At Hoffmann Eitle, we are currently receiving questions from clients about IP-related aspects arising from the COVID-19 pandemic. As reported in the press, many companies are working hard to make items which are in short supply and high demand at the moment: personal protective equipment, ventilators, face masks, hand disinfectant and so on, even when this is not normally the field they work in. Established companies in those fields are increasing their manufacturing capacities and improving their products, e.g. exploring how they can be re-used. This raises important IP questions. We have put together the following short FAQ based on questions our clients have asked us:
FAQ COVID-19 patent issues
I want to make e.g. face masks, medicine, vaccines, testing tools, ventilators, tracking software or disinfectant to help the fight against COVID-19
Considering the special circumstances, can I just go ahead and make COVID-19 essential products?
There is currently no general exemption from patent or design infringement. Therefore, in principle the same issues apply to this situation as to the launch of any new product on the market under normal circumstances.
What trouble could await me if I just go ahead and make use of someone else’s patent or design?
Since there is no general exemption the usual laws apply. If there is IP covering the product you are making and distributing, you can be liable for infringement.
The usual consequences of unauthorized use of another company’s IP is (i) an injunction preventing further use and (ii) compensation for damage caused by actions already taken. Other negative consequences may also apply, such as destruction of infringing items.
If the product is needed in the fight against COVID-19 some remedies may be temporarily precluded, e.g. claims for recall and destruction may not be granted. In some countries this may also apply to injunctions, as a court could find that this is not a reasonable measure when there is a strong public need for those products. Under the current circumstances, a compulsory license/government permission may be available (perhaps also retroactively).
However, in most cases some monetary consequences will remain, e.g. the need to pay damages or a reasonable royalty for having used the IP. A notable difference is a government permission in Germany, in which case the government pays compensation.
If you are aware of the existence of the IP, you can contact the IP rights holder directly, or via your IP attorney, and try to obtain a License.
What if I didn’t know that relevant IP rights existed?
Not being aware of a patent or design is not a defence in IP infringement matters in Europe. Therefore, ignorance will not help reduce the risk of an injunction and will not alter any existing liability for damages.
What if my activity is not-for-profit?
Not-for-profit activity can constitute patent infringement. It is also quite possible that a not-for-profit activity can cause damage to the rights holder, e.g. lost profits.
What if I have been asked by someone else to make these products, e.g. a hospital or a government body?
The fact that an order is placed by the government or other official body does not necessarily alter the infringement situation, and does not necessarily automatically free the manufacturer from liability. It is of course possible for the body making the order to take on the liability so that it does not rest with the manufacturer. This can e.g. be done by agreeing on an appropriate indemnity clause in the supply contract – your IP attorney can advise you on this.
Generally, what factors increase the risk that I will run into an IP issue?
While each case has to be assessed individually, the below factors may indicate a higher risk:
- Your product is a direct copy of an existing product and you have no permission from the original manufacturer
- Your product has a relatively high level of technical complexity
- Your product has a lifetime which means it will still be in use once the immediate COVID-19 crisis is over
- Your product is to be delivered in many countries.
Should I carry out a freedom to operate (FTO) analysis before starting the manufacture?
An FTO can greatly reduce the liability risk by identifying relevant patents and designs, considering a workaround, a (compulsory) license or other options for risk mitigation. It can also allow a dialogue with IP right holders early on, which can avoid a later conflict. While a detailed FTO analysis may take some time, an initial report and assessment by your IP attorney is possible at short notice.
Should I file a patent application or register a design for my new products or improvements?
This should be considered. Such rights may be helpful to recoup the investment (at least later). IP rights can also help to obtain cross-licenses to use someone else’s patents/designs. It is not uncommon for inventions to arise when inventors or designers working in one field turn their attention to technical problems in a different field, because they come to the problem free of prejudices and with new sources of inspiration. Patent attorneys can generally prepare applications for you quickly.
I hold COVID-19-relevant patents/designs: what can I do to protect my IP?
Can I do anything to stop my technology being used by others without my authorization?
Yes, the usual laws on IP infringement apply. In the present situations, the government may not have to inform the patent holder before granting a permission to use a patent, although there are some defences available – both pre-emptively and retroactively.
I feel uncomfortable with so many companies now starting to make products competing with mine, and possibly infringing my IP. On the other hand, I am uncomfortable with enforcing my IP at present because I understand there is a huge public demand for these products, and I am also concerned about negative PR that may be associated with IP enforcement at present. What can I do?
As a first step, you may consider setting up a monitoring system to track new products and announcements of these, and where appropriate take up a discussion with the new producer early on. Often, an agreement may be reached which allows the new producer to temporarily help, while at the same time addressing legitimate business concerns of the IP rights holder.
My manufacturing sites are already working at maximum capacity, but I cannot fully meet the current demand. Can I inform interested companies that I’m willing to (temporarily) license my patent?
Yes, a general willingness to license a patent can be recorded in national patent registers, e.g. in Germany. It is also possible to contact potential co-operation partners directly, or via your patent attorney.
If you have any further questions please contact us.
Anne Schön, Partner, German and European Patent Attorney
Mike Gruber, Partner, German Attorney-at-law