AIDS medicines in Ghana.27 He relied on the state’s membership of World Trade Organisation (WTO) after carefully considering two of WTO’s texts, being the TRIPS Agreement and Doha Declaration.28

Also, the Taiwanese government issued a compulsory licence for the generic production of Tamiflu, a patented drug owned by the pharmaceutical manufacturer, Roche, for the treatment of persons diagnosed with the avian flu in order to ensure the country has sufficient quantities of the drug in anticipation of a foreseeable pandemic.29

More recently, following WHO’s declaration of the corona virus as a global public health emergency,30 several countries began taking pre-emptive measures by issuing compulsory licenses and amending existing laws to accommodate the issuance of compulsory licenses in response to the ongoing pandemic. On 18 March 2020, Israel issued compulsory patent licenses for the importation of lopinavir/ritonavir, which is a patented HIV medicine and one of the approved testing drugs by WHO, for the treatment of its corona virus patients.31 On 25 March 2020, the Canadian government amended its existing laws to expedite the issuance of compulsory licenses on patented inventions necessary for the treatment of Covid-19 in Canada.32 Similarly, the Ecuadorian government approved a resolution in its legislative committee on compulsory licensing of patents relating to Covid-19 technologies.33

CONCLUSION

Irrespective of the exclusive nature of patented inventions, such monopolistic rights are not without limitations. During periods of emergencies, like the current public health emergency occasioned by the Covid-19 pandemic, the government is empowered through a system of compulsory licensing to interfere with exclusive patent rights over essential inventions in the interest of the public.34 The arguments raised by various creatives on the resultant effect of such measures as a disincentive to innovation and a clog on patent exclusivity rights can be resolved with the payment of appropriate compensation. The provisions in some of the international treaties relating to patent stipulate that “each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.”35 Taking a glance at what is obtainable in some countries, royalties or lump sum payments can be made to patent owners whose medical inventions are non-voluntarily licensed on public interest grounds, to compensate them for the use of their patents, their ingenuity, and the amount of funding expended during the development stage of such inventions.36 The current Patents and Designs Act in Nigeria which precludes any payments to the patentee whose invention has been compulsorily licensed on public interest grounds should be amended to accommodate payment of reasonable compensation to patentees.37

Also, patentees could consider the idea of voluntary licensing of their patent rights and entering negotiations with relevant authorities once they discover that their inventions are needed in periods of emergencies, as part of their civic duties to the state. Instead of viewing compulsory licensing as a hindrance on their exclusive rights they could consider it as a fulfillment of their collective social responsibility to their community and use this medium to negotiate other kinds of benefits from the government, like tax reductions and other incentives, in exchange for access to their exclusive rights. In this regard, the need to engage the services of an intellectual property lawyer, well-grounded in the field of patent rights protection, would be relevant in negotiating and drafting such agreements.

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1          Sandra Eke, Associate Intellectual Property & Technology Law, SPA Ajibade & Co., Lagos, Nigeria.

2          WHO, “WHO Director-General’s opening remarks at the media briefing on COVID-19” available at: https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on- covid-19          18-march-2020 accessed 15 April 2020.

3    Remdesivir, a Gilead product originally developed for other viral infections, including Ebola and Marburg virus, is one of the drugs approved by WHO for clinical trials for Covid-19. However, Remdesivir is widely patented across various countries in the world. See Medicines Law & Policy, “Covid-19 and the comeback of compulsory licensing” available at: https://medicineslawandpolicy.org/2020/03/covid-19-and-the-come-back-of- compulsory-licensing/ accessed 14 April 2020.

4 IAM, “Wuhan lab says it will seek patent protection of Gilead antiviral” available at: https://www.iam- media.com/coronavirus/wuhan-lab-says-it-will-seek-patent-protection-of-gilead-antiviral accessed 17 April 2020.

5 Like the Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) 1994, Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization; Paris Convention for the Protection of Industrial Property 1883, 21 U.S.T. 1583 and 24 U.S.T. 2140, T.I.A.S. No. 6923; and the Doha Declaration on the TRIPS Agreement and Public Health 2001, WTO Doc. WT/MIN (01)/DEC/1, 41 ILM 746.

6 See WIPO, “WIPO Administered treaties; contracting parties” available at: https://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=2 accessed 13 April 2020.

7 The Center for Internet and Society, “Grounds for Compulsory Patent Licensing in United States, Canada,

China, and India” available at: https://cis-india.org/a2k/blogs/grounds-for-compulsory-patent-licensing-in-us- canada-china-and-india#_ftn40 accessed 14 April 2020.

8 For instance, Article 33 of the Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) provides that “the term of protection available shall not end before the expiration of a period of twenty years counted from the filing date.”

9 S.7 (1) Patents and Designs Act (PDA), Cap P2, LFN 2004.

10 The TRIPS Agreement also provides that the term  “inventive  step” may be deemed to be synonymous with  the term “non-obvious.” That is to say that if it were obvious to a person of ordinary skill in the field concerned, it would not progress to the stage qualifying for patent protection.

11 Article 27(1) of the TRIPS Agreement.

12        S.1 (1) PDA.

13        See S.6 of PDA and Article 28 (1) of the TRIPS Agreement.

14        Ibid.

15        Article 28 (2) of the TRIPS Agreement.

16        S.6 (3) of PDA.

17 The Paris Convention is an intellectual property treaty covering industrial property: patents, trademarks, industrial designs, utility models, service marks, trade names, and geographical indicators. See, WIPO, “Summary   of   the   Paris   Convention   for   the   Protection   of   Industrial   Property   (1883)” available   at: http://www.wipo.int/treaties/en/ip/paris/summary_paris.html accessed 15 April 2020.

18        WHO, “The Doha Declaration on the TRIPS Agreement and Public Health 2001” available at: http://www.who.int/medicines/areas/policy/doha_declaration/en/ accessed 15 April 2020.

19        See Para 1, Pt. 1, Schedule 1, PDA.

20        Para 6, Pt.1, Schedule 1, PDA.

21        Para 1, Pt. 1, Schedule 1, PDA.

22        See Para 15 and 20, Pt. 2, Schedule 1, PDA.

23        Para 20(b) and (c), Pt. 2, Schedule 1, PDA.

24        NLIPW Patents Law, Vol. 1, and No.9, available at: https://nlipw.com/10-examples-of-the-use-of-compulsory- licenses-in-africa-2/ accessed 14 April 2020.

25        Ibid.

26        Ibid.

27        Ministry of Health Ghana, “Notification of Emergency and Issuance of Government Use of License” available at: http://www.cptech.org/ip/health/cl/Ghana.png accessed 15th April 2020.

28        Ibid.

29        ICTSD, “Taiwan issues Compulsory License for Tamiflu” available at: https://www.ictsd.org/taiwan-issues- compulsory-license-for-tamiflu accessed 14 April 2020.

30         BBC      News,     “Coronavirus     declared     global     health     emergency     by      WHO”      available     at:

https://www.bbc.com/news/world-51318246 accessed 15 April 2020.

31        The Emergency Department, Ministry of Health, “A Permit to the State to Exploit an Invention Pursuant to Chapter Six, Article Three of the Patents Law 5727-1967” available at: https://www.keionline.org/wp- content/uploads/A-Permit-to-the-State-to-Exploit-an-Invention-Pursuant-to-Chapter-Six-Article-Three-of-the- Patents-Law-5727-1967.pdf?_sm_au_=iVVvns5WHQ11sMDPvMFckK0232C0F accessed 15 April 2020.

32        IAM, “The key covid-19 compulsory licensing developments so far” available at: https://www.iam- media.com/coronavirus/the-key-covid-19-compulsory-licensing-developments-so-far accessed 17 April 2020.

33 Knowledge of Ecology International “Legislative Committee in Ecuador approves resolution on compulsory licensing of patents relating to the coronavirus” available at: https://www.keionline.org/32429 accessed 17 April 2020.

34 Ibid 20.

35 Paragraph 5(b) of the Doha Declaration and Art. 31(h) of the TRIPS Agreement.

36 A number of countries who issued compulsory licenses on HIV/AIDS drugs in the past years, set royalty rates for the use of such licenses. Malaysia set a royalty rate of 4% for such licenses; Mozambique established a 2% royalty; Zambia set a 2.5% royalty; and Indonesia set a 0.5% royalty. See WHO, “Remuneration guidelines for non-voluntary use of a patent on medical technologies” available at: https://www.who.int/hiv/amds/WHOTCM2005.1_OMS.pdf accessed 17 April 2020.

37 See S.17 (d) of the PDA.

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