Compulsory Licensing and March-in Rights – Two Avenues to Expand and Accelerate Access to COVID-19 Vaccines

The record-speed development of effective COVID-19 vaccines is a momentous technological achievement and a testament to the power of coordinated collaborative research. With the development of these vaccines, the world now faces the follow-on tasks of ensuring access to the vaccines. That access, however, could be complicated by intellectual property rights, as those who hold intellectual property rights to the vaccines (1) might not have the capacity to produce the vaccines at scale or (2) might set relatively high prices for the vaccines.

As a general rule, intellectual property rights holders decide who has access to their technology. But access to that technology can still be achieved without the permission of the intellectual property rights holders in at least two ways: governmental march-in rights and compulsory licensing. Although both of these approaches are in tension with the exclusivity incentives provided by intellectual property rights, intellectual property rights have never before been tested by a global pandemic like COVID-19.

Compulsory Licensing. One option for ensuring accessibility to patented COVID-19 vaccine technology is compulsory licensing. In the United States, the government may manufacture, import or use patented technology without the patent holder’s permission in exchange for providing the patent holder with “reasonable and entire compensation.” Outside the United States, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement allows for the use and sale of patented products by third parties in order to serve a larger public interest, and a number of countries (for example, Canada and Israel) have passed their own legislation to prepare for compulsory licensing of COVID-19 treatments.

March-in Rights. Regarding patented technologies developed with public funding, the Bayh-Dole Act allows patents on inventions developed with federal funds to be exclusively licensed. These exclusive licenses, however, can be withdrawn under the government’s so-called march-in rights; these rights allow the government to grant additional licenses if the patented technology is not made available “on reasonable terms.” March-in rights, however, can be exercised only under certain circumstances, one of which is if the grant of additional licenses “is necessary to alleviate health or safety needs which are not reasonably satisfied by the [recipient of the federal funding].”

Although it is not absolutely certain that the unavailability of vaccines or high vaccine prices would qualify as such a situation, one could argue that if a holder of a federally funded patent (1) could not produce sufficient doses of an effective vaccine during a global pandemic, or (2) set a price that limits the vaccine’s availability, it would qualify as a “health or safety need[]” that was not being reasonably satisfied by the funding recipient. Thus, depending on the overall availability of the vaccines – and whether there is a sense that vaccine prices are set too high – there is a very real possibility that the United States government could elect to exercise its march-in rights to vaccine technology that was publicly funded.

It is true that the exercise of march-in rights is rare. But one can see the stage may be set for just such an exercise in connection with COVID-19 vaccines, especially because public funding was devoted to the development of COVID-19 vaccines, including federal funding of a vaccine that has received an emergency use authorization from the Food and Drug Administration.

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There are clear arguments to be made that involuntary access to intellectual property is contrary to the general exclusivity incentives provided by intellectual property protection. But modern intellectual property laws have never confronted a situation like the COVID-19 pandemic, and given the escalating need for rapid distribution of vaccines, the COVID-19 pandemic may provide a unique “perfect storm” of circumstances for governments to exercise involuntary licensing practices.