{"id":6691,"date":"2020-02-24T22:14:56","date_gmt":"2020-02-24T22:14:56","guid":{"rendered":"https:\/\/journals.law.unc.edu\/jolt\/?p=6691"},"modified":"2020-10-15T14:30:43","modified_gmt":"2020-10-15T14:30:43","slug":"an-intellectual-property-clash-amidst-the-fight-against-covid-19","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/an-intellectual-property-clash-amidst-the-fight-against-covid-19\/","title":{"rendered":"An Intellectual Property Clash Amidst the Fight Against COVID-19"},"content":{"rendered":"\n

With tens of thousands of confirmed cases of coronavirus globally and more than 2,200 deaths in mainland China,\u201cwartime\u201d measures<\/a> have been implemented. China has locked down several cities in the Hubei province and more than 50 million people<\/a> are under quarantine. The healthcare system in Wuhan, where the outbreak was first detected, has been flooded with thousands of sick patients. Chinese factories have been forced to close and global supply chains are at risk. Although the current level of economic disruption is\u00a0manageable<\/a>, if the coronavirus continues to spread, the global economic damage will proliferate.\u00a0<\/p>\n\n\n\n

Years prior to the 2019 novel coronavirus (COVID-19) outbreak, California based Gilead Sciences Inc. manufactured an antiviral,\u00a0Remdesivir<\/a>, for the treatment of coronaviruses structurally similar to COVID-19. Preclinical data on Remdesivir\u2019s treatment of MERS and SARS indicate that Remdesivir may have \u201cpotential activity\u201d against COVID-19, the coronavirus involved in the outbreak in Wuhan. Since Gilead does not have robust data on the effectiveness of the antiviral to treat COVID-19, the company and Chinese health authorities are\u00a0initiating clinical trials<\/a>.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n

Suzhou based drug maker, BrightGene Bio-Medical Technology Co., has developed technology to synthesize the\u201cactive pharmaceutical ingredients (APIs)\u201d\u00a0<\/a>of Remdesivir, but did so without obtaining permission from the requisite patent holder. BrightGene has said that it plans to license the drug from Gilead, but its development of technology to synthesize the\u00a0antiviral already amounts to patent infringement and presents a potential challenge to Gilead\u2019s intellectual property (IP) ownership rights in China. BrightGene also claims that it has not infringed on Gilead\u2019s patent rights because the product is not yet being sold on the market. This is an\u00a0interesting argument<\/a>, but under international and national patent laws, manufacturing a patented product without permission still amounts to infringement. BrightGene claims<\/a> that if Gilead approves BrightGene\u2019s manufacture of the drug, \u201cit will be supplied to relevant patients mainly through donations during the epidemic.\u201d\u00a0\u00a0<\/p>\n\n\n\n

On January 21, 2020<\/a>, Chinese researchers at the Wuhan Institute of Virology filed a patent application in China to patent the experimental Gilead drug that they believe will fight coronavirus, rather than pursue a license from Gilead to manufacture the drug. This move revives legal and ethical concerns regarding China\u2019s respect for IP rights.     <\/p>\n\n\n\n

In 2016, after Gilead invented Remdesivir, the company\u00a0applied<\/a> for a global patent, including in China, for the compound and on methods to treat coronavirus infections. The application in China is still pending. Because Gilead\u2019s patent application was filed more than three years prior to the Wuhan Institute\u2019s application, Gilead\u2019s filing may be deemed prior art and render the Wuhan Institute\u2019s application unpatentable.\u00a0\u00a0<\/p>\n\n\n\n

Under World Trade Organization<\/a> (WTO) Trade Related Aspects of Intellectual Property (TRIPS), an international legal agreement between all member nations of the WTO, in an emergency situation, China has the right to compel a company to license a patent for public welfare. A compulsory license allows an eligible drug manufacturer to legally produce and sell\u00a0\u201ccopycat versions\u201d<\/a> of patented drugs during national emergencies or health crises. Under a compulsory license, China would be required to pay a\u00a0fair market price<\/a> for the license. If the Wuhan Institute\u2019s patent were granted to the Chinese researchers, China may be able to avoid paying the licensing fees. The researchers \u201cmade their patent application \u2018from the\u00a0perspective of protecting national interests<\/a>\u2019\u201d and\u00a0will not exercise its patent rights<\/a> if foreign pharmaceutical companies work with China to curb the spread of the virus. However, if the Wuhan Institute\u2019s patent application is granted, China may use it to market the drug globally and cut Gilead out of any potential profits.\u00a0<\/p>\n\n\n\n

Previous Incidents of IP Theft <\/strong><\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0There are good reasons for Gilead to be worried about the protection of its IP in China. In discussions involving protection of international IP rights, China has frequently been at the forefront of controversy.\u00a0<\/p>\n\n\n\n

The number of\u00a0technology theft cases<\/a> investigated by the FBI involving China has risen since 2003. The Chinese government has interests in the clean energy, biotechnology, aerospace\/deep sea, information technology, and manufacturing sectors. According to FBI Director Christopher Wray, China uses multiple methods and techniques to obtain U.S. technology such as cyber intrusions, intelligence services, joint ventures, certain graduate students and researchers, and front companies.<\/p>\n\n\n\n

Joint venture partnerships often open U.S. companies up to risk because the partnership generally requires a transfer of technology and customers\u2019 personal data. This transfer is usually required for the U.S. company to enter the Chinese marketplace. However, U.S. companies may be cut out by their Chinese partners after the partners have received the IP. Chinese companies have been found using the technology even after partnerships with U.S. companies have ended. For example, a\u00a0Chinese wind turbine company<\/a> illegally obtained proprietary software from its U.S. partner after they entered a contract for more than $800 million in products and services.\u00a0\u00a0<\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0However, Chinese companies also use old-fashioned techniques of stealing technology. Huawei, the Chinese tech giant, incentivized employees to steal trade secrets from other companies, most notably,\u00a0T-Mobile<\/a>. T-Mobile has a robot, named Tappy, that tests devices before they go on the market and is a closely kept secret. Huawei employees stole the robotic arm to take photos before claiming to \u201cfind\u201d the arm in their bag and returning it. Huawei claimed that the employees were acting independently and fired them. However, the federal government disagreed and\u00a0indicted<\/a> them on ten different counts, ranging from conspiracy to steal trade secrets to obstruction of justice.\u00a0<\/p>\n\n\n\n

            Recently, a Chinese student was charged with several counts<\/a>, including acting as an agent of a foreign government and conspiracy. Another Chinese student was charged with one count of smuggling goods from the U.S. when he was found with 21 vials of biological research from a Beth Israel Deaconess Medical Center cancer research lab at Boston\u2019s Logan International Airport. <\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0China does not only steal IP through private companies and traditional means, it also leverages the open academic environment in the U.S. to its advantage. Just recently, the Chair of Harvard\u2019s Chemistry and Chemical Biology Department, Dr. Charles Lieber, was charged with lying about his involvement in China\u2019s\u00a0Thousand Talents Plan<\/a>. Dr. Lieber failed to disclose in his federal grant that he had a\u00a0significant foreign conflict of interest<\/a> by participating in the Thousand Talents Plan.\u00a0<\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other researchers have been implicated by their involvement in the Thousand Talents Plan. The former CEO, director of research programs, and four other researchers\u00a0at\u00a0Moffitt Cancer Center<\/a>, a Florida federally designated comprehensive cancer center, resigned in December 2019 for failing to disclose their activities as part of the Thousand Talents Plan and for keeping secret bank accounts in China to receive those personal payments. In this case, only one of the six was a Chinese national, while the other researchers were U.S. citizens.\u00a0<\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0In 2018, a billionaire known as the \u201cChinese Elon Musk,\u201d Liu Ruopeng, was accused of stealing a professor\u2019s ideas while he was a student at Duke University. At the time, Professor David Smith was working on an\u00a0invisibility cloak prototype<\/a> for the U.S. military.\u00a0 Liu and his old colleagues took pictures of Smith\u2019s lab, its contents, and measurements of equipment during periods of time when Smith was not in the lab. Once the colleagues returned back to China, they built an exact copy of Smith\u2019s invisibility cloak prototype.\u00a0\u00a0<\/p>\n\n\n\n

These examples only showcase some of the IP theft perpetuated by China. There are many more\u00a0examples of IP theft<\/a> in other technology sectors, especially through cyber invasions.\u00a0<\/p>\n\n\n\n

Ethical Concerns <\/strong><\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Various ethical concerns arise in situations where China seeks to erode U.S. IP rights. China undermining IP rights\u00a0disincentives foreign drugmakers and pharma<\/a> to invest in research and development of drugs to combat emerging diseases. Patents symbolize market exclusivity for a period of time, usually\u00a020 years<\/a>. During this time, drug companies are able to maximize profits because they have market exclusivity and do not have to compete with other drug companies manufacturing a generic version of the drug. Because of this limited amount of time to maximize profits, pharmaceutical companies typically direct their research funds to diseases that affect wealthier people who can afford to pay for expensive medications. Although patents exist to protect IP of innovators, the patent system also\u00a0inflates drug prices<\/a> and renders necessary medications inaccessible to some populations. This system already leads to underinvestment in diseases that affect developing countries and poorer populations, but on top of this, when China disregards foreign IP rights, foreign pharmaceutical companies are even more disincentivized to manufacture drugs for developing countries and poorer populations.\u00a0<\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Another concern that arises from China\u2019s disrespect of IP rights is a pharmaceutical company\u2019s willingness to help in the event of another national emergency in the future. Gilead has\u00a0offered samples<\/a> of Remdesivir to China and is currently working with Chinese health officials to conduct clinical trials on the efficacy and safety of the drug. Gilead may be motivated to assist China because they believe their 2016 patent filing will serve as\u00a0prior art<\/a> against the Wuhan Institute\u2019s recent application. Further, if Gilead\u2019s 2016 filing blocks the Wuhan Institute\u2019s application, Gilead could stand to profit immensely from China\u2019s need for the drug, if clinical trials prove successful. However, actions of BrightGene and the Wuhan Institute indicate China would like to take control of manufacturing the drug and cut Gilead out.\u00a0 China\u2019s mistreatment of Gilead\u2019s patent rights may hamper the development of international research efforts and the willingness of U.S. pharmaceutical companies to offer experimental drugs and assist in clinical trials in foreign countries.\u00a0<\/p>\n\n\n\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0There is obvious dissonance between China\u2019s understanding of IP rights and the West\u2019s understanding of these rights. Westerners value individual innovation and can be described as\u00a0egocentric<\/a> in nature, but the Chinese\u00a0value<\/a> society as a collective and emphasize the pursuit of power as a society.\u00a0 There is no simple solution to the enforcement and protection of patent rights in China, as the disagreement over IP rights is in part motivated by cultural differences.\u00a0<\/p>\n\n\n\n

Kaity Emerson and Christine Xiao<\/p>\n","protected":false},"excerpt":{"rendered":"

With tens of thousands of confirmed cases of coronavirus globally and more than 2,200 deaths in mainland China,\u201cwartime\u201d measures have been implemented. China has locked down several cities in the Hubei province and more than 50 million people are under quarantine. The healthcare system in Wuhan, where the outbreak was first detected, has been flooded …<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/6691"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=6691"}],"version-history":[{"count":1,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/6691\/revisions"}],"predecessor-version":[{"id":6692,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/6691\/revisions\/6692"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=6691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=6691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=6691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}