The Facilitating Innovation to Fight Coronavirus Act appears to be an attempt to bring any and all viable medical inventions to bear as quickly as possible in our fight to defeat COVID-19, which is absolutely to be commended. Despite attempts to mitigate the harm that outright eminent domain on patent rights (vigorously advocated by some) would certainly cause, the legislation needs more work.
No doubt the legislation is well-intentioned. It attempts to bring help fast. And, rather than outright expropriation of private property (i.e., inventions), the bill attempts to balance private intellectual property rights with urgent public health exigencies.
Our country’s shifted to high gear to handle the surge in COVID-19 cases, which fast approach a quarter million cases in the United States. Our health care infrastructure is stretched to the limits, while biomedical innovators race to create diagnostic tests, therapies (novel and existing antivirals) and vaccines.
However, it isn’t clear that the bill would achieve its intended results, plus it could have unintended consequences. We’ll discuss those potential unintended consequences in a moment. But first, a look at what the legislation would do.
The Facilitating Innovation to Fight Coronavirus Act has two substantive sections, each effective for the duration of the national pandemic emergency declaration. The first (section 2) provides broad immunity from liability lawsuits for unapproved use of a medical device, practicing medicine outside one’s specialty or coming off the sidelines from retirement, and testing or treating a COVID-19 patient outside a conventional clinical setting. The second (section 3) pairs suspension of certain medical products’ patent rights during the coronavirus emergency period with 10-year patent term extension.
Regarding liability protection, many people, especially in business, support liability reform. Reining in ambulance chasing attorneys certainly has appeal, especially when plaintiffs’ attorneys collect big-dollar damages awards while their clients often receive a pittance. In the context of a pandemic, there’s ample room for granting good Samaritan doctors and nurses and biomedical innovators liability protection for what might be tortious under normal circumstances. Otherwise, it’s like suing an army medic who couldn’t save the life of a battle-wounded soldier. We want to incentivize people to be doing the right thing, and they shouldn’t have to worry about a creative legal theory brought by an opportunistic personal injury attorney if an outcome didn’t turn out as well as we all might hope.
As for the patent provisions, the ramifications of the legislation are dicey. The measure would preempt patent rights now and later extend the patent term. This applies to “a patent issued for a new or existing pharmaceutical, medical device, or other process, machine, manufacture, or composition of matter, or any new and useful improvement thereof used or intended for use in the treatment of the Coronavirus Disease 2019 (COVID-19)” (section 3(c)).
Under section 3(a), “the term of the patent shall not begin until the date on which the [coronavirus] national emergency . . . terminates.” On the back end, “with respect to an eligible patent, the term of the patent shall extend for 10 years longer than it otherwise would under such title” (section 3(b)).
The legislative language isn’t exactly artful. Moreover, in order to incentivize the scale and vigor of invention in response to the national threat of the coronavirus that we’ve witnessed, most of those engaged in discovering and developing some “new or existing pharmaceutical, medical device, or other process, machine, manufacture, or composition of matter, or any new and useful improvement” are only able to do so because of the prospect of IP protections.
America’s biomedical innovators have assumed the risk of costly dead ends along the long, bumpy road to developing a successful drug, device or test that addresses COVID-19. They’ve shouldered this burden in good faith in a no-holds-barred race on all fronts — diagnostics, ventilators, personal protective equipment, therapeutics and vaccines. For many, the IP exclusivity over the terms of their patents will help offset R&D costs eaten now. Thus, a 10-year extension on coronavirus inventions’ patents looks attractive, but it presents real and present danger for at least several reasons.
But how exactly would it work, filing a patent that an examiner signs off on but the patent wouldn’t issue? Or the patent issues or has issued, but the clock on its term stops ticking? And what about the America Invents Act-caused glitch, where the patent term begins from date of filing? Does the term start at date of filing, stop once its efficacy or usefulness in connection with COVID-19 is ascertained, then the clock start again the day the coronavirus emergency is declared over? Trying to cover every applicable drug or device, the legislation’s breadth, which includes “existing” inventions, would inject much uncertainty, insecure rights and unreliability.
The legislation would deprive inventors of patentable COVID-19-related inventions from securing their property rights in their inventions. The essential patent right to exclude others from using, making or selling the patent owner’s inventions would no longer be exclusive. An inventor either invents a medical device, treatment or test that at some point is found efficacious and safe for COVID-19 patients and then loses exclusivity for a period, or an inventor intentionally invents a coronavirus test or treatment that would come on the market lacking patent protection.
Inventors would face the prospect of infringing conduct by others, at home and abroad, at a time in the invention’s life they normally would enjoy exclusivity and enforceable rights. For those who had exclusivity for a patented invention later found to remedy COVID-19, they would lose that exclusivity, leaving them without remedy against infringers who may price gouge or produce inferior or dangerous versions and harm the inventor’s reputation.
Does the legislation intend to promote what’s tantamount to patent infringement? It sure looks that way. If so, then how does one reestablish exclusivity after the market has developed while you were deprived of clear title? It’s hard to see how even 10 extra years of patent term makes such an inventor whole, and how can one really anticipate ever reclaiming a patent right once it has fallen into the public domain the way this legislation seems to envision. The effect seems pretty close to takings of private property — eminent domain on IP, but then oddly giving back from what was taken. This is antithetical to a private property regime, and similarly antithetical to the basic premise of the quid pro quo—namely that once something is available to the public it is in the public domain. The public outrage associated with giving rights back to corporations once they have been taken in eminent domain like fashion would almost certainly be too much.
Other questions and cloudy matters arise under the framework of this legislation. What about patent publication? Automatic 18-month publication would disclose one’s invention so others may copy and produce knockoffs of the COVID-19 invention, yet the rightful owner of this piece of newly created intellectual property can do nothing to enforce his or her property rights. And the patent publication would constitute disclosure. This makes the invention prior art against itself, putting the inventor in an untenable position. What happens? You get a piece of paper that looks and reads like a patent, but the disclosure makes it prior art and you never actually get exclusivity?
This well-intentioned but questionable approach does its worst damage, not at the individual inventor-invention level (which would be bad enough), but by the precedent it sets; this temporary takings-expropriation of property applies to certain medical patents, but what’s to stop politicians from imposing the same policies on other sets of patents at their whim? And once such a regime is in place the temptation to use it would be extraordinary in a world where drug prices are high and medical resources are scarce. Furthermore, it pours acid on what used to be a rock-solid fact: A U.S. patent secured an exclusive right to private property the patentee created for a reasonable, limited duration.
This long-term, deep damage further undoes the foundational elements that once made the American patent system the world’s gold standard. Good patent policy incentivizes inventors to find solutions, not merely for today’s, but for tomorrow’s problems. Andrew Berks recently noted the current concern of weakened patent policy leading to weakened economic incentives that spur innovation, observing, “The incentives are now misaligned, and with an uncontrolled pandemic causing a virtual stop to the world economy and overwhelming hospitals and supply chains, this is not an abstract problem. It’s a concrete issue that needs solutions fast.”
There are inventors and patent owners who have voluntarily given away or sold at cost their COVID-fighting inventions, patent rights or proprietary information. Many of the stories are heart-warming. These deserve recognition as extraordinary humanitarian acts in the throes of a pandemic. With all this corporate generosity, is there even any need for a bill like this? Academics are collaborating and foregoing recognition. Pharmaceutical companies are donating drugs and test kits. Manufacturers are making and donating ventilators. Anyone with capacity to manufacture personal protective equipment is doing just that. So, while this legislation is well intended, an additional 10 years of patent term will be viewed by many as patent owners being greedy at a time when they are not asking for anything and are already doing what we expect from every human being with a heart and half a brain.
There is no need for corporations to donate or give up their IP rights, or allow them to be taken away. IP rights secure investment and make everything the biotech, pharmaceutical and manufacturing companies are doing presently. Innovation and human ingenuity will solve this pandemic and no matter how bleak it becomes over the next several weeks we need to continue to social distance, we need to continue to support first responders and hospital workers, and we need to resist the temptation to make public policy at a time when the world seems to be ablaze.
The Facilitating Innovation to Fight Coronavirus Act appears to be an attempt to bring any and all viable medical inventions to bear, as quickly as possible in our fight to defeat COVID-19 which is absolutely to be commended. Despite attempts to mitigate the harm that outright eminent domain on patent rights (vigorously advocated by some) would certainly cause, the legislation needs more work.
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