IP Updates In the Battle Against COVID-19: Merck and Moderna

Two recent COVID-19 headlines have reignited the fury around IP rights. The first piece of news, which I think we can all agree is positive and beneficial to the global community, is Merck’s announcement that it will grant a royalty free license for its oral antiviral treatment for COVID-19. The license will be granted to a United Nations backed non-profit, Medicines Patent Pool, allowing companies in over a 100 developing countries to manufacture and distribute the lifesaving antiviral (Merck NYTimes article or Merck Reuters article). The second headline, clearly less altruistic, is Moderna’s alleged failure to acknowledge the contribution of National Institutes of Health (NIH) scientists in what appears to be a critical patent related to the Moderna MRNA vaccine (Moderna NYTimes article or Moderna Reuters article).
 
A blog post I wrote back in April touched on a few of these issues (Patents v. Trade Secrets in the COVID 19 Vaccine Battle). At the time I suggested that it was unlikely for either Pfizer or Moderna to license (royalty free or otherwise) their MRNA technology to developing countries because of trade secret, processing equipment, and raw material issues. As we have seen in the ensuing months, the technology and resources needed to replicate the MRNA vaccines have not been widely distributed for at least the reasons I discussed, and likely many more. The Merck news reinforces my thesis, because unlike the highly complex process technology and raw material dependent MRNA vaccines, the Merck pill is a relatively simple molecule combined with a common capsule formulation. The obstacles to producing the Merck pill are essentially legal, because generic manufacturers around the world have the experience and technology to prepare the molecule and incorporate it into a capsule for oral delivery. Additionally, if manufacturing problems arise Merck has stated it will offer “know how” to assist in preparing the oral treatment.
 
Merck without a doubt has made a significant contribution to global welfare in offering a royalty free license to developing nations for this lifesaving treatment. However, it’s a vastly different gift than what was requested from Pfizer and Moderna. First, the structure of the active molecule, while patented, is published and easily accessible. Second, the capsule technology that acts as the carrier or dosage form for oral delivery is likely old and commonly used in the pharmaceutical industry (I have not seen the carrier formulation, but capsule technology is generally not complicated). These factors mean that developing nations could choose to copy the Merck product and distribute it with or without Merck’s consent. These actions would almost certainly infringe patent rights (assuming relevant patents are filed in the hypothetical infringing countries), but that would be a legal issue, not a manufacturing one. In contrast, the technical know-how, processing equipment and raw materials needed to copy the Pfizer and Moderna MRNA vaccines do not exist in developing countries.
 
It is indisputable that Merck has provided a very generous license to use its product. However, for Pfizer or Moderna to enable developing nations to replicate their vaccines would require revealing hundreds of unpublished trade secrets, producing and transferring millions of dollars of equipment, and preparing and gifting millions of dollars of rare raw materials. As discussed in my prior post, the difference is akin to allowing someone to walk across your lawn versus allowing them to go into your house and take something out of your personal safe, or the difference between reduced profits versus seizing property indefinitely.
 
The second news story is the conflict between Moderna and the NIH, which highlights an interesting issue that appears when private companies engage in joint research with the U.S. government. Under certain circumstances if a private company receives government funding and/or uses government facilities, IP or resources, the U.S. can be granted a right to use resulting technology. Here Moderna accepted U.S. funding over a four-year period to develop its MRNA vaccines (funding which predates and continued into the COVID-19 pandemic). At the vaccine announcement the government touted the vaccine as the “NIH-Moderna Covid-19 vaccine.”  What is not clear is to what extent the specific unpublished patent application at issue claims technology developed using the government funding and/or contributions from NIH scientists. While the relevant information to settle this issue is unpublished and confidential, the biggest argument appears to be inventorship, which could grant the U.S. government greater rights than just sponsorship. Barring a settlement between Moderna and NIH this issue will likely play out in the court system to determine if the U.S. Government has rights in the patent. If NIH and/or its scientists are found to be contributors to the claimed subject matter it will be more than just bragging rights. The U.S. Government would potentially have the right to use and/or license the patented technology without authorization from Moderna. Depending on how critical the patent is to the Moderna vaccine these rights could potentially be worth billions of dollars.
 
Cooperation between nations and multinational corporations has greatly contributed to the advances in fighting COVID-19 producing vaccines, therapies and now oral antivirals. Unfortunately, IP rights that have bolstered the knowledge base and research that have contributed to these record setting advancements have often been in conflict with extending vaccines and therapies globally. However, simply “waiving patent rights”, even temporarily during a global pandemic, will not always produce the goal of expanding access to lifesaving medications. Continued cooperation and good faith between all parties will be necessary to further the reduction of death and suffering across the globe in this and future disasters.
 
If you have any questions about IP, patents or trademarks, please contact me at [email protected] or visit my website at www.chiaraiplaw.com
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