Covid-19: Assessing risk - patent infringements in public healthcare emergencies

As South Africa enters the lockdown phase of our response to the coronavirus, a lot of the technology that medical professionals are using might hold the key to helping solve the pandemic.

But this technology is patented and presents a number of issues in the face of this unprecedent public health emergency.​​

Patented technology holds the key to many solutions that assist medical professionals daily in the diagnosis and treatment of patients.  In this context, we look at several issues relating to enforcement of patents in the face of public health emergencies, such as the current Covid-19 pandemic.

Even though there is yet no known vaccine or cure for Covid-19, a huge amount of research is being done, and there will hopefully be new vaccines and medicines produced soon.  Although these are likely to be patented in due course, it is optimistic to expect that these new products will be ready to go to market now.  We can only hope that the crisis will be over before the patent process has run its course and patents are granted.

Nevertheless, there are various existing patented products which are required in managing the current pandemic.  There are already reports of patents being asserted against suppliers of medical products to medical practitioners and hospitals struggling to cope with the pandemic.  A threat of patent infringement proceedings was reportedly made against people in Italy who were 3D printing copies of patented respirator valves, after a local hospital had run out and was unable to get replacements from the authorised supplier.

The objective of the patent system is to encourage innovation for the greater good of society, by rewarding innovators.  (Indeed, if ever there was a demonstration of the value of innovation, compare our current predicament with an imagined world in which we had a vaccine or cure!)  However, the mechanism by which innovation is incentivised is by giving the patentee the right to exclude unauthorised persons from using the invention concerned.  By their very nature, patents restrict access to the protected invention. In healthcare, there is an inevitable tension between patent rights on one hand, and broader access to newer medical technologies on the other.  Whilst this tension exists at the best of times, the issue obviously becomes particularly acute in public health emergencies, such as the current Covid-19 pandemic.

In South Africa, the patent system is regulated in terms the Patents Act with section 45(1) setting out the rights in a patent as giving the patentee the right to exclude others from "making, using, exercising, disposing or offering to dispose of, or importing" the invention claimed in the patent.

The Patents Act includes provisions which may be invoked in a crisis such as the present one, including:

  • Section 4 provides that a patent shall have the same effect against the state as it has against any other person "provided that a Minister of State may use an invention for public purposes on such conditions as may be agreed upon with the patentee, or in default of agreement on such conditions as are determined by the commissioner on application by or on behalf of such Minister and after hearing the patentee"; and
  • Section 56 provides for the grant of compulsory licences, but only in the case of "abuse" of patent rights and sets out circumstances in which patent rights will be regarded as abused.  A compulsory licence can only be issued by the Court of the Commissioner of Patents, on application by an interested person.  Without going into details, the compulsory licensing provisions of the Patents Act are restrictive, and difficult to implement in practice.

Both above provisions require applications to court, which would inevitably cause considerable difficulty in a time of emergency; and section 4 requiring the court application to be brought by the relevant Minister.

Further, section 15C of the Medicines and Related Substances Control Act, provides that the Minister of Health may prescribe conditions for the supply of more affordable medicines, which include permitting parallel importation of a patented medicine, notwithstanding contravention of the Patents Act. This provision may not be particularly helpful where unavailability arises from excessive global demand.
Given the constraints on accessing relaxations on patent protection, it is likely that officials and health professionals will take the approach of "asking for forgiveness, rather than permission", and it is worth briefly exploring the consequences of this approach.

Where a patentee alleges that his patent has been infringed, the remedies are available to him/her under section 65(3) of the Patents Act are: an interdict; damages; or in lieu of damages, a reasonable royalty. In this regard, urgent enforcement of a patent would be by way an interim interdict, which would require a court to consider: the patentee’s prospects of success in an action for final relief on the patent; whether the patentee would be adequately compensated by a damages award; the balance of convenience/prejudice to the respective parties; and whether the patentee has acted expeditiously in seeking interim relief.

It is beyond the scope of this article to discuss how these factors will be weighed up by a court, save to mention that:

  • the public interest may be considered in the assessment of the balance of convenience (as found in Cipla Medpro (Pty) Ltd v Aventis Pharma SA, Aventis Pharma SA and Others v Cipla Life Sciences (Pty) Ltd and Others 2013 (4) SA 579 (SCA));
  • where a patented product is practically unavailable, whether because of shortages or prohibitive pricing, a court is unlikely to come to the patentee's aid in urgent proceedings; and
  • currently, the government lockdown will continue until 16 April 2020, and we expect that courts will not consider any patent infringement proceedings to be so urgent that they must be heard in this period.

The question must then be asked as to the infringer's risk of liability in financial terms.  A damages claim will require the patentee to prove damages.  Where the patented product is practically unavailable (again, whether because of shortages or prohibitive pricing), it will be difficult for a patentee to prove that it has suffered any harm as a result of the infringement.  In practical terms therefore, an emergency infringer's liability would be limited to an amount calculated on the basis of a reasonable royalty which would have been payable by a licensee or sub-licensee in respect of the patent concerned (section 65(6) of the Patents Act).

Naturally, there are many subtleties in assessing the issues raised above, and we would urge anyone contemplating these issues to take expert advice before taking any action.