An Australian perspective on the “Open COVID Pledge” and the availability of compulsory licences under the Australian Patents Act

An Australian perspective on the “Open COVID Pledge” and the availability of compulsory licences under the Australian Patents Act

An Australian perspective on the “Open COVID Pledge” and the availability of compulsory licences under the Australian Patents Act

As scientists around the world are racing to create a vaccine to combat COVID-19, a group of scientists, lawyers, entrepreneurs and individuals called the Open COVID Coalition have developed a means of accelerating the development of such a vaccine. Labelled the “Open COVID Pledge” (the Pledge) the Coalition has called on organisations to take the Pledge and effectively remove intellectual property rights as a potential obstacle to the rapid development of a COVID-19 vaccine.  

As many readers would realise, the development of a new product or process may involve the use of, or ultimately infringe upon, intellectual property rights owned by third parties.  Obtaining the right to use the subject matter of a third party’s rights may be time consuming and will typically involve payments – often by way of licence fees – even if the third party is prepared to grant a licence to those rights.  The Pledge is designed to avoid that obstacle.

The Open COVID Licence – a comment on its scope

Coupled with the Pledge is an Open COVID Licence under which an IP rights owner grants to:

“… every person and entity that wishes to accept it, a non-exclusive, royalty free, worldwide, fully paid up license (without the right to sub-license) to … exploit all patent, copyright and other intellectual and industrial property rights (other than trade marks and trade secrets) … for the sole purpose of ending the “COVID-19 Pandemic” … and minimising the impact of the disease …

The grant is effective from 1 December 2019, and lasts until 1 year after the WHO declares the Pandemic to have ended. 

The Pledge was only implemented in April 2020 and it is consequently too early to say whether any of the institutions currently involved in research into the development of a COVID-19 vaccine will take the Pledge. At the time of writing, a number of universities and their offshoots have supported the Pledge and Intel Corporation has signed the Pledge in respect of its global patent portfolio. 

However, one might wonder whether research and development organisations might balk at the prospect of granting a licence in such general terms as is required by the Pledge. Not only would there be questions of how “the sole purpose” is to be determined but also as to the breadth of a grant authorising any act aimed at “minimising the impact of the disease”.

The Open COVID Coalition acknowledges that organisations wishing to assist with achieving the objectives of the Pledge may be able to do so by offering modified forms of an Open COVID Licence.

Australian perspective – compulsory licensing available in Australia

One difference between Australian law and US law which might have some impact of the attractiveness of the Pledge to Australian companies and institutions, is the fact that the Patents Act 1990 (Cth) (the Australian Patents Act) has provisions in it for compulsory licensing. Compulsory licensing is almost unknown in the patent context in America. 

Under section 133 of the Australian Patents Act, a person can apply to the Federal Court for a compulsory licence where, among other things,

(a)  demand in Australia for the original invention is not being met on reasonable terms; and

(b)  authorisation to exploit the original invention is essential to meet that demand; and

(c)  the applicant has tried for a reasonable period, but without success, to obtain authority from the patentee to exploit the original invention on reasonable terms and conditions; and

(d)  the patentee has given no satisfactory reason for failing to exploit the patent to the extent necessary to meet the demand for the original invention in Australia; and

(e)  it is in the public interest to provide the applicant with authorisation to exploit the original invention, having regard to the following:

(i)  the benefits to the public from meeting the demand for the original invention;

(ii) the commercial costs and benefits to the patentee and the applicant from providing authorisation to exploit the original invention;

(iii) any other matters the court considers relevant, including matters relating to greater competition and any impact on innovation.

The provision has been seldom used and might, in ordinary circumstances, involve a drawn-out process involving negotiation with the patentee and an application to the Court.  However, in the circumstances of the COVID-19 pandemic, many more potential licensees may, at least in theory, be eligible for grants of compulsory patent licences. Whilst companies are making unprecedented offers of their resources and any approaches made to patentees for patent licences which relate to treating or preventing COVID-19 infections will no doubt be considered through that lens, it may be worth bearing in mind the potential operation of the compulsory licensing provisions of section 133 of the Australian Patents Act in the event reaching agreement on licensing terms stalls.

In addition to the compulsory licence provisions in section 133 of the Australian Patents Act:

  • section 136D of the Australian Patents Act provides for applications to the Federal Court for a compulsory licence to a patented pharmaceutical invention for the manufacture of a pharmaceutical product in Australia for export to certain countries to address, among other things, a public health problem in that country;
  • section 163 of the Australian Patents Act provides for compulsory government (Crown) use of patented inventions; and
  • section 163A of the Australian Patents Act provides for compulsory government (Crown) use of patented inventions in emergencies.

Provision is made for appropriate remuneration to be paid to the patentee under each of the compulsory licence regimes in the Australian Patents Act.[1]

Whilst the Pledge would avoid the need for applications and/or grants of compulsory licences to be made under the Australian Patents Act, it equally would dispense with the controls which are otherwise inherent in the conditions attaching to a grant of a compulsory licence. 

It will be interesting to follow the progress of the Pledge and to see whether or not it is useful in the rapid development of a vaccine to combat COVID-19.

[1] See section 133(5), section 136J and section 165 of the Australian Patents Act.

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