Overview

As the ongoing outbreak of coronavirus is becoming a massive threat for the world, the race to find a cure has been more urgent than ever. Recently, optimism can be restored when Gilead Sciences – a United States company has announced its experimental remdesivir emerging as the most promising candidate against the fatal epidemic.

Issue

Although the remdesivir is still under clinical trials, a Chinese pharma – BrightGene has successfully copied it. Moreover, the Chinese pharma has mass-produced the remdesivir’s active ingredient and is in the process of turning it into finished doses. With that development, the Chinese company’s stock even reached 20% peaking at the daily cap allowed on the exchange. However, BrightGene already made clear that the generic version is still in a research & development phase and its final marketing must obtain a permission from the patent holder – Gilead.

On the other hand, researchers at the Chinese Academy of Sciences’ Wuhan Institute of Virology said that they had applied jointly with the Military Medicine Institute of the People’s Liberation Army Academy of Military Science for a Chinese patent on the use of remdesivir to treat the epidemic. The Institute said that it filed an application “from the perspective of protecting national interests”.

However, Gilead has been granted three patents in China for its antiviral drug remdesivir, in addition, Gilead also filed patent application with title “Methods for treating arenaviridae and coronaviridae virus infections” in 2016, although the patent has not been approved, the application explicitly covered the use of remdesivir to treat coronavirus. This means Gilead claimed the use of remdesivir years before Wuhan Institute for Virology filed a similar patent application. Therefore, it is unlikely the application of Wuhan Institute for Virology will be accepted.

Rules & Application

Treaties on Intellectual Property

Multilateral

As prescribed in Article 31 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to which both China and the United States are signatories, it is allowed to use a patent without having to obtain authorisation from the IP right holder in certain exceptional circumstances provided that:

  1. In the case of a national emergency, extreme urgency or public non-commercial purposes, the user must inform the IP right holder of its use of such right promptly; and
  2. The right holder shall be paid adequate remuneration in the circumstances of each case;

In BrightGene’s situation, even if the company might claim that it is for public non-commercial purposes in the national emergency situation, it still has to inform and pay an adequate remuneration to Gilead – the patent holder, if not the Chinese pharma will breach its obligation under international law.

Bilateral

The Economic and Trade agreement between the United States and China does not directly stipulate patent infringement, however, it regulates that in case a party files to get approval for marketing of a pharmaceutical product, China shall provide patent holder with:

  • A system to notify the patent holder that other person is seeking to market the product during the term of patent of that product; and
  • Adequate time and opportunity for patent holder to seek available remedies such as preliminary injunctions or equivalent effective provisional measures prior to the marketing of an allegedly infringing product.

Therefore, as the trade agreement has already taken into force, Gilead – the patent holder of remdesivir may be informed and given adequate time and opportunity to seek remedies before BrightGene begins to market the product if BrightGene is approved for marketing the remdesivir.

China

Pursuant to China’s Patent Law, Article 14 allows the competent department to grant a designated unit to exploit a patent in case of national or public interest but that unit shall pay royalties to the patentee. Article 69 regulates cases which are not be deemed to be patent right infringement, one of the cases is the use of patent specially for the purpose of scientific research and experimentation.

Therefore, BrightGene’s act will not be considered as patent infringement in case it only use the remdesivir for research and experimentation.

However, the mass production is an unusual move of the Chinese pharma who claimed its research and development intention. Therefore, to ensure its move to be legal, BrightGene should obtain the authorization from competent authority and pay royalties to Gilead in order to exploit the patented drug.

Conclusion

Although the Chinese pharma confirmed about its research and development intention towards the patented drug, it remains as a controversy due to its mass production, specially, when the intellectual property protection in China has long been criticized by the Western world and it was also cited as reason of the trade war between the United States and China.

As the Economic and Trade agreement between the United States of America and the People’s Republic of China – first phase of a broader trade deal has been signed and taken effect in which “The Parties shall ensure fair, adequate, and effective protection and enforcement of intellectual property rights. Each Party shall ensure fair and equitable market access to persons of the other Party that rely upon intellectual property protection”.

For these reasons, it can be predicted that the application of the Wuhan Institute of Virology and the application for permission to marketing from BrightGene will not be likely to be accepted as intellectual property protection of China is now staying as a sensitive topic in the international community.


DISCLAIMER

This LBN newsletter are NOT legal advice. Readers are advised to retain a qualified lawyer, should they wish to seek legal advice. VCI Legal are certainly among those and happy to be retained, yet VCI Legal is not to be hold responsible should any reader choose to interpret/apply the regulations after reading this LBN without engaging a qualified lawyer.