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THE COVID-19 PANDEMIC
COVID-19 swept throughout the globe. While many parts of daily life changed as the pandemic spread over the world, society as a whole has been and continues to be surprisingly resilient. The world around us has changed — in some ways for the better, but with unmistakable long-term consequences.
GLOBAL EFFORTS TO MAINTAIN INNOVATION AND BENEFIT TO PATENT HOLDERS
The COVID-19 pandemic is unquestionably one of these difficult situations. COVID-19 has altered how we live, work, conduct business, and govern ourselves. In an effort to limit the virus, countries have shut down, with several barring their borders and enforcing stay-at-home regulations. Businesses, educational institutions, and society as a whole have had to adapt and function. The economic and social consequences are predicted to be severe. The OECD has predicted that worldwide economic output will fall by at least 6% this year, and maybe substantially more if a second COVID-19 wave occurs. In the first quarter of this year, China’s GDP shrank by 6.8%. Under the United States, up to a third of jobs are in jeopardy.
Socially, a recent survey indicated the number of people in Europe who suffer from loneliness tripled as a result of lockdown and social distancing measures, and the U.N. warns of a forthcoming mental health crisis due to ongoing trauma exposure, isolation, fear and economic hardship.
Extraordinary circumstances necessitate extraordinary measures. Governments all over the world have revealed massive stimulus programmes aimed at bolstering economies. China announced an RMB 6.1 trillion stimulus package, while the US unveiled a USD $2 trillion financial rescue measure, with a second stimulus package in the works. Germany’s €130 billion financial stimulus package not only helps the country’s most vulnerable sectors, businesses, families, and people, but it also boosts government investments in environmentally friendly industries and technologies.
The USPTO has launched an online marketplace to bring together patent holders of COVID-19 related inventions with potential licensees, helping to accelerate the arrival of critical inventions to the market. In times of crisis, ‘buckling down and keeping the lights on’ (keeping the business running but at minimum investment) might appear to be the easier option for businesses. However, it is often in dire circumstances where ingenuity and innovation are unlocked, inspired, made necessary or even accelerated. Examples abound of innovation during the current crisis. Hand sanitizers are made in breweries and distilleries that have converted their production facilities. Manufacturers have shifted resources to build personal protection equipment for healthcare personnel, including an Italian engineering start-up that employed 3D printing to create ventilator valves. COVID-19 diagnostic test kits have been produced swiftly, with Bosch’s rapid COVID-19 test taking less than six weeks to develop. Not only is change unavoidable, but the global pandemic highlights the necessity of ingenuity in dealing with hardship and change.
IMPACT ON ORGANISATIONS
COVID-19 has caused nearly half of the organisations polled to admit that their innovation activity has altered as a result of it. The various levels of lockdown and quarantine measures have definitely expedited the march towards digitization, which was recognised by more than half (52%) of respondents as the most important shift to innovation activity. The world has changed and continues to change as a result of digitization. It enables us to operate in the manner and at the times that we like. It encourages cooperation. Even countries that value onsite collaboration and office presence, such as Japan, are speeding up digitization efforts and changing traditional business models.
Our Derwent Top 100 Global Innovators 2020 report, which was released earlier this year, highlighted a surge in new and inventive ideas. This is exacerbated by the fragmentation of the innovation ecosystem, with smaller businesses gaining a larger proportion of the market for inventions. Large and small businesses alike confront numerous problems. They’ll have to look beyond their usual collection of opponents. External and macro influences must be taken into account. Despite the uncertain environment, they must be prepared to make confident, smart, innovative, and business decisions. Patent data is a useful source of business intelligence that may help with not only innovation but also commercial decision-making. Almost 73% of innovation leaders said they glean insight from multiple data sources and use advanced analytics to distil that data.
COVID-19 VACCINES AND PATENTS
On May 8, Indian Prime Minister Narendra Modi made an impassioned plea to EU leaders to support India and South Africa’s proposal for a temporary waiver of intellectual property rights on COVID vaccines and medicines around the world. The EU, on the other hand, has resisted India and South Africa’s application for a patent waiver on coronavirus vaccines in order to stimulate global supply. During a pandemic, every country should be able to produce its own vaccines. The effort to temporarily waive intellectual property (IP) protection on coronavirus vaccinations is based on this idea.
More than 100 countries, as well as international institutions such as the World Health Organization and the United Nations AIDS charity, UNAIDS, have joined the campaign, which was started by India and South Africa. The purpose is to lower the hurdles to developing their own vaccines, especially for low-income countries. The pharmaceutical industry, as well as most high-income countries, are now opposed to the concept. Instead, these governments have committed to sharing more of their own vaccines with low-income countries and to increasing funding for charitable vaccine distribution programmes like COVAX. However, in a surprising and welcome move earlier this month, the United States, Russia and China came out in support of an IP waiver on vaccines.
In the United States, the Biden administration indicated that it will support the World Trade Organization’s Agreement on Trade-Related Intellectual Property Rights eliminating intellectual property protections for COVID-19 vaccines (TRIPS). Drug firms reacted angrily to the measure, as one might expect. Furthermore, many disinterested observers condemned support for a TRIPS waiver as meaningless symbolism, claiming that vaccine patents are not the fundamental impediment to the currently stalled drive to make vaccines available worldwide.
Waiving patent protections is certainly no panacea. What is needed most urgently is a massive drive of technology transfer, capacity expansion, and supply line coordination to bring vaccine supply in line with global demand. Dispensing with patents in no way obviates the need for governments to fund and oversee this effort.
Because the United States is the world’s largest market for pharmaceuticals, the significance of the US decision cannot be emphasised. For decades, US governments have collaborated with industry, universities, and other research-intensive nations to develop — and enforce — intellectual property standards, most recently through the World Trade Organization (WTO), where the IP waiver proposal is currently being debated. Even a few months ago, the concept of the US taking such a stance would have been inconceivable. Those countries still holding out, such as Japan, South Korea, the United Kingdom, and European Union member states, must now follow suit.
One of the most serious issues concerning IP waivers is that they give competitors a shortcut to expensive technologies. Companies also claim that IP relief will not speed up vaccine production because materials are in low supply and building capacity from the ground up can take many years.
The virus is currently ravaging India and South America, wreaking havoc on health-care systems and causing untold agony and death. Consider the fact that Australia, which has been successful in suppressing the virus, recently announced it was sticking to plans to keep its borders closed until mid-2022. Criticisms of the TRIPS waiver that focus only on the next few months are therefore short-sighted: this pandemic could well drag on long enough for elimination of patent restrictions to enable new vaccine producers to make a positive difference.
THE PATENT BARGAIN
When we look at the bigger picture, we can find a fundamental misalignment between intellectual property policy design and the policy requirements for effective pandemic response. Although patent law is an important component of a well-designed national innovation system when properly restricted, the way it encourages technological advancement is uniquely unsuited to the emergency conditions of a pandemic or other public health catastrophe. Obtaining a TRIPS waiver for COVID-19 vaccinations and therapies would thus set a positive precedent that governments should use alternative, more direct measures to encourage the development of innovative pharmaceuticals in times of crisis.
The essential deal made by patent law is this: stimulate the invention of useful new ideas in the long run while delaying their diffusion in the near run. The second half of the agreement, which imposes costs on society, stems from a patent holder’s temporary exclusive rights, or monopoly advantages. Without the approval of the patent holder, no one else can produce or sell the patented product for a term of 20 years under US patent law. This permits the patent holder to keep competitors out of the market or extract licencing payments before allowing them in, allowing it to charge customers above-market pricing.
Imposing these short-run expenses, on the other hand, can have a net long-term advantage by increasing the incentives to develop new products. In the absence of patent protection, the risk of easy imitation by subsequent market entrants can prevent would-be innovators from paying the upfront fixed expenditures of R&D. Inventors can proceed with greater confidence knowing that they will be able to return their investment if a period of commercial exclusivity is assured. In order for the net cost-benefit tradeoff to be favourable, patent law must strike the appropriate balance.
Exclusive rights should be valuable enough to encourage greater innovation, but not so easily granted or extensive in scope or term that this encouragement is outweighed by output restrictions on the patented product and discouragement of downstream innovations dependent on access to the patented technology.
NEED FOR PATENT WAIVER
The need of the hour is worldwide vaccination which to be successful desperately needs temporary relaxations in intellectual property rights and patent rights. Healthcare that is both accessible and inexpensive has never been more important. Every day, millions of people become infected with the coronavirus, and thousands of people die as a result. Medical supplies are in short supply all across the world. This problem may not be under control until the novel coronavirus is vaccinated against by a large portion of the population. In the event of a pandemic, every country should be able to produce its own vaccines. The effort to temporarily waive intellectual property (IP) protection on coronavirus vaccinations is based on this idea. More than 100 countries, as well as international institutions such as the World Health Organization and the United Nations AIDS charity, UNAIDS, have joined the campaign, which was started by India and South Africa. The idea is to lower the barriers for countries that desire to make their own vaccines, especially those in low-income countries. The pharmaceutical industry, as well as most high-income countries, are now opposed to the concept. Instead, these countries are pledging to share more of their own vaccines with low-income nations and to provide more funding to charitable vaccine-provision schemes such as COVAX.
However, earlier this month, the US, Russia, and China came out in favour of an IP waiver on vaccinations, which was a surprising and good development. Lifting patents and transferring technology is a good strategy to quickly ramp up vaccination production. Knowledge and technology transfer can help ensure that more vaccinations are created as soon as feasible for everyone all around the world.
To bring the pandemic to a close, vaccines for Covid-19 must be distributed quickly and fairly. However, forsaking the innovation environment to attain this goal would be a short-sighted approach. Despite this, financial resources or legal issues should not obstruct the expansion of vaccination supplies. Developed countries hoarding vaccines will not and cannot stop the virus from spreading because if even one person is at risk, no one is safe. It is past time for all countries to band together and share technological know-how, technicians, and facilities in order to scale up vaccine production, raw materials, or vaccine donations.