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COMPULSORY LICENSING OF
PATENTS AS A PALLIATIVE TO COVID-19 PANDEMIC[1]

 The
disruption occasioned by the corona virus pandemic globally is the defining
occurrence of our time. It has affected all spheres and sectors of the global
society, of which the intellectual property terrain is not an exception. With
the announcement of the World Health Organisation (WHO) multi-country clinical
trials termed “Solidarity Trials”[2] and increased funding of various
research groups around the world, a cure is imminent. However, this possible
cure raises some intellectual property rights concerns regarding the protection
of the exclusive patent rights embedded in the inventions of new drugs,
modifications of previously existing drugs or novel medical testing equipment.
Some of the drugs approved for clinical trials by WHO already possess patent
protection, like Remdesivir,[3] 

and attempts have been made in some
countries, like China, to patent similar Covid-19 treatment drugs.[4] This has sparked a lot of debate by
members of the public who fear that patent owners of essential inventions may
abuse their exclusive rights to such patents for the purpose of increasing
profitability. To address a problem of this nature, various international
instruments and treaties[5] signed by several nations,[6] introduced the concept of compulsory
licensing of patents to permit the exploitation of the exclusive rights held by
a patentee over an invention, without necessarily obtaining his consent.[7] However, contrary arguments have
arisen on the fairness of such measure on patent owners, its disincentive to
innovation and hindrance to the right of patent exclusivity. In light of this,
one uniform question resonating in the minds of the public is whether these
arguments are still viable with reference to the use of such essential inventions
during extreme emergencies like the Covid-19 pandemic.

UNDERSTANDING THE NATURE OF
PATENTS

A patent is an exclusive
protection granted to an inventor as a reward for his/her ingenuity or
intellectual creativity. This monopolistic right held by a patentee does not
exist in perpetuity; it subsists for a specified duration of time after which
it falls into the public domain. The rationales for such monopoly is to promote
economic and technological development, encourage creative efforts and to
enable the inventor derive benefits from his invention before it falls into the
public domain. In most jurisdictions, with the aid of international treaties,[8] the duration of a patent typically
spans for at least 20 years. In Nigeria, a patent expires at the end of the
twentieth year from the date of the filing of the patent application.[9]

It is pertinent to note that
it is not all inventions that are patentable. The Agreement on Trade Related
Aspects of Intellectual Property Rights (TRIPS Agreement) provide that “patents
shall be available for any inventions, whether products or processes, in all
fields of technology, provided that they are new, involve an inventive step[10] and are
capable of industrial application
.”[11]  Also, the Patents and Designs Act
(PDA) in Nigeria stipulates similar provisions on the patentability of an
invention, the PDA provides that “an invention is patentable if it is new,
results from inventive activity and is capable of industrial application; or if
it constitutes an improvement upon a patented invention which is similarly new,
results from inventive activity and is capable of industrial application
.”[12]

 

RIGHTS CONFERRED BY A PATENT

The exclusive rights to a
patent conferred on a patentee could be in relation to either a product or
process. In the instance where the patent rights granted relates to a product,
the patentee has the exclusive right to prevent third parties from making,
using, offering for sale, selling, importing or stocking the resulting patented
products for the purpose of sale or use without obtaining its authorization.[13] In the instance where the patent
rights are granted as a result of a novel process created by the patentee, the
patentee has the exclusive right to exclude third parties from using or
applying the process, offering the process for sale, selling, or importing the
product obtained directly from the use of its process without its consent.[14] In addition, patentees also have
the exclusive right to assign the patent, or transfer the patent by succession,
and to conclude licensing contracts.[15]

It should be noted that
these exclusive rights are not without limitations or exceptions. The rights
under a patent in Nigeria, extends only to acts done for industrial or
commercial purposes and does not extend to acts done in respect of a product
covered by the patent after the product has been lawfully sold in Nigeria,
except in so far as the patent makes provision for a special application of the
product, in which case the special application will continue to be reserved to
the patentee.[16]

COMPULSORY LICENSING OF
PATENT

Despite the exclusive nature
of the rights bestowed on a Patent owner, there are a number of limitations to
those exclusive rights. Compulsory licensing is one of such limitations.
Compulsory licensing of a patent involves the use of a patented product or
process without necessarily obtaining the consent of the Patent owner. The
concept of compulsory licenses has been recognized by various international
treaties and agreements. Article 5(2) of the Paris Convention for the
Protection of Industrial Property[17] empowers each contracting state
party to the convention with the right to “grant compulsory licenses to
prevent abuses which might result from the exercise of exclusive rights
conferred by the patent
…” Also, Article 31 of the TRIPS Agreement
authorizes all member states to the agreement to use compulsory licenses
without the authorization of the right holder in appropriate circumstances.
Paragraph 5(b) of the Doha Declaration[18] similarly states that “each
member has the right to grant compulsory licenses and the freedom to determine
the grounds upon which such licenses are granted.

This kind of license is
usually applied to and granted by the court based on certain specified grounds[19] or authorized by the Minister in
the interest of the public. When issued, the license is non-exclusive, it does
not permit the compulsory licensee to carry out importations or grant further
licenses except in limited circumstances.[20] Although it is usually issued after
the expiration of a period of four years after the filing of a patent
application or three years after the grant of a patent,[21] there are other instances when it
can be issued before the expiration of the four year period. One of such
instances is governmental use of a patented invention as an emergency resort
during a period of emergency like the COVID-19 public health emergency.
Paragraph 4 of the Doha Declaration expressly permits WTO members to take
measures to protect the public health of its citizens. Similarly, Paragraph 16
of the Patents and Designs Act in Nigeria also stipulates when a compulsory
license can be issued for public health reasons.

In situations of a public
health emergency and in the interest of the public, the Minister is empowered
to authorize any person to purchase, make, exercise or vend any patented
article or invention for the service of a government agency in Nigeria.[22] Such powers are exercised by the
Minister when the minister is satisfied that such patented article or invention
is necessary or expedient “…for the maintenance of supplies and services
essential to the life of the community; or for securing a sufficiency of
supplies and services essential to the well-being of the community…
[23]

However, the enforcement of
provisions in various patent laws relating to compulsory licensing during situations
of an emergency is not recent. On June 8, 2005, the Eritrean Minister of Health
relied on the provisions of the TRIPS Agreement and Doha Declaration to issue a
compulsory license for the importation of patented antiretroviral drugs in
Eritrea.[24] This issuance was following his
earlier declaration of a state of emergency on the spread of HIV/AIDS in
Eritrea.[25] He stated that the antiretroviral
medicines would be used non-commercially to treat persons diagnosed with
HIV/AIDS in their country.[26] Similarly, on 26 October 2005,
following a declaration of a state of emergency on the spread of HIV/AIDS in Ghana,
the Ghanaian Health Minister issued a compulsory license for the importation of
patented generic HIV/AIDS medicines in Ghana.[27] He relied on the state’s membership
of World Trade Organisation (WTO) after carefully considering two of WTO’s
texts, being the TRIPS Agreement and Doha Declaration.[28]

Also, the Taiwanese
government issued a compulsory licence for the generic production of Tamiflu,
a patented drug owned by the pharmaceutical manufacturer, Roche, for the
treatment of persons diagnosed with the avian flu in order to ensure the
country has sufficient quantities of the drug in anticipation of a foreseeable
pandemic.[29]

More recently, following
WHO’s declaration of the corona virus as a global public health emergency,[30] several countries began taking
pre-emptive measures by issuing compulsory licenses and amending existing laws
to accommodate the issuance of compulsory licences in response to the ongoing
pandemic. On 18 March 2020, Israel issued compulsory patent licenses for the
importation of lopinavir/ritonavir, which is a patented HIV
medicine and one of the approved testing drugs by WHO, for the treatment of its
corona virus patients.[31] On 25 March 2020, the Canadian
government amended its existing laws to expedite the issuance of compulsory
licenses on patented inventions necessary for the treatment of Covid-19 in
Canada.[32] Similarly, the Ecuadorian
government approved a resolution in its legislative committee on compulsory
licensing of patents relating to Covid-19 technologies.[33]

CONCLUSION

Irrespective of the
exclusive nature of patented inventions, such monopolistic rights are not
without limitations. During periods of emergencies, like the current public
health emergency occasioned by the Covid-19 pandemic, the government is
empowered through a system of compulsory licensing to interfere with exclusive
patent rights over essential inventions in the interest of the public.[34] The arguments raised by various
creatives on the resultant effect of such measures as a disincentive to
innovation and a clog on patent exclusivity rights can be resolved with the
payment of appropriate compensation. The provisions in some of the
international treaties relating to patent stipulate that “each member has
the right to grant compulsory licenses and the freedom to determine the grounds
upon which such licenses are granted.”[35]
 Taking
a glance at what is obtainable in some countries, royalties or lump sum
payments can be made to patent owners whose medical inventions are
non-voluntarily licensed on public interest grounds, to compensate them for the
use of their patents, their ingenuity, and the amount of funding expended
during the development stage of such inventions.[36] The current Patents and Designs Act
in Nigeria which precludes any payments to the patentee whose invention has
been compulsorily licensed on public interest grounds should be amended to
accommodate payment of reasonable compensation to patentees.[37]

Also, patentees could
consider the idea of voluntary licensing of their patent rights and entering
negotiations with relevant authorities once they discover that their inventions
are needed in periods of emergencies, as part of their civic duties to the
state. Instead of viewing compulsory licensing as a hindrance on their
exclusive rights they could consider it as a fulfilment of their collective
social responsibility to their community and use this medium to negotiate other
kinds of benefits from the government, like tax reductions and other
incentives, in exchange for access to their exclusive rights. In this regard,
the need to engage the services of an intellectual property lawyer,
well-grounded in the field of patent rights protection, would be relevant in
negotiating and drafting such agreements.

__________________________________________________________________

For further information on
this article and area of law, please contact Sandra Eke at:

234.                    
P. A. Ajibade & Co., Lagos by telephone
(+234.1.460.5091, 460.5092),

Mobile (+234.703.385.7874;
+234.811.249. 1286) or

Email (seke@spaajibade.com)

www.spaajibade.com

[1]      
Sandra Eke, Associate Intellectual Property & Technology Law, SPA Ajibade
& Co., Lagos, Nigeria.

[2]      
WHO, “WHO Director-General’s opening remarks at the media briefing on
COVID-19
” available at: https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19—18-march-2020 accessed
15 April 2020.

[3]      
Remdesivir, a Gilead product originally developed for other viral infections,
including Ebola and Marburg virus, is one of the drugs approved  by WHO
for clinical trials for Covid-19. However, Remdesivir is widely patented across
various countries in the world. See Medicines Law & Policy, “Covid-19 and
the comeback of compulsory licensing” available at: https://medicineslawandpolicy.org/2020/03/covid-19-and-the-come-back-of-compulsory-licensing/ accessed
14 April 2020.

[4]      
IAM, “Wuhan lab says it will seek patent protection of Gilead antiviral
available at: https://www.iam-media.com/coronavirus/wuhan-lab-says-it-will-seek-patent-protection-of-gilead-antiviral accessed
17 April 2020.

[5]      
Like the Trade Related Aspects of Intellectual Property Rights (TRIPS
Agreement) 1994, Annex 1C of the Marrakesh Agreement Establishing the World
Trade Organization; Paris Convention for the Protection of Industrial Property
1883, 21 U.S.T. 1583 and 24 U.S.T. 2140, T.I.A.S. No. 6923; and the Doha
Declaration on the TRIPS Agreement and Public Health 2001, WTO Doc. WT/MIN
(01)/DEC/1, 41 ILM 746.

[6]      
See WIPO, “WIPO Administered treaties; contracting parties” available
at: https://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=2 accessed
13 April 2020.

[7]      
The Center for Internet and Society, “Grounds for Compulsory Patent
Licensing in United States, Canada, China, and India
” available at: https://cis-india.org/a2k/blogs/grounds-for-compulsory-patent-licensing-in-us-canada-china-and-india#_ftn40 accessed
14 April 2020.

[8]      
For instance, Article 33 of the Trade Related Aspects of Intellectual Property
Rights (TRIPS Agreement) provides that “the term of protection available
shall not end before the expiration of a period of twenty years counted from
the filing date
.”

[9]      
S.7 (1) Patents and Designs Act (PDA), Cap P2, LFN 2004.

[10]    
The TRIPS Agreement also provides that the term “inventive step” may be
deemed to be synonymous with the term “non-obvious.” That is to say that
if it were obvious to a person of ordinary skill in the field concerned, it
would not progress to the stage qualifying for patent protection.

[11]    
Article 27(1) of the TRIPS Agreement.

[12]    
S.1 (1) PDA.

[13]    
See S.6 of PDA and Article 28 (1) of the TRIPS Agreement.

[14]    
Ibid.

[15]    
Article 28 (2) of the TRIPS Agreement.

[16]    
S.6 (3) of PDA.

[17]    
The Paris Convention is an intellectual property treaty covering industrial
property: patents, trademarks, industrial designs, utility models, service
marks, trade names, and geographical indicators. See, WIPO, “Summary of the
Paris Convention for the Protection of Industrial Property
(1883)” available at http://www.wipo.int/treaties/en/ip/paris/summary_paris.html accessed
15 April 2020.

[18]    
WHO, “The Doha Declaration on the TRIPS Agreement and Public Health 2001” available
at: http://www.who.int/medicines/areas/policy/doha_declaration/en/ accessed
15 April 2020.

[19]    
See Para 1, Pt. 1, Schedule 1, PDA.

[20]    
Para 6, Pt.1, Schedule 1, PDA.

[21]    
Para 1, Pt. 1, Schedule 1, PDA.

[22]    
See Para 15 and 20, Pt. 2, Schedule 1, PDA.

[23]    
Para 20(b) and (c), Pt. 2, Schedule 1, PDA.

[24]    
NLIPW Patents Law, Vol. 1, and No.9, available at: https://nlipw.com/10-examples-of-the-use-of-compulsory-licenses-in-africa-2/ accessed
14 April 2020.

[25]    
Ibid.

[26]    
Ibid.

[27]    
Ministry of Health Ghana, “Notification of Emergency and Issuance of
Government Use of License
” available at: http://www.cptech.org/ip/health/cl/Ghana.png accessed
15th April 2020.

[28]    
Ibid.

[29]    
ICTSD, “Taiwan issues Compulsory License for Tamiflu” available
at: https://www.ictsd.org/taiwan-issues-compulsory-license-for-tamiflu accessed
14 April 2020.

[30] BBC
News, “Coronavirus declared global health emergency by WHO” available
at: https://www.bbc.com/news/world-51318246 accessed
15 April 2020.

[31]    
The Emergency Department, Ministry of Health, “A Permit to the State to
Exploit an Invention Pursuant to Chapter Six, Article Three of the Patents Law
5727-1967
” available at: https://www.keionline.org/wp-content/uploads/A-Permit-to-the-State-to-Exploit-an-Invention-Pursuant-to-Chapter-Six-Article-Three-of-the-Patents-Law-5727-1967.pdf?_sm_au_=iVVvns5WHQ11sMDPvMFckK0232C0F accessed
15 April 2020.

[32]    
IAM, “The key covid-19 compulsory licensing developments so far
available at: https://www.iam-media.com/coronavirus/the-key-covid-19-compulsory-licensing-developments-so-far accessed
17 April 2020.

[33]    
Knowledge of Ecology International “Legislative Committee in Ecuador
approves resolution on compulsory licensing of patents relating to the
coronavirus
” available at: https://www.keionline.org/32429 accessed
17 April 2020.

[34]    
Ibid 20.

[35]    
Paragraph 5(b) of the Doha Declaration and Art. 31(h) of the TRIPS Agreement.

[36]    
A number of countries who issued compulsory licenses on HIV/AIDS drugs in the
past years, set royalty rates for the use of such licenses. Malaysia set a
royalty rate of 4% for such licenses; Mozambique established a 2% royalty;
Zambia set a 2.5% royalty; and Indonesia set a 0.5% royalty. See WHO,
“Remuneration guidelines for non-voluntary use of a patent on medical
technologies” available at: https://www.who.int/hiv/amds/WHOTCM2005.1_OMS.pdf accessed
17 April 2020.

[37]    
See S.17 (d) of the PDA.

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