Ensuring that innovation is rewarded is key to any developed IP legal system around the world. Many studies have shown that countries with strong IP systems allow innovation to flourish as the inventors are sufficiently rewarded for their time, effort and financial investment in the research.

The World Health Organisation has published a list of medical devices, testing equipment and personal protective equipment that are essential in the fight against the virus. Almost every country in the world is actively trying to stock their supply of the essential items.

Here in the UK, some of the biggest players in the engineering sector, including Rolls-Royce and BAE Systems, have rallied to assist in the rapid production of ventilators. Dyson went out alone to quickly design and start producing a new ventilator for which they have made the design documentation completely open-source. The government placed a huge order with the various companies involved in this monumental project and pledged that if the ventilators are not needed in the UK they will be provided to other countries.

What happens if these companies infringe IP rights in the UK or in other countries where their products are exported to?

There have been calls from the Labour party for the government to do more to stop profiteering during the pandemic, with MP Peter Kyle stating in the house of commons that “anybody exploiting coronavirus for profit should either stop it now, or the Government should step in”. But what does this mean? Should the government suspend all patents relating to ventilators to allow these to be made quickly, cheaply and without fear of legal action against companies trying to help?

Basically, yes…but with the appropriate compensation for doing so.

Crown Use in the United Kingdom

Section 55 of the UK Patents Act specifically allows the UK government and any person authorised in writing by a government department, to perform certain acts deemed necessary for ‘services of the crown’ which would normally infringe a patent, without the consent of the patent proprietor. This can also be applied retrospectively, so that the temporary manufacturers can get to work straight away if they are going to be authorised by the government. The proprietor, or exclusive licensee, of the patent is compensated by the government for losses as a result of third parties carrying out the would-be infringing acts.

In a decision of the High Court in January 2020, a judge, Justice Douglas Campbell QC, ruled on a case involving Vodafone where it was being argued that the patent infringement was to be excused as a Crown use. The details of the case are less important than the insight provided by the judge relating to how this very seldom used area of the law is to be applied.

Justice Douglas Campbell QC confirmed:

  • there has to be evidence in writing of the authorisation by a government department;
  • “services of the Crown” is not just the Crown directly, but also Crown services such as the military; and
  • it is sufficient for the government to authorise an act, even when a requirement to infringe a patent has not been established.

In summary, this rarely invoked Section of the Patents Act strikes the right balance between the legitimate interests of patent proprietors and the interests of the public during an emergency.

What about other countries?

Extension of Use in Germany

In late March this year, the German Federal Government amended the Infection Protection Act, giving the Federal Ministry of Health the power to make ‘use orders’ if there is a national emergency, which has in Germany, as in most European countries, already been declared.

Use orders are similar to Crown use in the United Kingdom, and are likely to be imposed on any or all of the essential products previously mentioned. The Infection Protection Act specifically mentions medicinal products, medical devices, laboratory diagnostics, PPE and disinfectants.

As in the UK, the patent proprietor is entitled to an appropriate amount of renumeration for the use without consent.

Government Patent Use in the United States

The federal government of the US, and any of its contractors acting on instruction of the federal government, has the right to use patented inventions without permission, while paying the patent proprietor reasonable compensation. This is typically set at around 10% of sales revenue, or less. The use of this provision was threatened in 2001 when an antibiotic was stockpiled in case of an anthrax attack and German Pharmaceutical giant Bayer initially refused to lower prices. In the end the provision did not have to be relied on as Bayer eventually agreed to make reductions in this instance.

In summary, we have been seeing swift action by companies to meet the worldwide demand for essential products to tackle the pandemic, and these efforts are probably not being hindered by IP laws, thanks to the foresight used when drafting the legal texts.

This article (and any information accessed through links in this article) is provided for information and educational purposes only. This article does not constitute professional legal advice. Professional legal advice should be obtained before performing any action based on the information provided in this article. All professional legal advice will be given in accordance with Creation IP Terms of Business. Please contact us for further information.

In this article, Creation IP Patents Associate Andy Caulfield discusses some of the IP challenges governments around the world face as they scramble to ramp up mass production of medical equipment and research for a vaccine in the battle against coronavirus.

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