Covid-19 vaccines: intellectual property issues, including sharing of patents, licensing and government rights to compulsory licensing – the French perspective.

Tuesday 25 May 2021

Francine Le Péchon-Joubert

De Gaulle Fleurance & Associés, Paris

flepechonjoubert@dgfla.com

Carlyne Sevestre

De Gaulle Fleurance & Associés, Paris

csevestre@dgfla.com

The production and distribution of Covid-19 vaccines are considered to be too slow in many countries, including France, and intellectual property rights, and more particularly, patent law, might be observed as a solution to spread access to vaccines.

Compulsory licensing dispositions

Article 31 of the TRIPS Agreement on compulsory licenses

On the international front, Article 31 of the agreement on Trade-Related Aspects of Intellectual Property Rights ('TRIPS') authorises governments to issue compulsory licenses without the consent of the patent owner. Such compulsory licenses are subject to requirements such as the determination of the scope and duration of the license, non-exclusivity and non-assignment, and adequate remuneration. Initially, compulsory licensing was limited to the supply of the domestic market of the Member State authorising such use.[1]

To address the needs of countries with insufficient medicine manufacturing capacity, Article 31 bis has been added to the TRIPS Agreement. It authorises World Trade Organization Member States to issue compulsory licenses to the extent necessary for the production of pharmaceutical products and their export.[2]

EU Regulation No 816/2006 on compulsory licensing

The European Union, supporting the TRIPS amendment, adopted Regulation No 816/2006 on 17 May 2006 on the compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems.

This regulation intends to address public health problems faced by the least developed countries and other developing countries, and in particular, to improve access to affordable medicines that are safe and effective. Such a regulation addresses the utmost desirability of promoting the transfer of technology and capacity building to countries with insufficient or no manufacturing capacity in the pharmaceutical sector in order to facilitate and increase the production of pharmaceutical products by those countries.

Article 6 of Regulation No 816/2006 authorises any person to submit an application for a compulsory license to a competent authority where patents have effect, and cover its intended activities of manufacture and sale for export. Naturally, this regulation prevents importation in the EU of products manufactured under a compulsory license. Articles L 613-17-1 and L 613-17-2 of the French Intellectual Property Code explicitly refer to this regulation.

Compulsory and ex officio licenses in France

French legislation offers different restrictive licensing systems: compulsory or ex officio licenses being issued by a judicial or administrative decision, respectively.

Regarding the compulsory license, Article L 613-11 of the Intellectual Property Code states that any person may, on the expiry of a period of three years after the grant of a patent or four years from the date of filing of the application, obtain a compulsory license if at the time of the request, and except where there are legitimate excuses, the owner of the patent has not begun to operate the patented invention or has not marketed the patented product in sufficient quantity to satisfy the needs of the French market.

The application for a compulsory license is made to the judicial court. It shall be proved that the applicant has not been able to obtain a license from the patent owner, and that the applicant is in a position to exploit the invention in a serious and effective manner.

In any case, if a compulsory licensee does not comply with the conditions under which the license was granted, the owner of the patent and the other licensees may obtain the withdrawal of the compulsory license.

Regarding the ex officio license, Article L 613-16 of the Intellectual Property Code states that it may be issued in relation to public health and in the absence of an amicable agreement with the owner of the patent. An ex officio license is issued by the minister responsible for industrial property at the request of the minister responsible for public health, accompanied by the opinion of a dedicated committee. This license concerns any patent already granted, in particular, for a medicinal product; medical device; related therapeutic product; or process for obtaining them, product necessary for obtaining them or process for manufacturing such a product.

Precited patents may be subject to ex officio licensing in the interest of public health, but only when the patented products are made available to the public in insufficient quantities or quality, or at abnormally high prices, or where the patent is exploited under conditions contrary to the interest of public health or constituting practices declared to be anti-competitive. In this last case or in the emergency case, the minister responsible for industrial property shall not be required to seek a prior amicable agreement.

Once subject to an ex officio license, any person may apply to the minister for the grant of such a license on the concerned patent.

Furthermore, ex officio licenses can also be issued to satisfy the needs of the national economy and defence.[3]

Compulsory and ex officio licenses are non-exclusive and shall be granted under specific conditions, in particular, as regards their duration, scope and royalties.[4] For ex officio licenses, in the absence of an amicable agreement approved by the concerned ministers, royalties shall be fixed by the judicial court.

The result of these dispositions is that French legislation offers different ways to lift patent exclusivity, with clear conditions and delays.[5] However, to the best of our knowledge, these licensing systems have never been used in France.

In addition to this licensing system, Law No 2020-290 of 23 March 2020 on the emergency response to the Covid-19 pandemic inserted a new Article L 3131-15 I 7° to the Public Health Code. It states that where a health emergency has been declared, for the sole purpose of guaranteeing public health, the Prime Minister may, by a decree issued on the report of the Minister of Health, order the requisition of any goods and services necessary to combat the health disaster. This article applies for the duration of the health emergency state, that is, until 31 December 2021.[6]

Similarly, this article has not been used yet for Covid-19 vaccine requisition or any goods necessary to their production.

The COVAX programme

In the current health emergency, the use of these licensing systems is highly debated. At the international scale, calls for granting compulsory licenses are numerous, including from United Nations Human Right Experts.[7]

Financing, research and pre-orders flow in from developed countries, so to answer the question of Covid-19 vaccine access by developing countries, the COVAX Programme has been set up by the World Health Organization and the Vaccine Alliance (GAVI). This programme aims to provide all countries, particularly developing countries, with Covid-19 vaccines.

As part of this programme, EU Member States might use the compulsory licensing offered by Regulation No 816/2006.

France could implement Regulation No 816/2006 and Article L.613-17-1 of its Intellectual Property Code to participate in the COVAX Programme other than financially. As a matter of fact, France could grant compulsory licenses for pharmaceutical products manufactured in France to be exclusively exported to eligible importing countries that need Covid-19 vaccines. By doing so, French pharmaceutical firms could produce vaccines, under compulsory licenses, to export them as part of the COVAX Programme.

However, to this day, compulsory or ex officio licensing has not been considered by the French Government as a solution to ease access to Covid-19 vaccines, not for the internal market or to export to developing countries.

Why compulsory licensing will not speed the spread of Covid-19 vaccines

The lack of use of these well-regulated licensing systems has several justifications or explanations.

First, we do not yet know whether the pharmaceutical firms that now offer Covid-19 vaccines, such as Pfizer and BioNTech, Moderna and AstraZeneca, have actually filed patents to protect their vaccines. On the contrary, Pfizer, BioNTech and Moderna licensed patents related to the RNA messenger method, filed in 2005 and held by Pennsylvania University, to develop and produce their own vaccines.

Second, it has not yet been demonstrated whether conditions of compulsory and ex officio licensing have been met, that is, patents filed or granted for more than three or four years have not been operated, the patent owner refuses to license or the patented vaccines are made available to the public in insufficient quantities or quality, at abnormally high prices or under anti-competitive practices.

Third, compulsory and ex officio licensing is not used because of the fear of setting a precedent, with a potential impact on research and development at pharmaceutical firms. Some consider that such a practice could frighten pharmaceutical firms with regard to the protection of their future innovations and consequently make them disinterested in the market. Still, we note that Moderna announced that it will not enforce its 'Covid-19 related patents against those making vaccines intended to combat the pandemic'.[8]

Moreover, compulsory or ex officio licensing will not automatically ease access to vaccines because their complex production might also be subject to know-how. Clinical files submitted to the European Medicines Agency in order to obtain marketing authorisation that contain precious scientific data can also be subject to secrecy. Therefore, patents are not the only rights that protect vaccines, so their waive could have only a few repercussions on their access.

Finally, the production of the quantities of vaccines currently expected worldwide requires important materials and logistical resources. Only a few firms are able to entirely produce Covid-19 vaccines and, combined with the desire to preserve immaterial rights, this leads to a partitioning of vaccine production between different actors, each having its role in the production chain, with a non-compressible effect on the production time.

If compulsory licensing systems exist to address public health issues in the French national market as well as in developing countries, it appears that such licenses require specific conditions that are not clearly met to date, and their enforcement is long and complex.

Compulsory and ex officio licenses are, at best, a good threat for the government while it negotiates more important Covid-19 vaccine production or fair, reasonable and non-discriminatory (FRAND) licenses with pharmaceuticals industries, but as a matter of fact, they do not answer the question of know-how, trade secrets and material capacities for the massive production of complex vaccines in a very short time.

Notes

 

[1] Art 31.f.

[2] Protocol of 6 December 2005 amending the TRIPS Agreement, entered into force on 23 January 2017.

[3] Arts L 613-18 and L 613-19 of the Intellectual Property Code.

[4] Arts L 613-12 and L 613-13 of the Intellectual Property Code for compulsory licenses; and Art L.613-17 of the Intellectual Property Code for ex officio licenses.

[5] Arts R 613-4 and seq of the Intellectual Property Code.

[6] Law No 2021-160 of 15 February 2021 extending the state of health emergency.

[7] Statement by UN Human Rights Experts on 9 November 2020 www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=26484&LangID=E accessed 21 April 2021.

[8] Moderna press release 8 October 2020 https://investors.modernatx.com/node/10066/pdf accessed 21 April 2021.

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