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Trump Urged to Limit Patent Rights on Ventilators, Treatments

April 9, 2020, 8:00 AM

Medical device makers and scientists around the world are waiving their intellectual property rights to encourage companies to restore depleted stockpiles of emergency equipment and develop new tests and treatments for the Covid-19 pandemic.

But it might not be enough.

Some researchers and lawmakers are calling on President Donald Trump to follow the lead of Germany and Israel in restricting patent rights for work on coronavirus treatments.

“When the lives of a significant population of a country are at stake, it is the inherent sovereign right of a government to override private property rights to protect the lives and health of its citizens,” said Fred Abbott, a Florida State University professor who’s advised the World Health Organization and United Nations on patents and drugs.

Trump has asked companies to start producing ventilators and respirators, but his administration has stopped short of taking steps that would give some level of protection from patent lawsuits.

“Everything has to be on the table,” said Representative Jan Schakowsky, an Illinois Democrat. “The goal here is not to protect a patent. The goal is to get the supplies to people who need them.”

She helped draft a letter seeking a promise from the administration that no exclusive licenses will be granted to government-funded research into the coronavirus.

One option, Abbott said, would be for the administration or Congress to make clear that anyone making products to fight coronavirus -- whether it’s drugs, medical equipment or protective gear -- is covered by a law that gives the federal government the right to issue a “compulsory license” for any patented invention.

Under that law patent owners wouldn’t be able to block use of their inventions in coronavirus equipment or medicines, though they would be entitled to compensation. Products can be covered by multiple patents, owned by multiple companies and a compulsory license would cover all of them, without the patent owner’s permission.

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Compulsory licensing is a power the U.S. government has rarely exercised outside of the defense industry, said Becky Kaufman, a King & Spalding lawyer specializing in drug-related intellectual property issues. In the 1960s, the government bought the antibiotic tetracycline from a manufacturer in Italy because the U.S.-made drug was more expensive. And in 2001, it threatened to break Bayer AG’s patent on the anthrax treatment Cipro; Bayer instead ramped up production and lowered costs.

Outside of government action, some in the private sector and academia have already taken extraordinary steps by putting their patent rights aside in the global fight against the novel strain of coronavirus that has left more than 87,000 people dead worldwide, with nearly 14,000 in the U.S.

Device manufacturer Medtronic Plc announced last week that it’s providing specifications online to encourage other companies to copy one of their popular ventilator designs, the Puritan Bennett™ 560, which was introduced in 2010 and is used in 35 countries. The company has also ramped up production of a newer ventilator model to try to meet demand.

Meanwhile, three major research groups -- the Innovative Genomics Institute, Howard Hughes Medical Institute and University of California -- recently offered a “no-fee, royalty-free license” to their work involving the diagnosis and treatment of Covid-19.

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“We’re trying to do everything we can to not put up any bureaucratic barriers,” said Jennifer Doudna, executive director of the genomics institute and a pioneer in the use of the gene-editing technology CRISPR whose team is developing an at-home test for the novel coronavirus. “People recognize we are in an emergency and we don’t have time to waste.”

Doudna, who’s been embroiled in a high-profit patent fight over who was first to develop CRISPR, said patents “can accelerate commercialization and convince companies to invest money where there may not be a payoff for a long period of time,” but this time is different. She said her team is providing information to scientists at universities around the country.

Violations of U.S. patents can result in damages as high as three times what the patent owner could make in profit, which can be more than what the manufacturer earns on the copycat. Many industries -- from smartphone makers to pharmaceuticals -- have spent years fighting over patents to billion-dollar products.

The president is facing mounting pressure from governors and congressional Democrats to use the Defense Production Act, a Korean War-era law, under which the government can order any company to start production, even if it’s not in its usual wheelhouse.

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While Trump has signed an executive order giving him the power to use the act, Democrats have criticized him for not invoking it broadly. He tweeted at GM Friday to start production of ventilators after the automaker had already begun to retool a factory to do so under a partnership with ventilator maker Ventec Life Sciences Inc.

The administration also told 3M Co. to prioritize orders from the Federal Emergency Management Agency for N95 respirators and stop exporting U.S.-made respirators to Canada and Latin America, which the company said might cause retaliation from other nations.

Covid-19 has changed some minds on limiting patent protections, with countries like Germany, the U.K. and Canada saying they will exercise their rights to ensure treatments are widely available. Abbott is backing Costa Rica’s President Carlos Alvarado call for a pool of rights for “technologies that are useful for the detection, prevention, control and treatment of the COVID-19 pandemic.”

“The most important thing for the government to do would be to say, ‘Look, solve this problem, we’ll do everything in our power to make sure that you’re not punished for working on Covid.” said Michael Eisen, a biologist and adjunct professor at the University of California-Berkeley.

Eisen helped create the Open Covid Pledge, which this week began calling on companies and universities to make their coronavirus-related intellectual property widely available until a year after the World Health Organization declares the end of the pandemic.

Congressional members on both sides of the political aisle are considering the issue, Schakowsky, the Illinois Democrat, said. Democrats are embracing ideas such as mandatory compulsory licensing and stripping patent rights from companies found guilty of price gouging, she said.

Republican Senator Ben Sasse of Nebraska has proposed protecting manufacturers from liability suits, and rewarding companies that hold off getting coronavirus-related patents by granting them extensions on the terms.

And it’s not just for drugs. The U.S. Public Interest Research Group organized a petition calling for makers of ventilators to make their designs publicly available so anyone could repair them without fear of being sued.

The threat of patent-infringement lawsuits for American citizens making gowns and masks from their homes and dropping them off at local hospitals is relatively low because they’re producing goods in small numbers, said Matt Rizzolo, a partner with Ropes & Gray. That may not help companies working at the scale to provide products for a nation of 330 million people.

The issue is later, when a company that owns patents related to drugs, ventilators or other medical equipment “might say, ‘Hey, wait a minute, millions of your products that were covered by my patents were used in responding to this pandemic and I think I should be compensated for that,” Rizzolo said.

Rizzolo said a U.S. law that protects manufacturers from product liability lawsuits in public health emergencies might be expanded to include patent actions as well.

Frontline medical workers also are facing shortages of generic medicines and protective equipment, which are in short supply as they’re typically made overseas, said Vincent Rajkumar, a professor of medicine at the Mayo Clinic in Rochester, Minnesota.

The government should assure companies stepping up to the plate that “We will protect you against patent lawsuits,” Rajkumar said. “If they came out and said that or even if they passed a law, it would be great.”

--With assistance from Hugo Miller.

To contact the reporters on this story:
Susan Decker in Washington at;
Malathi Nayak in San Francisco at

To contact the editors responsible for this story:
Jon Morgan at;
David Glovin at

Elizabeth Wasserman, Peter Blumberg

© 2020 Bloomberg L.P. All rights reserved. Used with permission.