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Inventing in the Age of Covid-19: Government’s Role and Responsibilities During Crisis

Author: William Yarbrough

Contributing Editor: Blaire Farine

The Current Crisis

The current public health crisis brought about by Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2), and the resultant Coronavirus (COVID-19) outbreak, has highlighted the acute need to effectively detect and isolate the causative virus as well as medically address present infections and ameliorate the long-term consequences of the ongoing public health threat faced domestically and globally. The present need to rapidly develop, evaluate and implement necessary testing, medications and vaccinations underscores the strengths and weaknesses of our current federal regulatory processes, specifically the adequacy of our patenting system in the fight against this virus.

Testing

Primarily, it is clear that an effective clinical testing system is crucial in terms of detecting and analyzing rates for both active infection and past exposure in order to understand the epidemiological parameters of COVID-19 (e.g. patient risk factors for contraction, virus virulence, transmission rates, etc..). Active infection testing is achieved through molecular testing (i.e. Reverse Transcription Polymerase Chain Reaction) to combine reverse transcription of RNA into DNA to amplify specific DNA targets and magnify the detectable viral RNA of SARS-CoV-2 directly during active infection. Immunological surveying for previous exposure is accomplished via serological testing, detecting in vivo antibodies (immunoglobulin M (IgM) and immunoglobulin G (IgG), created through an adaptive immune response to a viral challenge resulting in B-cell activation subsequent to the initial infection phase. These testing procedures provide a two-pronged testing mechanism that allows clinicians to detect not only active, acute infection but also prior exposure in order to determine a complete disease profile, including progression, spread and possible reinfection.

To inform broader prevention and treatment through detection, containment, and mitigation strategies for the SARS-CoV-2 virus, active infection may be monitored, coarsely, through symptom recognition or precisely through molecular testing, each vital to curbing the contagion’s spread. Yet, it is serological testing that affords a more insightful and detailed evaluation and assessment regarding more accurate rates of infection identification and monitoring. Serological testing also yields a better understanding of the overall infection and fatality rates (i.e. morbidity and mortality rates) that in turn help advise, determine and guide a more effective and informed public health strategy.

Equally, identifying the specific parameters of the Corona virus is essential to gaining crucial information such as routes and rates of transmission, method of infection, individual susceptibilities, predispositions, and other epidemiological factors specific to COVID-19 that will relate directly into treatment and prevention. Gaining this information will ultimately lead to scientifically derived population-based health management incorporating testing, pharmaceutical treatments, immunizations and public health practices designed to both treat and protect ours and the world’s populations.

And while the pharmaceutical treatment and immunization phases of virus mitigation may be in their nascent stages, triggering just the second Emergency Use Authorization (the first being the “swine flu” outbreak of 2009-2010), the testing phase is well within both our contemplation and understanding and it is this phase that may provide the best area for modification and improvement for inventors in the short term.

But, it is the inventive pharmaceuticals, newly developed vaccines and novel clinical tests, in total, that will provide us a keen insight into both the efficiencies and shortcomings of both FDA regulation and the US patenting system. In fact, current conditions, as dire as they have proven, carry with them the promise of an intimate observation into how our country seeks to respond through these agencies to solve the problem that no one requested, but that everyone is forced to face. To this end, it is true “invention” that will be an absolute requirement for the short, intermediate, and long term in developing effective strategies in curtailing the destructive forces of COVID-19.

Yet, supporting invention and innovation is a monumental global task that cannot rely too heavily on any one segment of society, public or private. It must include a collaborative effort requiring cooperation from individuals, corporations, and government alike. Manifestly, though, it is the federal government who will emerge as a primary stakeholder in the viability of widespread success against this pandemic. In light of the scope and range of this public health emergency, the federal government, as wards and stewards of its constituents and gatekeepers to innovation, will have to shoulder the lion’s share of providing a full commitment to bring its considerable resources to bear to foster and incentivize the rush to create the inventiveness necessitated.

So, having sufficiently determined the onus of virus detection, if not the prevention and treatment of COVID-19, it is incumbent upon scientists and inventors worldwide to marshal all efforts to discover and advance new and inventive ways to combat the present virus and permutations to come. These efforts are crucial in the immediate term to aid and assist in novel inventions, methods and approaches that will inform and strengthen the treatments, apparatuses and strategies that we need now and in the future for short and long term detection and prevention policies. To this end, it is important that inventors realize their rights, obligations, responsibilities, and the consequent rights held by the government in this sensitive time, especially in terms of newly developed inventions.

Comprehensive Overview of Patent Rights

Under Title 35, the Patent Act, enacted July 19, 1952, ch. 950, §1, 66 Stat. 792, any person who “invents or discovers any new and useful process, machine, manufacture, or composition of matter may apply for a patent on the invention with the U.S. Patent and Trademark Office (PTO)”. If a patent applicant submits a written patent application with an invention meeting certain criteria (i.e. novelty, usefulness, best mode, nonobviousness, and patentable subject matter among them), as defined by a United States Patent and Trademark Office (USPTO), an examiner will review the patent application to determine if all patentability requirements are met. If all applicable legal requirements are met to merit the granting of a patent, the USPTO will allow the patent to proceed to issuance and will grant the patent.

Patents themselves are available in almost every field of technology and science, including biotechnology, chemistry, computer science, electrical engineering, mechanical engineering, and manufacturing. Patents are awarded to a new use of a known process, machine, manufacture, composition of matter, or material - with certain discrete limitations where the subject matter is considered unpatentable (e.g. abstract ideas, laws of nature and natural phenomena).

In the field of pharmaceuticals, if a particular chemical substance is useful in treating a certain condition or disease, the inventor may seek a patent claiming the chemical structure itself. Yet, the chemical makeup of a substance is but one of a number of patent types relating to pharmaceuticals and other medical treatments. Particular drug formulations such as extended release products and emulsions are methods of using the pharmaceutical to treat a particular disease. Other areas of patentability within pharmaceuticals are novel treatment methods incorporating a new or previously known substance, methods and technologies to administer a pharmaceutical (such as a uniquely utilized injection technique or enhanced distribution system), methods and technologies to manufacture a pharmaceutical or innovative production systems, as well as methods and technologies for testing for and diagnosing disease. These methods and techniques for testing and diagnosing disease can include unique testing assays and improved procedures for detection or even improvements tied decreased results timing. The previously mentioned ideas are all patentable if they meet the Patent Act’s requirements.

Medical testing diagnostics, deemed to incorporate “laws of nature” and therefore defined as including unpatentable material, does not follow the same path as pharmaceuticals and treatments. Testing, of late, has fallen into the category of a “natural phenomena,” wherein the procedures and methods designed for determining the causative agents and markers behind diseases are deemed unprotectable. See the Supreme Court’s March 2012 ruling in Mayo Collaborative Services v. Prometheus Laboratories, Inc., where claims were invalidated covering processes that aid doctors who use thiopurine drugs to treat autoimmune diseases patents more effectively by being able to determine whether a given dosage level is within therapeutic ranges (i.e. too high or too low)). 566 U.S. 66 (2012). Too, genetic testing has suffered the same fate wherein the genetic sequence of the C. immunda fungus to degrade toluene was also found unpatentable as a “law of nature”. (See specifically Association for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013)). Therefore, as has been affirmed by recent cases Athena Diagnostics v. Mayo Collaborative Services, and Cleveland Clinic Found. v. True Health Diagnostics LLC, “Cleveland Clinic II”), it is an ongoing battle to provide that diagnostic testing is patent subject eligible and that the Court’s decision in Mayo is ultimately serves to twart the purpose US patent system - to foster creative forces within our country. 2017-2508, (Fed. Cir. Feb. 6, 2019) (“Athena”). 2018-1218 (Fed. Cir. April 1, 2019; non-precedential). Manifestly, the decision in Mayo has far-reaching ramifications of (1) disincentivizing development of clinical testing, (2) stymieing medical innovation and (3) throttling medical and immunological advancements dependent upon accurate diagnostic testing, (4) and leaving investment unrecoverable through unprotected and unprotectable intellectual property which moves opposite of the direction we so desperately need at this crucial juncture. 566 U.S. 66 (2012).

The Patent Act itself is designed to foster new innovation and encourage improvements on existing technologies by offering the patent holder an exclusive right to make, use, sell, and import (collectively, “practice”) the patented invention in the United States to the exclusion of others. This right to “exclude” others from practicing the invention, unless by a licensed use from the patent holder, allows the patent owner to reap the benefit of his intellectual property by utilizing a government sanctioned temporary monopoly on a technology. This monopoly derives benefit from an inventor’s ingenuity and permits him or her to recoup the costs incurred through research and development thereby dually rewarding the inventor while allowing the public to benefit from the newly-developed technology for a certain period of time, typically 14-20 years.

Unfortunately, with the uneven distribution of patent rights between treatment and prevention modalities and diagnostic testing advances, the incentives and protections afforded one group of scientists and clinicians is dramatically contrasted by another group of equally arduously involved innovators. Yet, even for those inventors having subject matter eligible to receive patent protection, this right is not absolute.

Inventions Made with Government Assistance

In General, the patent rights of individual inventors are outlined and enumerated above. However, there are certain situations where third parties also benefit from the patenting process and exercise received rights by way of their contribution to an invention.

Two examples of third-party participants include (1) employers and (2) US government. In the case of employers, when an inventor creates a new and novel process, machine, manufacture, or composition of matter in the course of their respective employment, the employer has certain protectable rights and a stake in the invention.

In the case of an employer, the company may either seek to patent the invention on the behalf of the employee or seek to have the employee assign the rights to the company where the company has obligated the employee contractually to transfer rights in the invention to the company. This obligation can exist contractually when the inventor or inventors discovered patentable machines, processes, and techniques with the use of the company’s facilities and equipment. Indeed, the inventor always remains the “inventor” throughout the life of the patent as an individual, not a company or corporation. (See Stanford University v. Roche Molecular Systems Inc, 563 U.S. 776 (2011)). But the inventor may be contractually obliged to assign the rights to the company and thus transfer “ownership” to his or her employer, thus making the employer the true owner of the patent rights.

Similarly, when an inventor relies upon funding from a government agency to develop or implement an invention, the patent rights may vest with the U.S. government or even a federal contractor who is equally obligated to “share” its rights. This may be as a total assignment of the rights in the invention where the inventor is a government employee acting in the official capacity. This official capacity is defined under the Stevenson-Wydler Technology Innovation Act and the Federal Technology Transfer Act of 1986, designed to encourage the commercialization of government-employed inventors and “government” created inventions by licensing the federally owned patent rights to private parties by a process called “technology transfer.” Here the government may grant certain non-exclusive patent rights to private parties, while also retaining the right to practice the invention itself. This is also seen in the case of a federal contractor, through its association with a government agency or through receipt of federal funding, where a federal contractor retains the right to the invention while providing the government a government-use license or compulsory license that may be further granted to additional third parties. (See the Bayh-Dole Act of 1980).

Alternatively, the inventor may not be an employee of the federal government but receives federal funding via a Cooperative Research and Development Agreement (CRADA). Under this CRADA, both parties agree to provide services, facilities, equipment, intellectual property (IP), or other resources to the inventive process. The federal government does not provide direct federal funding to the non-federal party inventor; however, it retains the authority to license its federally owned intellectual property to a private party under the CRADA. This allows the government to retain and use rights in the developed IP through government-use, wherein the government may utilize the rights itself and/or exercise compulsory licensing. Simply, this compulsory licensing occurs when the government allows another person to practice the invention without the consent of the patent holder. (See Bayh-Dole above).

Other rights too may be subject to waivers and exceptions to ceded rights for government and non-government employees that benefit from federal resources. These parties may have available to them different agreements defined as “other transactions” which diverge from than those arrangements identified above. These agreements contain requirements which may differ in their content, rights and responsibilities varying from agency to agency. Certain agencies have the discretion to enter into these “other transactions,” which may create exemptions from various statutory regulations that control customary retention and transfer of rights. These exemptions provide greater flexibility in what are deemed “exceptional circumstances”. Under said “other transactions,” it is the agency that determines how and when a funding agreement is reached, and certain “exceptional circumstances” may warrant that a “restriction or elimination of the right to retain title to any subject invention will better promote the policy and objectives.” (Title 35 U.S.C., Part II, Ch. 18 § 202 (a) (ii), Disposition of rights). Agreement terms here can be viewed as malleable, situation dependent, and subject to overriding public policy concerns which include, largely, the government’s right to act in the best interest of the American people. (See generally the Stevenson-Wydler Technology Innovation Act and the Federal Technology Transfer Act of 1986, the Bayh-Dole Act of 1980 and 28 U.S.C. § 1498 – described within).

Government Rights

An inventor’s rights were explicitly created by the US Constitution, in Article I, Section 8, granted and to be implemented by Congress to “[T]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" commonly referred to as the “Patent and Copyright Clause” or “Intellectual Property Clause,”. In fact, this is the only power in Section 8 that specifically states its purpose. But, this right is not unlimited.

The rights of the government in its self-derived intellectual property is, by definition, considered unconditional. Yet, the Bayh-Dole Act allows a government extension, as a government contractor, to hold a stake in patent rights and be a patent holder, as described above. Even so, the contractor may harbor these rights subject to certain relinquishments where the US government is entitled to exercise its “March-In Rights” to grant compulsory licenses to a third party under several specific sets of circumstances including:

(1) the action is necessary because the contractor or assignee of a patent has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use;

(2) action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees;

(3) action is necessary to meet requirements for public use specified by Federal Regulations and such requirements are not reasonably satisfied by the contractor, assignee, or licensees; or

(4) action is necessary because the agreement [to prefer U.S. manufacturing of the invention by any of the contractor’s exclusive licensees] has not been obtained or waived or because a licensee of the exclusive right to use or sell any subject invention in the United States is in breach of its agreement [to prefer U.S. manufacturing].

The US government has yet to exercise its authority to “march in” under the Bayh-Dole Act because it would require an extremely high burden as well as necessitate possible payment to the patent owner under “terms that are reasonable under the circumstances.” Yet, it is within the realm of possibility in these extraordinary times that the health and safety needs of the public could outweigh the rights of a “contractor, assignee, or their licensees”, as well as the inventors themselves, and cause a compulsory license to be granted to an outside third-party in times of a national crisis or an emergency order.

Additionally, the government has an even broader authority to use or manufacture any patented invention “without license” and without the owner’s permission under 28 U.S.C. § 1498 via eminent domain, or the exercise of the Fifth Amendment’s “Takings Clause.” The patent owner in this case would have the ability to seek “reasonable and entire compensation for such use and manufacture” including “reasonable fees for expert witnesses and attorneys, in pursuing the action” except where “such costs and fees if the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust “(See 28 U.S.C. § 1498 (a)). But, this compensation is not automatic and receiving funds would be a lengthy process. Further, it is not unrealistic to imagine this “taking” could logically include not just non-governmental contractors, but also private parties up to and including those private entities involved in developing COVID-19 medical countermeasures.

What is more, Congress has the authority to decide to surgically implement legislation wherein the rights of inventors may be supplanted by a “greater” public good. Succinctly, although the US constitution grants Congress the right or, more pointedly, allows the Congress to create a patent system, it does not expressly require such implementation and leaves the designation of the metes and bounds of the patenting system up to the discretion of the Congress. Conceivably, Congress has the power and right to exclude COVID-19 related testing and treatment inventions from patentability entirely under the Takings Clause of the Fifth Amendment (arguably with “just compensation”), prospectively in addition to retrospectively, creating disincentives and ramifications untold. Conversely, Congress has the reciprocal authority to expressly include all COVID-19 related patents and to specifically and with intentionality protect all inventions that are COVID-19 related, as further defined by Congress.

Therefore, it is paramount that the rights of inventors in the medical space be fostered and protected, most especially in the field of medical testing, through recognition by the judicial system and through the legislature. This recognition is that the rights of all medical advancements related to COVID-19 prevention, treatment, and immunization must be advanced and guarded to ensure that the scientific community receives the explicit assurances that all medical inventions related to this disease will receive their due protections. And while it is understood that promoting innovation is at the very crux of the patent statutes and the Patent Clause, there exists a fine line to establish an equitable boundary between the rights of individual inventors and the interest of the public at large. Here, not only are inventor’s rights in jeopardy, there are additional questions as to patentability and patent matter eligibility, inventor’s rights and the very real threat of government exploitation of patents through sequestration that stand to detrimentally and adversely inventors and the public alike. These uncertainties will only serve to heighten reservations and slow research of diagnostic techniques, vaccines, and treatments directly and indirectly. Ambiguity as to what constitutes patentable subject matter, particularly surrounding diagnostic testing, as well as other “unpatentable” subject matter, ( i.e. computer software and certain business method patents), will create an effect that will only serve to create untoward ripples in exploration and invention in all stages of medical discovery and serve to hinder innovation across the entirely of the COVID-19 response – all to the absolute disservice to all of our health and safety.

In these unprecedented times, it is crucial for all involved to keep in mind a balance between public health and safety, the interests and rights of inventors, and role of government as acting intermediary and the consequences of the regulatory powers exercised by the government. It is incumbent for us now thus to adapt not for the challenge but with the challenge and in anticipation of future challenges.

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