With the COVID-19 outbreak, institutions and corporations are scrambling to develop and produce COVID-19 tests and cures, while at the same time hospitals are facing a lack of personal protective equipment (PPE) and lifesaving medical devices such as ventilators.
Major companies are using their large-scale production capabilities to mass-produce products for hospitals. For example, some companies are teaming up to manufacture large numbers of transparent face shields, while others are switching production at their factories to produce ventilators. Even without access to factory-scale resources, individuals and small companies are contributing to help remedy the lack of PPE and medical devices through the use of additive manufacturing, also known as three-dimensional printing (3DP).
3DP is a process by which a three-dimensional object is made from the ground up one layer at a time without the need for expensive and specialized factory equipment. Because a 3D printer can print anything for which the user has a design file – known as a computer-aided design (CAD) file – and the raw materials, a 3D printer can make nearly anything, including medical devices. Because of its flexibility and relative inexpensiveness, 3DP can allow smaller companies and individuals to help alleviate the shortage of medical equipment.
But with this accelerated ability to manufacture parts comes an accelerated risk of intellectual property infringement. Those with the ability to pivot quickly to manufacture needed products may find themselves pressed to do so without first being able to perform the intellectual property clearance analysis that would be done in less challenging times.
As an example, Isinnova, an engineering startup in Italy, used its 3DP capabilities to produce 100 respiratory valves in only 24 hours for a hospital that had run out of the valves due to the influx of COVID-19 patients. Soon thereafter, it was reported that a company with patent(s) covering the valves threatened to sue Isinnova for patent infringement. Though the patent owner now denies that it ever threatened suit, Isinnova’s experience is instructive: those that intend to assist with the COVID-19 crisis may face unanticipated legal ramifications for their well-intentioned actions.
In the United States, direct patent infringement is a strict liability tort, meaning that knowledge of the patent being infringed is immaterial. Claims for induced and contributory infringement, on the other hand, require knowledge of the patent. Importantly, a corporation (or institution) cannot rely on any statutory safe harbor or exception to patent infringement, even in the event of medical necessity or other exigent circumstances.
One exception to this is that the United States government, in some circumstances, can take actions that would otherwise constitute patent infringement. Under the Bayh-Dole Act, the government retains “march-in rights” to patents developed with federal funding. This allows the government to issue licenses for such patents in order to, among other things, “alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees[.]” 35 U.S.C. § 203(a)(2). Another option for the government is 28 U.S.C. § 1498(a), which provides that the government can authorize an entity to use or manufacture a patented invention without the patent owner’s permission while also limiting the patent owner to suing the government in the United States Court of Federal Claims for said infringement. Though the patent owner is entitled to recovery of its “reasonable and entire compensation for such use and manufacture[,]” such compensation is not available “if the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” Thus, without government intervention, an actor that practices a patented technology in connection with responding to COVID-19 may risk patent infringement in doing so.
How Have Patent Owners Responded to COVID-19?
To date, the United States government has not invoked either the Bayh-Dole Act or 28 U.S.C. § 1498(a) in response to COVID-19. Some companies, however, have taken the initiative in offering their intellectual property for free to combat the coronavirus.
More specifically, several leading companies and labs founded the Open COVID Pledge, which “calls on organizations around the world to make their patents and copyrights freely available in the fight against the COVID-19 pandemic.” About Us, Open COVID Pledge, https://opencovidpledge.org/about/. The Open COVID Pledge accepts three categories of licenses: (1) a set of three “Open COVID Licenses (OCL) that may be adopted by any organization or individual taking the Pledge”; (2) licenses that provide a set of minimum use permissions that are determined to be compatible with the OCL; and (3) licenses not in the first two groups but that are consistent with the Open COVID Pledge. Other companies and organizations, including the New Jersey Institute of Technology (NJIT), have joined in the Pledge.
Still other companies have opted to provide their own licensing framework to promote the response to COVID-19. As one example, Medtronic “has publicly posted design specifications for the Puritan BennettTM 560 (PB560) ventilator to allow innovators, inventors, start-ups, and academic institutions to leverage their own expertise and resources to evaluate options for rapid ventilator manufacturing.” In order to access the files, a user must first agree to Medtronic’s permissive license. See https://www.medtronic.com/content/dam/medtronic-com/global/Corporate/covid19/documents/permissive-license-open-ventilator.pdf.
What Are the Patent Infringement Considerations for Those Responding to COVID-19?
3DP allows companies and individuals to contribute to the fight against COVID-19. But in so helping, some companies and individuals can expose themselves to legal liability, including for patent infringement. If your operations are planning to contribute to the fight, below are some items to consider before “pressing print” on your technology.
Is there a license available for the product? If you download design files from a company like Medtronic in order to make Medtronic’s own ventilator, avoiding liability for infringement is as easy as agreeing to Medtronic’s permissive license. But if you download a file from another source, it may not be as simple to determine what company’s product you have the file for or whether that company has made its products available to combat COVID-19. Although it might be unpopular for a company to sue for patent infringement when the accused product is being used to respond to COVID-19, it is nonetheless advisable to perform due diligence and attempt to identify whether any company claims patent rights to a product before you print it.
Exercise caution if relying on the Open COVID Licenses. Every form Open COVID License is a “non-exclusive, royalty-free, worldwide, and fully paid-up” license granted “to every person and entity that wishes to accept it[,]” provided that you make, have made, use, sell or import the relevant invention “solely for the purpose of diagnosing, preventing, containing, and treating COVID-19.” Though this initiative is admirable in purpose, there are issues to be considered before relying on the Open COVID Licenses to use 3DP for medical devices and equipment.
First, confirm that the pledger at issue is using one of the form licenses or one of its own that is consistent with the Pledge. Make sure to note any differences between the forms, and be sure you know the obligations to which you are agreeing.
Second, be aware of the license’s time limitation. The form Open COVID Licenses do not extend beyond January 1, 2023, and Pledgors are free to modify that timeframe. Any activities covered by the license but which extend or could extend past the time limitation could expose you to liability. For example, Open COVID pledgor NJIT has made its novel swab test technology free of licensing fees and even posted its design from NJIT’s own Additive Manufacturing Lab to the National Institute of Health’s 3D Print Exchange website. Open COVID Public Statement, New Jersey Institute of Technology. That license, however, does not extend beyond January 1, 2023, so any manufacture of the swabs after that date is possibly infringing. Further, if you distribute the swab design files and they remain available to the public after the time limitation of the license and a third party downloads the file and prints the novel swab, you could be sued as an indirect infringer. On the other hand, certain Pledgors, such as IBM, have extended the term of their licenses (or “Pledge of Patent Non-Assertion”) through the expiration of any subject patent claims. See Mark Ringes, IBM Offering Free Access to Patent Portfolio to Combat COVID-19, IBM Research Blog.
Third, make sure you have no plans to sue the Pledgor for infringement in the future. All form Open COVID Licenses contain a “Defensive Suspension” provision that automatically suspends the license and allows the Pledgor to assert the licensed intellectual property against the licensee “if the licensee or any entity affiliated with the licensee threatens or initiates a suit or legal proceeding alleging the infringement of any patent or other intellectual property right against the Pledgor or any entity affiliated with the Pledgor.” The provision is quite broad, covering any entity you are affiliated with and any entity affiliated with the Pledgor. If you have IP that you may want to assert in the future, make sure you think about what you are undertaking by creating products covered by an Open COVID License, and the implications for that if that license is suspended.
Recipients of products made by licensees likely face less potential liability. The Open COVID Licenses allow a licensee to “make, have made, use, sell, and import any patented invention, solely for the purpose of diagnosing, preventing, containing, and treating COVID-19.” But once an authorized transfer of that patented invention takes place, it is unclear whether the recipient is obligated to use that product for COVID-19 treatment.
As an example, suppose a person with a 3D printer creates a product covered by an Open COVID License and the person then sells the printed product to a hospital for the treatment of patients with COVID-19. If the hospital uses the product for purposes other than treating COVID-19 patients, it is unclear whether the hospital would face liability for that use, as the Open COVID License requirement that the product be used for COVID-19 purposes could be viewed as an unenforceable post-sale restriction. See, e.g., Impression Prods., Inc. v. Lexmark Int’l, Inc., 137 S. Ct. 1523, 1535 (2017) (“Once a patentee decides to sell – whether on its own or through a licensee – that sale exhausts its patent rights, regardless of any post-sale restrictions the patentee purports to impose, either directly or through a license.”). The same result is possible even if the hospital receives the printed product for free. See LifeScan Scotland, Ltd. v. Shasta Techs., LLC, 734 F.3d 1361, 1377 (Fed. Cir. 2013) (holding “that patent exhaustion principles apply equally to all authorized transfers of title in property, regardless of whether the particular transfer at issue constituted a gift or a sale”).
The COVID-19 epidemic has resulted in a lack of PPE and lifesaving medical devices. Companies and individuals with 3DP capabilities can help bridge the gap but should take care to consider potential legal ramifications, such as patent infringement, before taking action, even actions in exigent circumstances.