Pharmaceutical Patents: Moderna Vs. Pfizer and BioNTech

Manan Daga

2 Sep 2022 8:30 AM GMT

  • Pharmaceutical Patents: Moderna Vs. Pfizer and BioNTech

    In a recent turn of events, Moderna Inc. sued the US-based pharmaceutical company Pfizer Inc. and the German-based pharmaceutical company BioNTech SE for infringing its patent while developing the first COVID-19 vaccine. Moderna filed two suits in the US District Court based in Massachusetts and the Regional Court of Dusseldorf based in Germany, alleging that the other two companies...

    In a recent turn of events, Moderna Inc. sued the US-based pharmaceutical company Pfizer Inc. and the German-based pharmaceutical company BioNTech SE for infringing its patent while developing the first COVID-19 vaccine. Moderna filed two suits in the US District Court based in Massachusetts and the Regional Court of Dusseldorf based in Germany, alleging that the other two companies copied its patented messenger ā RNA ("mRNA") technology and, thus, are seeking monetary damages. During the beginning of the COVID-19 pandemic, Moderna announced that while the pandemic continues, its patent would not be enforced in order to facilitate vaccine development, particularly in low and middle-income countries. However, it claimed that big companies like Pfizer and BioNTech were expected to respect its intellectual property right. Hence, Moderna sued both companies for two broad alleged infringements.

    Firstly, it alleged that the mRNA technology was copied by the other two companies when the technology was patented by Moderna between 2010 and 2016. Further, it was alleged that these two companies copied Moderna's technology despite them having four different vaccine options, including those that did not use Moderna's technology and yet they chose the one which used Moderna's mRNA technology. Secondly, it is alleged that a full-length spike protein's coding was copied, which was developed by Moderna's scientists while creating a COVID-19 vaccine for a coronavirus causing Middle East Respiratory Syndrome. Therefore, Moderna prayed for damages for a period beginning after March 8, 2022, but excluded the sales made by Pfizer falling under 28 U.S.C. § 1498 or the sales made to the 92 low and middle-income countries.

    Pharmaceutical patents have been a highly-debated issue in the modern era. The Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS Agreement") and the Doha Declaration on TRIPS and Public Health ("Doha Declaration") are the foundational documents on which pharmaceutical patents have been built. TRIPS Agreement introduced the minimum standard of protection framework and granted patent protection to pharmaceutical products, including vaccines. Doha Declaration brought in certain flexibilities to the absolute grant of patent protection to the pharmaceuticals, like compulsory licensing wherein patented medicines could be manufactured without the consent of the corporates for anti-competitive or non-commercial use. Hence, these documents dictate the understanding of patent law in the pharmaceutical industry along with local legislation.

    While it is essential to understand the legal position of patents in the pharmaceutical industry, it is equally critical to analyse the logic behind holding pharmaceuticals to be the patentable subject matter. In India, before the TRIPS regime, medicines were a patentable subject matter only for process patents but not for product patents. It helped India grow in the community of generic medicine because the product (final medicine) was not protected by patents, but only the process was protected. Hence, an alternative process could be used by reverse engineering the final product, which would cut the cost of making the drug, thus, resulting in a cheaper version of the patented drug.

    However, after the adoption TRIPS regime post-2005, Article 27 of the TRIPS Agreement required the grant of both product and process patents to medicines. It was done to ensure a uniform global patent community which is conducive to technological advancement, and the said advancement would happen when product and process patents are granted because it creates more incentive for pharmaceutical companies. A product patent ensures a stronger monopoly on the pharmaceutical product because the final product is protected and not just the process. It further results in additional profits for the companies and leads to more investment in research and development. This additional research and development ultimately benefit the public because it would be used for advancing the pharmaceutical industry, wherein the end consumers would be the general public. Therefore, this is the uniform logic behind holding pharmaceutical products as a patentable subject matter. This logic applies to all jurisdictions, including India and the USA.

    Moderna has filed the suits in two jurisdictions, one of which is the USA because Moderna is based in the USA. However, apart from this reason, there can be more potential reasons for choosing this jurisdiction. The USA has one of the least conservative patent systems across the globe, and it is highlighted by multiple sources. In the landmark case of Diamond v. Chakrabarty, 447 U.S. 303 (1980), the US Supreme Court famously noted that "anything under the sun that is made by man" can obtain a patent. Further, the Intellectual Property Clause in the U.S. Constitution (Article1, Section 8, Clause 8) seeks to promote the progress and useful arts and science and, thus, has a broad scope. Hence, these documents underline the liberal approach taken by the USA in patent jurisprudence which is evidenced by their prior patent applications, like the patent being granted to an atomic bomb by the USA. Therefore, the USA's approach of being one of the least conservative patent systems could be a motivator for Moderna to file the suit there, as the courts would be more inclined to award damages.

    Coming to the case of Moderna, the primary focus herein is the issue of estoppel. On the one hand, Moderna announced the non-enforcement of its patent during the COVID-19 pandemic. Regardless, it did not create an exception herein for big companies like Pfizer and BioNTech. However, on the other hand, it mentioned two qualifiers in the statement; firstly, the non-enforcement of patents till the pandemic continues, and secondly, it was particularly for vaccine access in low and middle-income countries. Thus, after analysing its prayer, it appears that Moderna believes the pandemic to be over on March 8, 2022, because in its prayer, it is claiming damages after this date, and it has exempted the damages for sales made to low and middle-income countries. Hence, the interpretation of this issue might be significant in understanding the core of the dispute.

    Moreover, this suit by Moderna initiates the debate between intellectual property law and the human right to health and access to healthcare enshrined in Article12 of the International Covenant on Economic, Social and Cultural Rights, 1966 and Article 25 of the Universal Declaration of Human Rights, 1948. It is essential to clarify whether the human right to health and access to healthcare will override the intellectual property law or not. The desire of the two companies in allegedly using Moderna's patented mRNA technology was to ensure the human right to health and access to healthcare, and the verdict will seek to clarify the aforementioned debate. However, the court may also harmoniously interpret the intellectual property law with the human rights law and seek to apply it to the current fact situation, which has multiple different circumstances like the qualifies used by Moderna in its estoppel, the brand-value of Pfizer and BioNTech, alternative avenues available with these two companies, etc.

    Lastly, in this case, Moderna has prayed only for damages and has not prayed to remove Pfizer and BioNTech's vaccines or block their future sales. Thus, it underlines Moderna's approach to ensuring that the end-user (which is the general public) does not bear the brunt of the alleged infringement. Accessibility and availability of the vaccines will not be affected regardless of the decision of this case because the prayer of this suit is limited only to the damages claimed by the two pharmaceutical companies. Hence, this suit by Moderna is respecting everyone's human right to health and access to healthcare.

    Therefore, this suit by Moderna has the potential to lay down the practice of enforcement of pharmaceutical patents in crisis situations like COVID-19. This practice can either result in a more liberal approach wherein the human right to health and access to healthcare gets underlined, or it may result in a stricter approach to highlighting the intellectual property law. Regardless, the accessibility and availability of these vaccines will not be affected. Hence, this suit is an excellent opportunity to clarify the debate between intellectual property law and the human right to health without actually limiting the access of COVID-19 vaccines to people in the near future.

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