The innovative workforce has been redirected. Spurred by the Coronavirus pandemic, scientific research that once floundered from a lack of funding has been rejuvenated.[i] The current innovation upsurge is not out of sheer interest for promoting the useful arts, however, but out of necessity. Around the world, inventors are developing ways to cope with the new world engendered by COVID-19, from treatments for fighting disease to methods of predicting the next outbreak.
Alongside the proliferation of inventions and discoveries is the issue of financial rewards for these innovations. Should inventions related to fighting COVID-19 be patentable? Many economists and lawmakers are critical of the exclusivity period granted by patents, especially in the case of vaccines and drugs. Recently, several members of Congress requested “no exclusivity” for any “COVID-19 vaccine, drug, or other therapeutic.”[ii]
This article examines the patentability of developments in the Biotechnology, Pharmaceutical, and Personal Protective Equipment (PPE) technology sectors related to COVID-19 and looks into the merits of patent criticism. Part two of this series examines the Patentability of COVID-19 Software Inventions – Artificial Intelligence (AI), Data Storage & Blockchain.
The Patentability of Inventions Related to COVID-19 – Biotechnology and Pharmaceutical Inventions
No doubt the most vociferous anti-patent sentiment is directed at the idea of patenting vaccines and treatments which enable companies to price their products well above the marginal cost of production. Remdesivir, which was recently approved by the FDA for emergency COVID treatment, has a projected cost ranging from $390 to $4,460 per treatment course depending on the mortality benefit.[iii] But an outright prohibition of patent protection for these inventions is an over-correction of these understandable concerns. Patent protection has already been eroded over the last ten years and further erosion could lead to a decline in US leadership in the healthcare sector over time[iv]
Disclosure of Ideas
One of the basic principles of having patents is that a period of exclusivity is granted in return for inventors disclosing their inventions to the public, thereby probing further downstream studies and research into the disclosed art. Proponents of patent pools and “open science” argue that the free exchange of ideas will occur without the disclosure requirement that accompanies patent application, pointing to systems like the WHO’s Global Influenza Surveillance and Response System (GISRS). Under GISRS, experts around the world collaborate to develop each year’s flu vaccine.[v] GISRS is cited as proof that a patent-less system does not prohibit the disclosure of ideas and findings.[vi]
This type of open science system is not realistic for private companies, however. GISRS is composed of national collaborating centers that collect data from participating public entities such as federal agencies and state public health laboratories.[vii] The participants of GISRS have very little commercial stake when it comes to the disclosure of research findings. A similar system cannot be expected to work in the realm of private enterprise especially in the long term.
Incentive to Innovate
Inventions related to the biotechnology and pharmaceutical spheres are already extremely difficult to patent as it is due to Mayo v. Prometheus Laboratories.[viii] The Supreme Court found that a therapeutic treatment for a gastrointestinal disorder was not patentable whatsoever, believing that the diagnostics involved in the treatment was similar to patenting a “law of nature.” The aftermath of Mayo was a significant increase in rejections against patent applications related to biotechnology and pharmaceuticals on the grounds of them being non-patentable subject matter.[ix] The ongoing cost of prosecution in the face of these rejections was especially damaging to small and medium-sized companies that lack the financial means to repeatedly contend with the USPTO.[x]
Importantly, Mayo is a case related to diagnostics. Therefore, inventions directed to diagnostics are even more difficult to patent. It is no secret that the US has struggled when it comes to providing widespread and accurate COVID testing. Judge Michel of the Federal Circuit believes that Mayo contributed to the country’s unpreparedness for the crisis by eliminating “incentives for private companies to develop diagnostic tests”.[xi] There are many reasons for the failure of the test rollouts, but the US would have been better positioned to fight the pandemic had the proper innovative incentives been in place for the companies that we now rely on.
Recouping Cost
Currently, Gilead has not yet set a price for remdesivir but will be donating its initial supply of 1.5 million doses.[xii] Ultimately, they will set a price that will most likely be above the marginal cost of $10 to produce a 10-day course of treatment per patient. Remdesivir was in the process of R&D for over ten years. Originally developed for SARS and MERS, the commercial price of remdesivir will not be commensurate with the cost of manufacturing but rather the overall investment towards developing the drug over time.[xiii] The company also recently announced in a SEC filing that they could invest up to “$1 billion or more” in remdesivir in 2020.[xiv] Pricing remdesivir marginally above cost will result in a substantial net loss for Gilead that will hurt the company’s incentive to develop further treatments. This is an unwelcomed fact but ignoring it would be wrong and dangerous.
The Patentability of Inventions Related to COVID-19 – PPE
Patents are not to blame for the shortage of PPE – Personal Protective Equipment and respirators. PPE and respirators are primarily manufactured abroad and due to the current disproportionate balance between supply and demand, they are scarce commodities. But for some reason, the Governor of Kentucky wants 3M to license its patents on the N95 mask so that “everybody else can manufacture it.”[xv] Even Nobel laureates suggest that 3M’s patents over the N95 mask “have made it more difficult for new producers to manufacture medical-grade face masks at scale.”[xvi]
3M does not have a monopoly over the N95 mask. No one does. Honeywell, Kimberly-Clark Corporation, Moldex-Metric, GlaxoSmithCline are just a few companies among many that are listed by the CDC that make and manufacture NIOSH-approved N95 respirators.[xvii]
The Coalition for Breathing Safety forewarned the shortage of respirators in 2006. Manufacturers of the N95 mask were forced to move offshore due to the cost of defending product liability suits over the tightly regulated masks.[xviii] Again, patents are not to blame for the shortage and do not stand in the way of manufacturers other than 3M from making these products.
See the next segment: Artificial Intelligence (AI), Data Storage & Blockchain – the patentability of COVID19 Software Inventions.
The opinions stated herein are the sole opinions of the author and do not reflect the views or opinions of the National Law Review or any of its affiliates.
