Reflections on IP exclusivity in the wake of the Corona virus outbreak

The global outbreak of COVID-19, better known as the Corona-virus, makes daily headlines around the world. As the virus spreads to two of this Kat's most beloved cities – Florence and Tilburg – it is clear that it is affecting many people's lives, even if in most cases it is rather the precautionary measures that are most strongly felt. For instance, travel bans, such as the one imposed by Hong Kong on all travellers from Korea, separate families. And a harrowing two-week quarantine of a cruise ship off the coast of Japan had people stay in their rooms, isolated for 14 days—a measure now criticized for potentially causing more infections. To be sure, the virus is dangerous, but it should be kept in mind that precautionary measures also have their price for daily life.

It goes without saying that many of the developments around COVID-19 touch on IP-related issues. It makes one wonder how a collective problem like the corona virus interacts with the exclusivity afforded by IP rights. This post offers some musings, and readers are warmly invited to share their views or other notable developments.

Patents: exclusivity as a dubious blessing?

At the forefront of many people's minds is when a cure for the Corona flu and an effective vaccine will become available. Last month, the World Health Organization (WHO) announced that remdesivir, an antiviral drug originally developed by Gilead to treat ebola, might be effective to cure patients suffering from the virus. Meanwhile, Fujifilm's flu drug has been mentioned by the Japanese government as a possible cure, while GlaxoSmithKline and Sanofi, among others, are developing vaccines to stop the spread of the virus [as reported by Bloomberg here].

All these companies are likely to seek patent protection for their proposed cures. Indeed, according to Bloomberg, Gilead was granted three patents for remdesivir in China and has five more pending. But researchers from the Wuhan Institute of Virology reportedly also filed a patent application for the use of remdesivir for the treatment of the Coronavirus. This decision was heavily criticized – see an interesting analysis by Enrico Bonadio here – but this Kat wonders what, exactly, is wrong with it. True, the Wuhan Institute of Virology did not itself develop remdesivir. But if it is the one to establish that it can be used to treat COVID-19, there is no reason why it couldn't be awarded a new medical use patent, even if it would be dependent on older Gilead patents. Especially if all the relevant research and clinical testing is performed by or under the supervision of the Wuhan Institute, there seem to be no good reasons to deny them a patent on the use of remdesivir to treat the Corona virus.

Amidst all this patenting activity, the deputy director of China's National Intellectual Property Administration has stated at a press conference that "drug R&D investment is huge, time-consuming and risky, and in particular requires strong intellectual property protection" [here, Chinese sources here and here – with many thanks to fellow Kat Tian Lu]. He also added that if the remdesivir proves effective and is distributed to patients, this may only be done while respecting the legitimate interests of the patentee.

In the context of a global health crisis just short of a pandemic, these statements are somewhat surprising. It is certainly true that developing new pharmaceuticals requires massive investments. And patent law is perhaps the IP form par excellence where private exclusivity is a means to solve collective problems, that can often only be overcome through innovative solutions.

But it is also the case that there has always existed a field of tension between private and public interests in patent law, particularly when it comes to pharmaceuticals. That is why until the 1990's, some countries did not allow the patenting of pharmaceuticals at all, whereas others severely limited the scope of patent exclusivity. A case in point was Section 41 of the UK Patents Act 1949, which allowed any person interested to apply for a license to "a substance capable of being used as food or medicine", which would be granted by the comptroller unless there were "good reasons" to refuse the application. It was not repealed until 1977.

Indeed, in light of the severe health risks and massive damage caused by the corona virus world-wide, this might be an appropriate instance to curtail exclusivity to the benefit of the common good. Daniel Hemel and Lisa Larrimore Ouellette suggested that the government award a "large cash prize for any firm that develops a successful coronavirus vaccine". If designed well, such a prize would provide adequate incentives for private firms to make the necessary investments, while ensuring an affordable supply of the drug once it becomes available. Prizes are frequently advocated as alternatives to patents in certain fields of technology, and history shows they can be quite effective in spurring innovation, particularly when society is faced with a well-defined problem that is difficult to solve [see here for an interesting analysis on the subject by Robert Burrell and Katherine Kelly].

Another option is the use of compulsory licenses. The Corona virus clearly presents an imminent threat to public health which, in most jurisdictions, is likely to justify the grant of a compulsory license. FiercePharma reports that Gilead is now offering remdesivir "free of charge" – this Kat could not verify this rather spectacular gesture in an original source – which, if true, no doubt means the threat of a compulsory license is real. Indeed, it should be: patent offices, health ministries and courts should feel no qualms about accepting appropriate limits to patent exclusivity in cases where the public interest so strongly requires immediate and affordable access to a certain medicine.

 

Luckily for Lucrezia, the Corona virus doesn't like kittens

Trade marks: exclusivity as an inadvertent curse?

If the patent situation shows that private interests can impede the solution to a public problem, trade mark law shows an interesting corollary, whereby the public problem can seriously affect the trade mark holder's private interests. The purpose of trade mark law is, first and foremost, to claim exclusive use of a designation to indicate the origin of certain goods or services. However, the association of a designation with a specific company may become a curse, rather than a blessing, in the wake of global crises such as the Corona virus outbreak.

For instance, several news outlets reported that the Corona beer brand has seen a sharp drop in sales as a result of negative associations with the virus or even fears that the beer may help spread it [here, here and here]. Fact-checking website Snopes considers these claims false [here] but intuitively, one can imagine that the outbreak might very well affect consumer perception of the brand. It wouldn't be the first time: in 1982 there was a diet candy with the rather unfortunate name AYDS, which won't have helped sales after the global outbreak of the HIV epidemic in the 1980's.

Then again, they say there is no such thing as bad publicity, so the news about the decline in Corona sales may end up helping the brand. And in any event, a smart marketeer might be able to find a way to turn the negative attention around. Perhaps we should anticipate a special edition Corona beer called Antidote?

Conclusion

While patents are undeniably an important driver of pharmaceutical research in today's world, patent exclusivity should never outweigh actual lives of patients. If a cure or vaccine to the virus is finally found, the first concern should be how to get it to the countries suffering the worst outbreaks, not the earning potential of the patentee—which is exactly why a prize might be the best solution in this particular case, as it would ensure the invention is fairly rewarded but also fairly available.

Similarly, the outbreak reminds us that even the strongest brands can be vulnerable to unpredictable world events. It is to be hoped that no-one will actually believe the Corona virus is spread by Corona beer, and that the brand will emerge from the outbreak stronger. Perhaps this episode can serve as a lesson in humility to brand holders not to seek confusion in improbable quarters themselves through overzealous enforcement [as Hugo Boss was recently criticized for doing by a British comedian who legally changed his name to "Hugo Boss"].

In sum, the Corona virus forces people everywhere around the world to make changes to their daily lives, big or small. They often serve as useful reminders: we must remember to wash our hand often, or to be mindful of the risk of contagion in workspaces. The outbreak should have a similar effect in the realm of IP. It should remind us not to take for granted the down sides of IP exclusivity, no matter how beneficial it might be in the vast majority of 'ordinary' cases.