COVID19 and the Patent System


Thursday, December 17, 2020

Stan Kowalski

Professor Stanley Kowalski defends the patent system around the development of the COVID19 vaccine, responding to a New York Times opinion piece pushing for suspension of the system. Produced and Hosted by A. J. Kierstead

Read the NY Times Opinion piece the episode reacts to: https://www.nytimes.com/2020/12/07/opinion/covid-vaccines-patents.html

Check out the COVID19 IP repository, put together by Professor Jon Cavicchi and student Keith Kevelson: https://law.unh.libguides.com/covidpandemicandintellectualproperty

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Legal topics include intellectual property, patents, pharmaceuticals, COVID19, coronavirus, European Union, USPTO, WTO, WHO

Read the Transcript

A. J. Kierstead (Host):

Professor Stanley Kowalski, on the role of hiking government in the production of the COVID-19 vaccine. This is the legal impact presented by the University of New Hampshire, Franklin Pierce School of Law. Now accepting applications for JD Graduate Programs, and online professional certificates. Learn more and apply at lawtounh.edu. Opinions discussed, are solely the opinion on the faculty to your host and do not constitute legal advice or necessarily represent the official views of the University of New Hampshire.

A. J. Kierstead (Host):

So Stan, this is in response to a New York Times opinion piece titled, Want Vaccines Fast, Suspend Intellectual Property Rights. They'll be sure to link in the episode description, if you want to check it out. I'm going to cut right to the chase that, you fundamentally disagree with the sentiment of this piece, but it's a common opinion on healthcare research, development and production. Before we dive deeper, what are the two sides to this argument, so from a very high level?

Stanley Kowalski:

There's multiple, multiple sides, but let's take the two largest arguments that they have. One is that since initial research in the development of vaccine and vaccine platform technologies is largely funded by government funding agencies. For example, the National Institutes of Health in the United States and similar government entities in Britain and Germany. Since that's the case, vaccines, vaccines and medicines should be freely available and not covered and not protected by patent rights. That's argument one.

Stanley Kowalski:

And the second argument is that the patents themselves are monopolies, monopoly rights, which inhibit access to developing countries. For example, in this article, the author site, "100 developing countries have petitioned the WHO, WTO to provide access to the vaccines, without the attendant patent." And I say, in quotes, "Monopoly rights." So there's two different arguments, which advocate that, as the authors point out. Suspend the intellectual property rights, in other words, suspend the patent rights, and that will, in a way, promote access to these vaccines across the globe. This raises the question then, Will that really be the case? In other words, the question is, would we have these vaccines, if there had been no patent system in the first instance?

A. J. Kierstead (Host):

Essentially, the markets have shown otherwise that we've had so many vaccines developed over the last, geez, generations at this point, that kind of prove opposite to their point, correct?

Stanley Kowalski:

Well, yeah. Let's talk about the patent system in a broader perspective, now. The authors of this publication are focusing on one aspect of the patent system, and that is the concept that the patent system is a wall. In other words, a wall which blocks access to the vaccines. The intellectual property rights are conceptualized as a brick or mortar fortress, which inhibits or prohibits the access to these particular vaccines. Now let's look at it in a broader perspective. What is the patent system? The patent system is actually what?

Stanley Kowalski:

The patent system could be viewed as a contract. A contract in what sense? It's a contract between the inventor and the government. The deal is this, the inventor is granted a limited property right, not a monopoly as the authors say multiple times, but it's a limited property right to exclude others from making, using, selling that particular invention. The other side of the bargain then is the inventor is obligated to disclose all aspects of that particular invention in the patent document. What does that do then in the context of vaccines?

Stanley Kowalski:

Well, what that does is, that provides an enormous amount of information and knowledge, which becomes a vast public good. The vast public good then is what we call, off-the-shelf technology. Now, there are many, many, many patents on various vaccine technologies, tens to hundreds of thousands of patents. All that information is publicly available in patent databases. That information that is off-the-shelf technologies, which are critical in rapidly developing subsequent vaccines, because vaccines are assemblies of methods and components. Therefore, in the context of the coronavirus, COVID-19 vaccine technologies, they were developed largely with off-the-shelf, previously patented components, which would not have been there, but for the patent system, which I just described.

A. J. Kierstead (Host):

What role would the World Trade Organization take on this, on either side of this argument? That was a cornerstone of this piece and I was kind of confused how they necessarily have any part, except for distribution.

Stanley Kowalski:

Well, there's the World Trade Organization and the World Health Organization. It's important to distinguish between the two of them. The World Trade Organization is the administrator of multi-lateral treaty called, TRIPS, which is trade-related aspects of intellectual property rights. Now pursuant to that particular treaty, with nearly every country in the world is a member or there of, is there are provisions for forcing licenses on vaccine manufacturers, it's called a compulsory license. However, this can create problems, because a compulsory license can force the owner of the patent to license that particular vaccine technology in a given country. However, there is a tremendous amount of information which is needed to scale up a vaccine to large scale production, that is trade secrets know-how and show-how. That's a big problem with compulsory licensing scheme with the World Trade Organization.

Stanley Kowalski:

The other problem is quality control. Now, when I say that, let's talk about the main vaccines, which are coming to market. We have one by AstraZeneca, one by Pfizer, and one by Moderna. The patent system is important, not only for their business models and to promote investment in research and development, because early stage vaccine technology or research and development of the technology is risky and expensive. But it's also quality control, because as the owners of the patents, they can thereby control who manufacturers and how they manufacture and quality control, which in the context of vaccines is critically important. And the other aspect I want to point out to this too, is the importance of the information. The information in the patent databases, which is quite vast, these companies have sought patents and they will be publishing patents and this information will be subsequently available.

Stanley Kowalski:

The patent system is a wealth of information. I just want to point out too, to make a plug for our school, Professor John [Kavici 00:08:07] and a student named Keith [Kevilson 00:08:09], have gone to the trouble and done a lot of work to assemble, actually on our website, a coronavirus intellectual property resource, which is a compilation of publications, which deal with the production and the intellectual property rights associated with these coronavirus vaccines. So this type of aspect, to the patent system, is often and frequently neglected. You don't see it mentioned in this article at all, the disclosure side of the patent system, which was critical in the rapid assembly of these and development of these particular vaccine technologies.

A. J. Kierstead (Host):

It seems like the way you're outlining is the positive of the current patent system is going to be especially important with regards to COVID-19, which is going to, it already has, is going to mutate over time and it's going to be different. It might very well come back next year with new strains, which would entail a new vaccine. Very similar to the flu vaccine, which every year, there's different strains of the flu that require, every year, the pharmaceutical companies to work off of their existing patents to create the next best flu vaccine for the strains that are currently in the ecosystem.

Stanley Kowalski:

Right. Actually, the BBC recently ran a story where, precisely, they have evidence that, that is occurring. So then that makes it all the more important that the companies that produce vaccines retain their intellectual property rights. And that makes it all the more important that the government funding is there, at the early stages, in order to develop vaccines. To give this all away, in a way, as the authors appear to advocate, would be a disincentive for that kind of public investment and private investment. Because looking at what's happening with every one of the vaccines, it's a public-private partnership between the government, the industry, and frequently, university entity who worked together in partnership. And that system is critical in developing these vaccines.

Stanley Kowalski:

It's somewhat ironic that the vaccines are developed with taxpayer money in Britain, Germany, and the United States, with corporations who are based in these countries. And yet, the developing countries who have not invested in this want access. So I think there's somewhat disparity, and I want to emphasize these discussions have been going on similarly since the AIDS, HIV crisis of 35 years ago. Same arguments of going on, decade after decade. It raises the question as to, at what point will at least some of the developing countries begin to build their own pharmaceutical industries, that will be at the level of Pfizer, AstraZeneca, Moderna and Glaxo to become part of the global industrial pharmaceutical industries and partners in development, as opposed to seeking compulsory licenses and suspending intellectual property rights? So that's another side of this argument too.

A. J. Kierstead (Host):

Going off of what you're saying about the public-private partnership, that the argument in this article basically is, or a portion of it, he outright says that, "Because pharmaceutical companies receive taxpayer funding for the creation and distribution of this drug, it belongs to the people." That isn't how it works in almost any other industry. I mean, farmers receive tax subsidies. It doesn't entitle us to whatever the farmers produce for free, whether or not it's for the betterment of society. There's economics in play, there's future production and research in play and things like that.

Stanley Kowalski:

Right. Frankly, I don't know from the article, when they say that, "The government had funded R & D into the vaccine production," how that funding was actually allocated. So it may have been allocated to public-private partnerships with university studies and industry in order to accelerate development of vaccines. Once again, a lot of the investment is as a public good, which comes from outstanding investment in research and development and in vaccine technologies, which goes back 40 to 50 years. And all that information is actually a repository of public good of information, which is freely available for subsequent development of new innovations in vaccines and medical technology.

A. J. Kierstead (Host):

I mean, Pfizer, on its own part, received no funding upfront. There was some confusion over that. Initially the president of Pfizer actually came and said, "We have not received any operation works to be funded. We were looking for funding after the fact, after we've proven we've got a drug we can distribute." So that way, they can work entirely independently of the government.

Stanley Kowalski:

Right. And also, we have to distinguish, like I said before, "Funding which is to the partners, which work with industry, for example, university and national laboratories, which receive funding and then work with the industry to scale up towards commercialization." Because if, say for example, a university like Stanford is working on a platform technology for vaccines, for the RNA technology, which is in all of these vaccines, apparently, that technology is basically R & D, which is funded by the government. Industry usually doesn't go there because it's too expensive and too risky. So it becomes what I wanted to call, "Public good." It's a public good, because it's funded by the public. It doesn't mean that, we as a public, have immediate access and own every single downstream, innovative product, which comes out of particular stream of money.

Stanley Kowalski:

It creates a public good, which we benefit from, when it's developed into a product. And then industry carries the risk of production and manufacturing, distribution. There's risk at various levels in the stream. The patent system helps industry to manage that risk by having control over the intellectual property rights, but also control over quality control, as I stated before. So this is a process. And for the authors to say, "Well, suspend intellectual property rights." And Pfizer will say, "Okay, then we don't want to be in this business. We'll make medicines for high blood pressure and other diseases, say, multiple sclerosis or something like that, instead of working on these vaccines, because it's too risky." So this is another disincentive. And so the authors are focusing on the so-called monopoly rights argument that this is a public good, therefore it should be accessed, freely accessible to the public. But, okay then, who's going to manufacture it?

Stanley Kowalski:

Are we going to be confident that if we get injected with this, it's going to be okay, if it's being made by everybody and anybody? That's another problem too. I imagine some of the people would rather line up and get the Pfizer vaccine. In terms of compulsory licensing, I think it's important to mention that because the authors bring that up in this, with the AIDS crisis of the 1990s and the patent rights and compulsory licensing. What happened with that was that in Brazil, the Brazilians tried to force a compulsory license for HIV medicines, HIV medications, and they succeeded, they got the license. However, the Brazilians then found out that they didn't have the capability to scale up production and it took them years to scale up production. Now, why is that? It is because the compulsory license is only on the published patent specification and materials, and not on the know-how, show-how and trade secrets.

Stanley Kowalski:

The authors mentioned that, in this particular article about, know-how, show-how and trade secrets, that, "That should also be available." But how do you make that available? What do you say to Pfizer? "Hey, we're going to come into the labs and we're going to get all your information and you're just going to hand it over." Pfizer will say, "I don't think so." So what happened in Brazil, without all that information available, in addition to the patents, the Brazilians were unable to scale up and produce. The HIV medications took years to do that and in the intervening time, many, many people passed away from AIDS.

Stanley Kowalski:

So then this begs the question of, wouldn't it be better, for these particular countries to engage in partnerships with pharmaceutical companies and build their own capabilities in research and development in order to get up to speed and become part of that global R & D system and medical innovation? Because frankly, this has all been going on, as I just said, "Since the late '80s." It's almost 35 years now, that these types of arguments have been going on. It's like, "Okay, great. But why don't we move to the next step, which is, many of these countries building their own innovative capabilities." But that's another podcast for another day.

A. J. Kierstead (Host):

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