During a Public Health Emergency Should Patents Covering Vaccine Development Be Treated as Standard Essential Patents? (Part 2 of 2)
IP rights offer innovators the exclusive right to exploit their innovations while recovering their expenditures, by providing IP owners with the ability to stop others from commercializing infringing products. During a public health crisis such as the COVID-19 pandemic, where time is of the essence, these competing interests rose to the forefront, as the patent community grappled with the question: how do we effectively balance respecting an owner’s IP rights with promoting the research and commercialization of life-saving vaccines in an expedited way? In the rush to develop COVID-19 vaccines, the patent community balanced these competing interests via patent pledges. However, in the face of other public health challenges even well before the COVID-19 pandemic, several alternative approaches were also proposed by others, including the pooling of Standard Essential Patents (SEPs).
In Part 1, we examined what an SEP model would look like in the context of vaccine development during a public health emergency such as the COVID-19 pandemic. Now, in Part 2 of this series, we will examine potential effects of using an SEP model on all parties involved in view of the existing patent pledge regime that helped facilitate the development of a COVID-19 vaccine in record time.
Patent pools provide a mechanism for promoting the development and use of technology and reducing transaction costs where commercialization of a product requires the use of multiple, essential technologies that are protected by patents. However, with a few limited exceptions, the SEP model has not achieved widespread adoption in the life sciences to date.
Like the existing patent pledge system, adopting an SEP regime may promote efficiency in the development of vaccines, but perhaps in a different way. Such a regime would pool complementary IP into a single, centralized source, creating a “one-stop-shop” for licensing packages of essential platform technologies. This would streamline the development and commercialization of inventions where there are multiple patent rights on the underlying technology, as is frequently the case in the life sciences, and reduce the need to individually negotiate and license different aspects of inventions. The use of FRAND terms would create predictable licensing arrangements, saving money and time, reducing transaction costs, and offering stability and certainty at a time when both are lacking and needed. By reducing the logistical and transaction costs, an SEP regime may expedite research and development, which in the vaccine context frequently takes years.
An SEP model may also offer the benefit of standardizing certain platform technologies and promoting further focused development that builds upon the standard. By its very nature, an SEP regime would standardize technology deemed “essential.” In the life sciences, the establishment and adoption of such a technical standard may lead to superior and more consistent treatments, reducing the risks of side effects associated with technologies that do not conform to the standard. For example, in May 2022, the FDA limited the use of Janssen’s COVID-19 vaccine, which utilizes an adenovirus platform, to certain patient subpopulations due to the risk of side effects. If a given technology emerges as a clear frontrunner – as Moderna’s and Pfizer’s mRNA vaccine did – an SEP model would incentivize future research and development focusing and building upon the standardized technology, rather than “non-standardized” technologies. This focused and directed research would promote the development and integration of complementary innovations and expedite the development of vaccines for other disease targets in the future.
However, even though an SEP model may offer critical benefits, its potential implementation needs to be weighed against the existing voluntary patent pledge system, which offers many benefits as well, some of which would be absent in an SEP model.
One benefit of the voluntary patent pledge system is that it incentivizes further innovation while still maintaining the flexibility to develop different and improved technologies. This flexibility is found in two primary ways. First, the patent pledge system creates a framework that encourages the research and development of diverse technologies. By removing the threat of IP litigation or lowering the licensing costs associated with a technology, patent pledges can encourage a multitude of players to become involved in vaccine research and development. Unlike an SEP model, the patent pledge system does not cause a given technology (the “essential technical standard”) to become established and engrained. This model thus permits and incentivizes the development of new and different technologies – including ones that may even outshine the current state-of-the-art. Second, patent pledges can be tailored in the degree that they limit IP owner’s rights, such as in their duration and scope. As we have already seen, Moderna terminated their pledge in March 2022. Additionally, IP owners can decide, on an individual basis, the scope of their IP that they wish to include or exclude from the pledge, or limit their pledge to specific fields of use (e.g., addressing COVID-19), so as to not relinquish their IP rights in the technology entirely.
Voluntary patent pledges are also beneficial because they promote efficiency and expediency, which cannot be understated during a public health emergency. Using the patent pledge model, COVID-19 vaccines were developed in record time – a mere 11 months – a feat that many thought was impossible. Previously, the mumps vaccine held the record as the fastest vaccine to be developed: four years from development to launch. With individual IP owners voluntarily pledging their IP rights, researchers and various market players can collaborate and streamline vaccine research and development, without first having to wait for a particular technology to be deemed the “standard” for addressing the public health emergency. Market players can also avoid delays associated with patent enforcement, as well as the administrative, financial, and political delays that have handicapped prior efforts to pool patents in the face of public health emergencies.
Finally, patent pledges offer strategic business advantages as well, including setting a collaborative tone for other market players, promoting corporate social responsibility, and positioning oneself as a de facto standard that is widely adopted early in the development process. Some have speculated that Moderna’s patent pledge early in the development process may cultivate a new mRNA market founded on their technology and position them to capitalize on licensing deals.
Both the patent pledge and SEP regimes offer distinct advantages to all parties involved. Although the SEP model has found limited applicability in the life sciences in the past, it may be worthwhile to consider the benefits and drawbacks of both options as we prepare for future public health emergencies. With the right preparation and regime to manage IP rights, we may be poised to set new records in the development of future vaccines.
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