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Pandemics and Emergency Access to Patented Technology in Canada

March 31, 2020

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Canada’s COVID-19 Emergency Response Act came into force on March 25, 2020. Perhaps overlooked amongst emergency relief, health care and financial effects is Part 12 of the Act which makes changes to the Patent Act.

Why should the general public care about this? I’m glad you asked.

These changes create a new power for the Commissioner of Patents to “…on the application of the Minister of Health, authorize the Government of Canada and any person specified in the application to make, construct, use and sell a patented invention to the extent necessary to respond to the public health emergency…” and that any such use or sale of that invention that is in relation to the public health emergency is not an infringement of the patent.  In short, Canadian patents can now effectively be subject to a compulsory license if the technology they cover could help in the fight against COVID-19.

Obvious examples of such technology could include personal protective equipment, medical diagnostic and testing equipment, respirators and life support systems and the like. The Government can now make, or more probably “have made” (i.e. subcontract), these patented technologies without requiring consent from the patent owner. I would argue this could also apply to patented pharmaceutical compounds that have some demonstrated efficacy in treating symptoms related to COVID-19, including possibly anti-viral and/or vaccine formulations (subject to the existing Health Canada regulations, etc.).

This emergency authorization will not last forever. The special access under this Act will cease on the earlier of the day the technology is no longer needed to combat the health emergency, or after 1 year.

Practically, what does this mean…

For Patent Owners

Check your Tech: Review your patent portfolio and consider if any of the technologies it covers could be useful in responding to the present COVID-19 pandemic. If so, you may choose to voluntarily help make them available under commercially reasonable terms (that would be good corporate citizenship), and you should also be prepared for such technologies to be selected and made available to others by the Government.

There will be compensation. The Act states that a patent owner shall be paid “… amount that the Commissioner considers to be adequate remuneration in the circumstances, taking into account the economic value of the authorization and the extent to which they make, construct, use and sell the patented invention…”. Be ready to respond to a government request by having some, reasonable, idea of the market and/or economic value of your technology and be ready to propose and defend this reasonable position. It is unrealistic to expect the government to understand the nuances of your commercial markets, so help them out and increase your chances of a fair payment.  However, this is not the time for price-gouging so ensure that your position is fair and socially responsible.

Monitor the Use of your Technology: Use of your patented technology in this manner is restricted to uses related to the health emergency. It is not carte blanche, and improper uses of your technology beyond the authorized reasons can be limited by order of the Federal Court.

For Government/ Businesses

Ask for Access, and be ready to act by Sept. 30, 2020: These changes require the request for authorization to come from the Minister of Health. It is unlikely that the Minister will be aware of every patented technology.  If you see something, say something. That is, if you are aware of useful technology that is patented you need to inform your patent counsel or MP and request that it be brought to the Minister. This may help increase the changes of that technology being made available.

Have a Plan: Back-up your request for access to technology with clear evidence that you have the will, capacity and competency to actually manufacture the technology/product in question. This may include providing evidence of appropriate manufacturing capability/ facilities, the presence of key personnel and a clear access to the raw materials or inventory needed to meet your plans. Do this homework in advance increase the credibility of your request.

Be careful: These changes only apply within Canada. It is possible that the technology in question is covered by other patents in other countries.  A license to make or sell in Canada does not apply to such foreign patents. Therefore a product that is manufactured lawfully in Canada under this scheme may still be considered infringing if exported to the United States, etc.  This may apply to hardware, but could also apply to products manufactured using a patented process. Make sure to check the status of foreign patent laws very closely before engaging in international sales to avoid incurring unintended liability.

The full text of the COVID-19 Emergency Response Act can be found here.