Made-in-Canada supply chain for COVID-19 medical equipment runs IP risks, lawyers warn – The Logic

Nathaniel Lipkus

Apr 17, 2020

According to a recent article in The Logic, Canadian manufacturers are looking to produce PPE and other medical equipment to support Ottawa’s efforts to source more domestic supplies to fight COVID-19. Authors Murad Hemmadi and Catherine McIntyre report that while the federal government has implemented emergency legislation to circumvent patents in order to help combat the public health emergency, “legal experts warn that companies are putting themselves at risk if they’re infringing on others’ intellectual property.”

The article notes that “the government’s emergency legislation modifies the Patent Act so it can choose a third-party manufacturer to make and sell a patented invention, although the IP holder must be notified and paid compensation.” “The classic example would be if there was a drug that was seen as the treatment [for COVID-19] and they didn’t want to pay through the nose for it,” says Nathaniel Lipkus, a partner in Osler’s Intellectual Property Group. “[If] there was a patent, then they would compel a licence.” As such, the same principle could apply to medical equipment, including masks or ventilators. 

Some emerging economies have “imposed similar rules or limited extended protections for expensive cancer or AIDS drugs,” according to the article. But Nathaniel tells The Logic that it’s “extremely rare — it’s a nuclear option in terms of what the bargain is with industry.” 

Nathaniel also says companies may have IP protections on specific components or specifications of medical equipment, providing an example of 3M’s patent on a nose clip used in masks. He also spoke to whether IP holders would be likely to pursue legal action against Canadian producers that create medical equipment for combatting the COVID-19 pandemic or recognize the public relations risk of suing a company that’s seen as helping in a public health emergency.

“Companies will try to figure out a way to maximize profit, but in a way that is seen as something that won’t spark backlash,” says Nathaniel, stating the example of Gilead Sciences, which, according to the article, asked the Food and Drug Administration last month to rescind its seven-year marketing exclusivity on the drug remdesivir, which is being tested to fight COVID-19.

For more of Nathaniel’s insight, subscribe to The Logic to read Murad Hemmadi and Catherine McIntyre’s full article, “Made-in-Canada supply chain for COVID-19 medical equipment runs IP risks, lawyers warn.”