NIH’s Fight for Ownership of Moderna’s COVID-19 Patent Highlights Hazards of Business Collaborations

“While it’s possible to correct the listed inventors on a patent, this is only if there is no deceptive intent. Moderna may be backed into a corner, with litigation as the only way out.”

https://www.dvidshub.net/image/6473807/moderna-covid-19-vaccination-kadena-air-baseThe National Institutes of Health (NIH) is at legal odds with Moderna, claiming that Moderna neglected to add three NIH scientists to Moderna’s patent application on a principal COVID-19 vaccine. If a court ends up siding with NIH, it would co-own any issued patents on the technology, which could prove to be quite valuable; in 2021, Moderna’s vaccine sales were forecasted to be in the range of $15 billion and $18 billion. With an equal undivided interest in the patent, NIH could do whatever it wishes with it, such as licensing it to others and collecting royalties.

In late December 2021, Moderna allowed the patent application to go abandoned. The application had been allowed and only required payment of the issue fee to obtain the patent. Moderna did file a continuation application to preserve the company’s ability to get a patent. The New York Times reported that Moderna decided not to allow the application to issue because doing so “could interfere with further discussions aimed at an amicable resolution” with NIH. Alternatively, Moderna may rewrite the claims in the patent application to “write out” any involvement by NIH.

Previously, Moderna had offered NIH co-ownership as a way of resolving the dispute. If there were no additional provisions in the proposed agreement, this would give NIH the same ownership as if the three scientists were named as co-inventors. Apparently, NIH didn’t find these terms acceptable, since the dispute is continuing.

Why Did This Happen?

The problem arose because Moderna collaborated with NIH in the development of the vaccine. Collaboration is not a problem, but collaboration without an agreement can be. It’s common for businesses to collaborate, and the “Great Resignation” may further accelerate this trend. Each company benefits from having the other’s expertise. But if there is no agreement defining who has what rights, there can be unwanted surprises. According to the New York Times, an NIH spokeswoman said that none of the agency’s collaboration agreements with Moderna included “language controlling the licensing of inventions that might result from that work.” This suggests that no agreements controlled ownership of any “co-invented” inventions either.

Devastating Consequences

Leaving out an inventor can destroy a patent’s value, as one company, Ono Pharmaceutical, recently learned. Ono collaborated with Dana-Farber scientists Gordon Freeman, Ph.D., and Clive Wood, Ph.D., on a cancer treatment. Although eight patents were issued to Ono, none named Freeman or Wood. This led to a lawsuit in which the court determined that the scientists should have been named. The matter resolved with Dana-Farber being named a co-owner of all eight patents. Dana-Farber stated on its website that it “is actively seeking to license the technology,” and is now a direct competitor of Ono.

Another case back in 1989 involved surgical instrument manufacturer Ethicon, which filed a patent infringement suit against a competitor, United States Surgical. The inventor named on the patent, Dr. Inbae Yoon, had granted Ethicon an exclusive license to produce his invention. This patent was asserted against U.S. Surgical, but during the lawsuit, U.S. Surgical learned of a co-inventor, Young Jae Choi, who had collaborated with Dr. Yoon for 18 months. U.S. Surgical asked the court to add Choi as an inventor, to which the court agreed after determining Choi’s role in the invention. Because Choi had granted U.S. Surgical a retroactive license to the patent, the court dismissed Ethicon’s lawsuit.

The Process of Naming Inventors

Whenever more than one person works on an invention, the question comes up of who should be named on a patent application. It’s a complicated legal process. After every claim is reviewed, a determination is made as to who conceived the invention claimed in that claim. An easier (though still complicated) way to decide the inventor(s) of a particular claim is to determine who figured out what’s described in each claim, and who had it figured out enough that further experimentation or consultation with experts were not needed. Naturally, a conversation with your attorney is still essential, but this should provide some basic insight.

While it’s possible to correct the listed inventors on a patent, this is only if there is no deceptive intent. Moderna may be backed into a corner, with litigation as the only way out. It can’t just add the NIH inventors to appease NIH. If Moderna is not convinced that NIH scientists should be added, they can’t just add them. In my opinion, a court would likely find deceptive intent when the patent owner knows someone is not an inventor but adds them to resolve a dispute. Not naming them is also potentially problematic.

Either way, this situation puts a cloud over the patent that will adversely affect licensing and any future litigation. The only way to lift the cloud, or make it less menacing, is to have an independent district court rule on the issue.

Whenever a company works with non-employees, it needs an agreement that clearly defines who can do what and who owns the results, and also provides for the ownership of any resulting patents. If you find yourself in this situation, consider a conversation with an attorney to make sure you protect your interests.

 

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One comment so far.

  • [Avatar for Anon]
    Anon
    March 31, 2022 09:43 am

    The notion of “deceptive intent” was wholesale removed in the AIA.

    Your article may have been accurate prior to that event.