Monopoly – a game of life for lockdown

We expect in some households the Monopoly set has emerged and families and friends have triumphed and argued over the evergreen twists and turns of the much loved board game. In the real world monopolies do exist in particular when it comes to intellectual property rights protection.

Novel approaches to the law by government and commerce are needed now more than ever to meet immediate healthcare imperatives. Those approaches may mean using or supercharging little used powers and creating new ones where some do not yet exist. It certainly needs a different mindset.

There are millions of patents and other IP rights protecting numerous and varied health care technologies, digital assets and medical products. It is a general truth that necessity is a catalyst for change. A multi-national effort is currently underway to accelerate research and development for key products from vaccines to testing technologies, from PPE to sanitising capability. We are all eager for the news of the latest breakthrough, hungry to hear of positive news and to get, at the very least, some idea of timelines. All of this work is necessarily underpinned by scientific rigour; precise, high quality data capture; processing and analysis (be that personal or technical). It has to be good data and they have to be good tests. People are dying, the global economy is distressed, rapidly scalable production and distribution capacity is vital. How would you feel if there were technologies not coming to help because the system was too sclerotic or attitudes too narrow to allow it?

At the core of intellectual property rights protection is the concept of the monopoly. For patents it’s a deal with the State. The deal is you can have exclusivity for your technology for a set period of time (usually 20 years) provided that you go public with your patent detailing how you make your product or process. It’s supposed to be pay-back for and to encourage deep investment in innovation that would not otherwise take place. What is not always appreciated is that a patent is not a completely watertight monopoly. There are such things as compulsory licences.

Taken to an extreme a monopolist could hold technology back from the market. We would argue that should not be allowed for COVID-19 critical inventions. The Crown has certain compulsory licensing rights in section 55 of the Patents Act 1977 and there are equivalent provisions in other jurisdictions. But what if a business is sitting on technology protected by IP and others could usefully use it to help beat the pandemic. Where do you draw the line between private interests and public good? This is of course a highly political question.

Remember also that IP protection for any product or process is not usually just about ownership of a single narrow patent right. Normally there will be a bundle of different IP rights in play. Notably, whilst we highlight below some of the possible benefits of the compulsory licensing scheme in the Patents Act, there is no equivalent scheme impacting on proprietorial rights in data. This is why a broad church and direct approach from law makers, Courts, government, research institutions and commerce is needed in the short term, cutting across old concepts and attitudes to meet the immediate need.

Most inventions are improvements on what has gone before. Most improvements in the law come to meet changed conditions and new challenges (but the law is notoriously slow to change).  So what existing laws might be put to use or supercharged for the greater good in these unusual times?

A compulsory licence  can be demanded by the Government or granted by a Court giving the right to use of a patented product or process, without the consent of the patentee. This is not for free: a reasonable royalty has to be paid.

Compulsory licenses are rare. Tens rather than hundreds in the last twenty years. If you want to read a more detailed review of how rare this and how the system works, take a look at the World Health Organisation’s bulletin on compulsory licensing in the field of medicines.

In addition to Crown use under section 55, sections 48 to 54 of the Patents Act allow for the granting of compulsory licences to address anti-competitive uses. There is an exquisite irony in that statement. Put that to one side. The UK Intellectual Property Office (“IPO”) will publish the fact that a compulsory licence has been granted in the UK. It does this also to give third parties the opportunity to bring any issues with the compulsory licence to its attention. The IPO receives very few applications for compulsory licences (estimated to be less than 1 per year on average since the Act came into force) and even fewer of these are granted.

So thinking about COVID-19 when might one think of applying for a compulsory licence. In the current circumstances we would say it is when you know that someone is sitting on technology that there is a demand for, that could make a real difference and that for some reason it is not making it available. Don’t go to Court or the IPO first.  Approach the patent holder, or if you are approached, keep an open mind and do not delay.  If you get rebuffed take a look at the Patents Act and make your own mind up.

In the case of an application made under section 48 above in respect of a patent whose proprietor is not a WTO proprietor, the relevant grounds are:

  1. Where the patented invention is capable of being commercially worked in the United Kingdom, that it is not being so worked or is not being so worked to the fullest extent that is reasonably practicable;
  2. Where the patented invention is a product, that a demand for the product in the United Kingdom–
    1. is not being met on reasonable terms, or
    2. is being met to a substantial extent by importation from a country which is not a member State;
  3. Where the patented invention is capable of being commercially worked in the United Kingdom, that it is being prevented or hindered from being so worked–
    1. where the invention is a product, by the importation of the product from a country which is not a member State,
    2. where the invention is a process, by the importation from such a country of a product obtained directly by means of the process or to which the process has been applied;
  4. That by reason of the refusal of the proprietor of the patent to grant a licence or licences on reasonable terms
    1. a market for the export of any patented product made in the United Kingdom is not being supplied, or
    2. the working or efficient working in the United Kingdom of any other patented invention which makes a substantial contribution to the art is prevented or hindered, or
    3. the establishment or development of commercial or industrial activities in the United Kingdom is unfairly prejudiced;

If a patentee digs its heels in it can go slow and not cooperate with other vital relevant IP too. The current system is likely to be woefully inadequate and probably too late to make a difference. Is it time for a lead from Government and the support of business organisations to speed things up? Food for thought.

For more information on the article above please contact Mark Lomas or visit the Coronavirus/ COVID-19 area on our website.

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