COVID-19 licensing challenges

The speed of progress means that it is challenging for you to know:

• that you have freedom to operate (FTO) i.e. you will not infringe anyone else’s therapy or technology, and do not need a licence; and
• on what terms to license in necessary technologies and license out your own technology, when the focus is on just getting help to patients now.

Whilst you should still look at your FTO position, there are some exemptions and non-assert/licensing arrangements that might help you out in the short-term.

Infringement exemptions

At the pure research stage, you may not need a patent licence. Can you rely on the experimental use exemption? [2] In other words is what you are doing for experimental purposes relating to the subject-matter of the patented invention. This exemption does not extend to testing/clinical trials.[3]

An additional exemption was introduced for activities conducted only to obtain an abridged marketing authorisation application.[4] This is often known as the Bolar exemption. There is now also an exemption for anything done in or for the purposes of a medicinal product assessment.[5] This includes any testing, course of testing or other activity undertaken with a view to providing data for obtaining or varying an authorisation to sell or supply, or offer to sell or supply, a medicinal product anywhere.[6] Both of these exemptions only apply to medicinal products and not to medical devices.

Non-assert agreements/licences

So, what happens when you want to commercialise? You might be protected against infringement under an Open COVID Pledge. Various organisations, including Microsoft, Intel and Mitsubishi Electric, have made the following pledge:

… to make our intellectual property available free of charge for use in ending the COVID-19 pandemic and minimizing the impact of the disease.[7]

They will do this through a licence specifying the full terms. That licence will last until one year after the World Health Organization (WHO) declares the COVID-19 pandemic to have ended or 1 January 2023.

Over 80 Japanese organisations, including Canon, Kyoto University’s Center for Genomic Medicine, Nissan and Toyota, have their own Open COVID Declaration. They have agreed not to enforce their patents and copyrights during the time of this crisis, against any activities whose sole purpose is stopping the spread of COVID-19, including diagnosis, prevention, containment and treatment.[8]

The pledge companies are mainly in the electronics/IT sector. So, what if there is no pledge which can help you? There are many organisations committing to deal with licences quickly.

Several US universities, including Stanford, Harvard and MIT, have signed up to the COVID-19 Technology Access Framework.[9] Under this they commit to implementing COVID-19 patenting and licensing strategies to facilitate rapid global access. For most types of technologies, this includes the use of rapidly executable non-exclusive royalty-free licenses to IP they can license, for the purpose of making and distributing products to prevent, diagnose and treat COVID-19 infection during the pandemic and for a short period thereafter. In return for these royalty-free licences, licensees are asked to commit to distribute the resulting products as widely as possible and at a low cost that allows broad accessibility during the term of the licence.

AUTM (the US Association of University Technology Managers), of which some UK universities are members, has issued COVID-19 Licensing Guidelines to facilitate a rapid pandemic response. It says it is best accomplished by adopting time-limited, non-exclusive royalty-free licenses, in exchange for the licensees’ commitment to rapidly make and broadly distribute products and services to prevent, diagnose, treat and contain COVID-19 and protect healthcare workers during the pandemic. Those licences may subsequently convert to more typical commercial licences.

As the pandemic continues most organisations, however, even if they are not signed up to a pledge or guidelines, are keen to get licences agreed rapidly. The concepts contained in the pledges and the guidelines are useful in giving guidance as to the type of licences that might be on offer. They may also guide the type of licences which you might grant.

Many organisations are looking to license on a non-exclusive basis. That licence may be free-of-charge or at reduced rates for a limited period. For instance, that period could be until the WHO declares the COVID-19 pandemic has ended or for 12 months or for longer periods, such as under the Open COVID Pledge. After that licences would be on normal commercial terms. If those terms have not been agreed up-front, you should aim to be discussing them well ahead of the expiry of the free-of-charge or reduced rates.

Finding licensing partners is not always easy. UCL has a non-commercial site, Covid-19 Licensing, dedicated to distributing technologies related to the fight against COVID-19.[10] It is using it to license the UCL-Ventura breathing aid, developed by UCL and the Mercedes-AMG F1 team for use by the UK’s NHS. UCLB offers free hosting and licensing of IP submitted by university TTOs where the IP is fully developed and ready to be licensed. Those licences can be time-limited but must be free of charge.

Conclusion

The world is moving rapidly to beat COVID-19. It is good to know that, if you infringe someone else’s IP, in the short-term in relation to COVID-19 there are often ways to address it. We find that most organisations are happy to be accommodating on sensible terms. If you have technology to license yourself, the key is to move quickly to complete your deals. In our experience a well-crafted Term Sheet will help achieve this. Time will tell whether all licences entered into today can be extended beyond the pandemic period.