The outbreak of COVID-19 has required governments across the world to implement an unprecedented range of measures to fight it, and to mitigate its effects. In the UK, this has included collaborative initiatives to accelerate the production of ventilators and to enable widespread testing for the virus. The production of medical devices and development of medicines is highly regulated, and for good reason. Patient safety is paramount. IP is also relevant in all this.
Managing IP rights during a health crisis
A balance must also be struck between the rights of IP owners and this overarching need to find solutions quickly. On March 16, the UK government called on the manufacturing industry to work together to step up production of critical medical equipment, including ventilators and diagnostic devices. In response, specific initiatives have included the VentilatorChallengeUK Consortium, a collaboration between companies operating within the aerospace, automotive and medical sectors to produce ventilators for the UK. It is expected that IP rights holders will license their rights to this consortium and to others who have responded to the government's challenge. This demands a real shift in attitudes towards infringement and enforcement of IP rights.
Whilst manufacturers race to produce critical medical equipment, they remain vulnerable to claims of IP rights infringement. This may be most prevalent in relation to patents, should a manufacturer’s product incorporate patent-protected components. This could also extend to claims of copyright and/or design right infringement should a manufacturer’s product include elements which enjoy such protection. The government has announced that it will indemnify participating companies against IP infringement liability.
Given the current difficult and demanding circumstances, IP right holders may choose not to enforce their rights against such manufacturers. Whilst no doubt motivated by straightforward good intentions, rights holders will be also be acutely aware of the potential reputational damage of being seen to be hindering the fight against the pandemic, and correspondingly aware of the PR benefits of proactively waiving their rights. However, rights holders may yet seek damages or royalties from such manufacturers when the pandemic is under control.
Crown use
In the event that an IP right holder does bring an infringement action against a manufacturer, either now or in the future, existing UK IP laws may provide a defence.
In respect of patents, the “Crown use” defence would allow the UK government to authorise manufacturers (either prospectively or retrospectively) to make use of any patents without the prior agreement of the rights holder, to the extent that the production of medical devices is or was for the “services of the Crown”. Such an authorisation would only need to relate to a particular act; for example, the reproduction of a ventilator design. It would not need to specify the patents being licensed. It is intended that the rights holder would be compensated at a later date by negotiation with the government.
Crown use is rarely used in patent cases, but it was successfully invoked earlier this year in IPCom v Vodafone, a case concerning IPCom’s patent for its network infrastructure equipment for 4G. Given the current climate and urgent need to tackle the pandemic, it will be interesting to see if, in cases which relate to COVID-19, it becomes a more regular feature of patent actions in the UK.
Compulsory licensing
This pandemic may also justify the use of compulsory licensing to facilitate access to certain medicines, vaccines, and medical devices for the diagnosis and prevention of the disease. For example, a compulsory licence may be granted to permit another party to legally manufacture a medication covered by a patent. While this has rarely been applied in the UK, the current public health crisis means that the likelihood of such licences being granted is no longer a remote possibility.
However, there are some conditions in the compulsory licensing regime which may limit its effectiveness in the current environment: the patent must have been granted for three years prior to the application for a compulsory licence; and the applicant must have already sought a licence from the patentee (on reasonable terms) and was refused. Whilst it may be possible to apply for a compulsory licence with retrospective effect, in practice, it seems more likely that the Crown use defence will be relied upon.
Enforcing copyright
The courts have previously stated that they could refuse to enforce a copyright where it would be contrary to the public interest and, in particular, injurious to public life, public health and safety (Hyde Park Residence Ltd v Yelland & Ors [2000] EWCA Civ 37). Therefore, where a rights holder is claiming copyright infringement against a manufacturer producing a much-needed medical equipment, it is unlikely that a court would grant the rights holder an injunction preventing the further production of infringing devices. However, a rights holder may still seek remedies for copyright infringement in the form of damages against the manufacturer.
Industry initiatives
Scientists and lawyers have also come together to make a pledge to reduce the risk of IP infringement proceedings when using IP-protected technology for the purpose of fighting COVID-19. The Open COVID Pledge has been created to address the concern that the usual process of securing licences to use patented technology will simply be too slow to enable the required products to be made in time.
Under the initiative, IP rights holders commit to license their rights (other than trade marks and trade secrets) royalty free and free from encumbrances, but the commitment is time-limited up to a period of one year from WHO’s announcement that the pandemic is over. Companies such as IBM and Microsoft are among the supporters of the pledge.
UK life sciences industry bodies (including ABHI and ABPI) have also made a joint commitment to fight COVID-19 by supporting the delivery of medicines and health technology, facilitating input and intelligence sharing amongst their members to support patient testing, and the development of medical devices and therapeutics. A number of pharmaceutical companies have already agreed to collaborate and/or contribute their products.
There is now an appetite for cooperation, but it will be interesting to see whether this persists in a post-COVID IP landscape.
Regulatory initiatives
The UK's Medicines and Healthcare products Regulatory Agency (MHRA) has taken steps through the National Institute for Biological Standards and Control (NIBSC) to co-ordinate efforts with the WHO and the Coalition for Epidemic Preparedness Innovations (CEPI) to develop vaccines for COVID-19. The MHRA has also indicated it is ready to provide guidance and accelerate applications for COVID-19 trials. Other national regulators are taking similar steps to accelerate the regulatory process and to provide guidance to stakeholders.
The EU's Medical Devices Regulation (MDR) and the In-Vitro Diagnostic Devices Regulation (IVDR) entered into force on May 25 2017, with a three and five year transition period from the old regimes respectively. The MDR was due fully to take effect from May 26 2020 and the IVDR from May 26 2022. Both the German and UK industry bodies have called for a delay to their implementation to enable manufacturers to focus energy and resources on the fight against COVID-19, and in recognition of the practical difficulties in implementing the MDR reforms during the pandemic. On April 3, the European Commission proposed a one-year delay of the MDR to the European Parliament and Council.
However, a delay to 2021 would be after the Brexit transition period expires (assuming that this period will not be extended, as the UK government maintains). This would mean that the MDR and IVDR would never be in force in the UK. The UK government will need to decide whether to adopt UK legislation identical to the MDR and IVDR or have divergent legislation in some form.
Impact on IP protection and litigation
The UK IPO extends deadlines
The UK Intellectual Property Office (IPO) has confirmed that its services are, to date, largely unaffected by the pandemic. However, hearings are affected and will be conducted by virtual methods (such as telephone or Skype) until at least June 1 2020. The IPO also declared that March 24 and all subsequent days until further notice are considered to be ‘interrupted days’. This means that deadlines for UK trade marks, designs, patents and supplementary protection certificates since March 24 will be extended until the UKIPO notifies the end of the ‘interrupted days’ period. The period will be reviewed again on May 7.
Courts utilising technology
The courts have quickly adapted to the pandemic, with statements from the Lord Chancellor and Lord Chief Justice both highlighting the critical role of the courts and the need to use technology where available.
Most civil hearings have been going ahead either through telephone or video-conference services. For example, a review of the Intellectual Property Enterprise Court (IPEC) daily cause list shows that most of its hearings are being conducted through Skype. There has recently been some guidance prepared for judges and practitioners on the protocol regarding remote hearings. This sets out the process and conduct of a remote hearing, preparation steps, the application of relevant civil procedure rules and other practical issues which should be considered.
In respect of document filing, the courts had been moving towards e-filing for a while prior to the pandemic, so this meant that there was minimal disruption once court staff were required to start working from home.
Tech may not suit complex trials
Whilst most civil hearings are going ahead, both within the courts and the IPO, a recent High Court decision has suggested that this is not readily the case for complex patent trials. On March 25 2020, the court heard an application to delay a complex patent licensing trial listed to be heard in April 2020 (Conversant v Huawei). Conversant proposed that instead of delaying the trial by at least 12 months, the court could deal with the matter largely on the papers. This would have involved the parties filing evidence in the usual way and putting written questions to the experts. Full written submissions would have replaced skeleton arguments, and the judge would have been provided with a detailed reading guide and a facility to ask questions via Skype.
Huawei argued that evidence had already been filed on the assumption that there would be a normal trial and that cross-examination would be an important feature in the case, as the approach to assessing royalties would depend on who had the most compelling evidence. The High Court held that the trial could not be conducted remotely.
Whilst praising Conversant's alternative proposition and acknowledging evidence to show that it would suffer prejudice if the trial was adjourned, the court decided that trials should be held and judgments given in public and parties should be able to call and cross-examine witnesses. Perhaps most importantly, major changes to procedural law should not be a matter for individual judges, but instead would require political accountability.
The Conversant v Huawei case was going to be a very time-intensive and complex trial (the trial is listed for 13 days). By comparison, the majority of patent trials currently listed to be heard dealing with the validity and infringement of one or two patents will be shorter and involve fewer witnesses (on average a patent trial will take 5 - 6 days).
A remote hearing on another patent case (Merck v Wyeth LLC) took place at the end of March. That case is going to trial in June 2020 and is listed for 7 days. At the hearing, the judge said a trial judge had been allocated for the trial and made clear that he did not anticipate there would be a need to adjourn the June trial date. The parties are therefore expected to prepare for a remote trial and adjournment of trials is being treated as a last resort.
The UK courts have perhaps been perceived as being slow to adopt modern technology, but in reality they are used to video conferencing when, for example, witnesses are located abroad and are unable to travel to the UK. The coming months may therefore see a significant shift in how trials are run in the UK, certainly in the short term but potentially in the longer term, in order to return to business as usual as quickly as possible in these unprecedented times.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, any other of its practitioners, its clients, or any of its or their respective affiliates. This article is for general information purposes only and is not intended to be and should not be taken as legal advice. Please contact the author(s) if you have any questions about this article.
Authors
Cerys Wyn Davies (Partner)
Sarah Taylor (Senior Practice Development Lawyer)
Aumair Qayum (Solicitor)
Andrew Cornforth (Solicitor)
