Impact Of COVID-19 on Intellectual Property & Vice Versa

Before I put forward my thoughts on the topic, I would like to steer clear of the science behind COVID-19, and impact on other factors such as social, economical, and mental health due to the COVID-19.

Almost all business sectors on the planet are somehow affected by COVID-19 pandemic since most of the countries are under lockdown to prevent the spread of COVID-19. The different forms of lockdown have led to temporary shut down of manufacturing facilities.

Although some of the business sectors such as software and financial services are able to facilitate their workforce to manage their work from home, but there is a lot of uncertainty as to when the world will be able to get back to normalcy.

The COVID-19 pandemic is way too different from 2008-2009’s financial crisis that the world had faced. Before anyone points it out, let me clarify that I was still pursuing my graduation at the time of financial crisis.

Personally, the financial crisis  didn’t affect me, but I observed some of the difficulties people in India had faced. Nevertheless, the financial crisis did not force businesses to completely shut operations the way it has now due to the COVID-19 pandemic.

To give an example, let me draw upon a personal experience. Sometime in the year 2011, I had attended an interview and during the process, the interviewer had asked me a question- What if the world faces another recession? What will happen to Intellectual Property (IP) industry and its impact on you for choosing to be part of it? I still remember the answer (roughly though) which I gave: I said: -“the IP industry will never go out of business as long as companies thrive to invent in order to stay ahead of competition”.

The interviewer was surprised with the answer, but the remaining interview proceeded as usual. The reason to bring up this particular old conversation is; although I was confident about the IP industry not facing any adverse affects at the time, – I can’t say the same with certainty now given the current situation the businesses are facing due to the COVID-19 pandemic.

Although IP is an integral part of any business to succeed and to stay ahead of the competition in their respective fields, the pandemic is forcing the businesses to take a long pause on their IP activities such as filing patents and trademarks. I say this with caution as many businesses across the world have already announced publicly that they would freeze hiring, cut down their workforce, rollback some of the benefits offered to their workforce, reduce wages, cut down on advertising and so on.

With so much at stake, the businesses will be forced to pause or delay spending on Research & Development (R&D) and IP until they see some demand for their products or services in the market. Even the patent and trademark offices such as the European Patent Office (EPO), India Patent Office, and the United Kingdom Patent Office have automatically extended deadlines, while others have provided some remedial action for rights on the existing Intellectual Property lost due to effects of the coronavirus.

Many Economists, Scientists, Epidemiologists and experts in other fields are repeatedly pointing out that the world can return to normalcy only after a vaccine is invented. The vaccine might be months away from now but until then, the businesses can run only with uncertainty even after lifting the lockdown.

Now, I would like to come to the second part of the topic, impact of IP on COVID-19. Pharmaceutical and medical technology companies around the world are trying to do all they can to help find a vaccine or manufacture essential medical equipment to alleviate the impact of the COVID-19 pandemic. Most companies are manufacturing and allowing other companies to manufacture the essential medical equipment heavily protected by patents without the threat of patent infringement (as of today). However, this may not hold true if any company invents a vaccine to protect people from COVID-19. Like always, there are good reasons for patent protection: who would want to invest their time and money in inventing a vaccine if everyone could freely copy it without profit?

Even after inventing the vaccine, governments may utilise existing provisions in patent laws or pass emergency legislation that enable competent authorities to allow themselves or third parties to make use of patented inventions for public interest. In other words, the governments can authorise pharmaceutical or generic companies to mass-produce the vaccine without properly compensating the company that invented the vaccine. This will create a major incentive issue or knockout the fundamental concept behind patent protection.

If the governments suspend patent rights at the time of crisis like COVID-19, then the companies will not have an incentive to develop the required vaccine during this kind of an emergency or pandemic in the future. The companies working to develop COVID-19 vaccine must feel confident that if they succeed, they will be able to profit from those inventions at some point.

Nonetheless, there are solutions to address some, if not all, of the above issues. Take for instance; the governments could simply pay the company that invents the vaccine and place it in public domain. Another solution is patent pooling, which I blogged about in the year 2013, titled: Patent Pooling: A possible solution to Indian drug patent licensing. In that post, I had discussed that pharmaceutical companies with the help from governments could pledge their patents to be licensed to the generic companies or other parties at reasonable cost with reasonable terms of use that will benefit people at large. In both cases, the governments must take proactive steps to involve public and private sectors to invent, procure and distribute the vaccine. If the governments act late, then the companies that eventually invent the vaccine will prefer to sell it for higher profits leaving poorer countries to struggle to access the vaccine.

With that, I hope someone will invent the vaccine soon enough to get us all back to normalcy with certainty and will be able to profit like never before for their contribution to the world.

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