28 Apr 2020

The COVID-19 crisis has seen an unprecedented international effort to develop technologies to diagnose, prevent and treat this deadly disease.

Alongside companies with existing COVID-19 relevant technologies, many businesses are transforming their operations to support these efforts. This presents challenges for owners of existing relevant intellectual property (IP) whose IP rights are now being infringed, and for those rapidly developing technologies or manufacturing support, who may be knowingly or inadvertently infringing others’ IP.

This article explores these pressing IP issues, and looks at how they can be resolved.

Existing IP Owners

Many of the products now being manufactured in substantial quantities to meet the demand will already be protected by existing IP. This IP may be infringed by companies who do not traditionally operate in the sector, but have now adapted and turned to manufacturing products needed to meet urgent requirements, including ventilators and PPE.

Other IP owners may find their IP being infringed by competitors or new entrants developing new COVID-19 technologies, such as diagnostics tests.

In normal circumstances, these IP owners would either demand the infringer take a royalty-based licence, seek an injunction or sue for infringement and damages. However, on an ethical and reputational basis, none of these options is likely to be feasible in the current crisis.

What actions should these IP owners consider?

  • Offering royalty-free licences of their IP for the duration of the pandemic. Making licences available on standard terms will not only allow IP holders to support current efforts, but also to control the use of their IP later on. It’s important to consider what, if any, associated unpatented know-how will also be made available and under what terms, and how the relevant IP licences will be phased out or transformed into royalty-bearing licences after the pandemic. This will be a particularly sensitive area where the licensee is a competitor.
  • Collaborating with other companies to pool IP and resources and develop solutions. This could be under collaboration agreements or by setting up a joint venture company. Either way, these collaborations require detailed thought on how the parties will deal with arising IP both during and especially after the end of the collaboration.
  • Making key IP available by way of IP pools. Where a number of companies own relevant IP, they may wish to consider making it available by way of an IP pool with a royalty-free licence. Again, detailed consideration will be needed on dealing with unpatented know-how now and after the pandemic.
  • Finally, the government has recently announced a fund to indemnify companies which may have infringed third party IP as a result of designing or manufacturing ventilators for the COVID-19 effort. However, in light of the potential reputational damage that may arise as a result of suing the indemnified parties, IP owners may prefer to take a more collaborative approach.

It may be tempting to simply let things play out for the time being. However, addressing these issues early on will allow IP owners to enhance their reputation by showing their commitment to resolving the crisis, whilst also ensuring a greater level of control over their IP long term, with the potential for future commercial opportunities and collaborations.

What should new players do?

Companies such as car manufacturers who are dedicating their facilities to manufacturing ventilators and similar devices, and others who are developing novel technologies such as COVID-19 diagnostics tests or 3D printed PPE, may be infringing existing IP.

These companies may believe they probably won’t get sued during the pandemic, but this is unlikely to be the case once it’s over. This is important if they wish to stay in the market once the current need has passed, and if they want to avoid being sued for damages post-crisis. Addressing the issues now will help these companies avoid potential comeback later, and identify possible strategic and commercial opportunities.

Recommended actions

Those developing or manufacturing COVID-19 technologies should consider:

  • Requesting a licence from the relevant IP owner. This may be easier said than done, as it will be necessary to identify what relevant IP there is and who owns it. Companies are unlikely to have the time or want to invest resources in freedom-to-operate searches at this critical time. They may therefore have to rely on relevant IP owners publicising details of their IP and making it easily available.
  • Designing around existing IP. For those with a longer-term interest in the market, designing around existing IP may be the preferred solution. However, this requires an understanding of the current patent landscape and considerable development investment, and will not be suitable for those who are supporting the manufacturing effort, with no wish to continue post-pandemic.
  • Collaborating with relevant IP owners. For many companies, particularly those who are considering staying in the market after the pandemic, entering into a formal collaboration agreement with a relevant IP owner could not only provide a solution to the current challenge, but also commercial opportunities in the future. This is particularly relevant if the company can contribute technology or facilities to the relevant IP owner, for mutual benefit.
  • Seek a compulsory licence of relevant IP. Where a voluntary licence is not available, companies may seek a compulsory licence of the relevant IP under the TRIPS agreement. In times of emergency it’s not necessary to negotiate a commercial licence with the IP owner first, but they will be able to charge a royalty if the licence is granted.
  • Seek Crown-authorised patent use. Where UK patents are concerned, during an emergency it is possible to ask the government to authorise an action that would otherwise infringe a patent. If the authorisation is granted, no royalty will be payable, but it will still be necessary to identify the relevant IP in the first place.

Balancing the present and future

When deciding how to proceed, companies should consider both their short-term need and their longer term strategic interest. A solution that works right now may not be best for those wishing to stay in the market long-term, and the need for an efficient stopgap needs to be balanced against the strategic benefits of negotiating a longer lasting solution.

For more advice about IP issues, related or unrelated to the current crisis, please get in touch.