IP licensing during the pandemic in the Philippines

    By Dina D Lucenario, Louie Alfred G Pantoni and Rosarie Raysalyn Z Villasanta, Castillo Laman Tan Pantaleon & San Jose
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    Intellectual property lawyers in India and the Philippines, two of the region’s most affected countries, explore how compulsory licensing regulations may assist in fighting the pandemic

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    Philippine intellectual property (IP) laws offer several avenues of hope for fighting the pandemic. It may use voluntary or compulsory licensing to bring in life-saving vaccines and anti viral medication.

    While reaction to the pandemic did not cause significant policy shifts, government agencies including the Intellectual Property Office of the Philippines (IPOPHL) and the department of health have carried out special measures. Homegrown efforts have led to some licensing from innovation and technology support offices for testing kits, and others await results of patent applications.

    Legal framework

    IP licensing
    Dina D Lucenario
    Senior Partner, Head of Licensing Practice at Castillo Laman Tan Pantaleon & San Jose in Manila
    T: +632 8817 6791-95
    E: dina.lucenario@cltpsj.com.ph

    IP licences are governed under Republic Act No. 8293, as amended, or the Intellectual Property Code of the Philippines (IP code), and in certain cases involving compulsory licensing, as regulated under Republic Act No. 9502, or the Universally Accessible Cheaper and Quality Medicines Act of 2008. IP licensing may be either voluntary or compulsory.

    Voluntary licensing

    Prohibited and mandatory clauses. A voluntary licensing agreement or technology transfer arrangement (TTA) requires the inclusion of certain mandatory provisions and the exclusion of certain provisions for being unduly restrictive of competition and trade. TTAs that comply with these clauses need not be registered with the IPOPHL.

    Registration requirement. Failure to comply with the above-mentioned provisions on mandatory and prohibited clauses renders the entire agreement unenforceable, unless: (1) an application for exemption in exceptional and meritorious cases has been filed and subsequently granted; and (2) the TTA or voluntary licensing agreement is approved and registered with the IPOPHL.

    Exceptional or meritorious cases. Under the recently issued Revised Rules and Regulations on Voluntary Licensing, the IPOPHL considers the following to be exceptional or meritorious cases:

    • High technology content;
    • Increase in foreign exchange earnings;
    • Employment generation;
    • Regional dispersal of industries;
    • Substitution with, or use of, local raw materials; and
    • Pioneer status registration with the Board of Investments.

    Requests for exemption. Requests for exemption are evaluated based on the adverse effects of the terms and conditions of the TTA on competition and trade, such as:

    • Acceptable worldwide industry standards and practices as it relates to the TTA;
    • The existence of a purchase option in favour of the licensor to purchase the licensee’s stocks or inventory, after the term of the agreement or arrangement;
    • Recognition of valid IP rights subsisting even after the termination or expiration of the TTA; and
    • Payment of all Philippine taxes relating to the TTA.

    Compulsory Licensing

    IP Licensing
    Louie Alfred G Pantoni
    Partner at Castillo Laman Tan Pantaleon & San Jose in Manila
    T: +632 8817 6791-95
    E: louie.pantoni@cltpsj.com.ph

    Under the IP code. The IP code gives the IPOPHL director general the power to grant a licence to exploit a patented invention, even without the patent owner’s consent, based on certain grounds including the existence of a national emergency, or other circumstances of extreme urgency, or when the public interest requires.

    This compulsory licence is issued after a verified petition has been filed, and patent owners and other parties with rights, interests or title on the patent are given an opportunity to respond or oppose the petition.

    Special compulsory licence. In recognition of the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS agreement) and the Doha declaration, Philippine law allows the grant of a special compulsory licence for:

    (1) the importation of patented drugs and medicines, on the recommendation of the secretary of the department of health, to ensure availability of quality affordable medicines; and

    (2) the manufacture for export to countries with insufficient or no manufacturing capacity to address public health problems. With respect to the first point, as a special compulsory licence is meant for domestic consumption, a grantee of a special compulsory licence may not re-export the products subject of such licence.

    Use by the government or authorized third person. Patents may also be exploited by the government, or an authorised third person without the consent of the patent owner, in cases of public interest or the national health emergency through a written authorisation from the IPOPHL director general. Only the Supreme Court may issue injunctive relief in these cases. Compulsory licences must contain basic terms and conditions defined in the IP code, including rate of royalties, scope and duration limited to the purpose, non-exclusivity, non-assignability, and use to be devoted predominantly for the supply of the local market.

    Adjusting to lockdown

    In the Philippines, the pressure on the supply chain has meant that patent owners were unable to manufacture, import, or supply and sell enough products necessary to deal with the pandemic. Registering medical devices that can be used to help breathing was also hampered by extensive lockdowns. The government has imposed social distancing and online processing solutions as part of the “new normal”.

    For this, the IPOPHL has an online filing portal. The technology transfer division of the IPOPHL also has a guide to its online filing services, as regards TTA services. It requires the completion of the applicable form, and the submission of digital or scanned copies of the listed documentary requirements to ttd.esoa@ipophil.gov.ph. An electronic statement of account is then sent to the applicant by e-mail with payment instructions.

    IP licensing
    Rosarie Raysalyn Z Villasanta
    Associate at Castillo Laman Tan Pantaleon & San Jose in Manila
    T: +632 8817 6791-95
    E: rosarie.villasanta@cltpsj.com.ph

    Vaccines and antivirals

    In April, Philippine President Rodrigo Duterte offered a reward of PHP10 million (US$208,000), later raised to PHP50 million, and a grant to the Philippine General Hospital for the development of a vaccine. This reward has not been claimed. While local governments import newly developed antivirals that have not yet completed scrutiny, such as Remdesivir, if they are not yet registered with the Food and Drug Administration (FDA), they may only be used by patients or institutions that have first secured a compassionate special permit (CSP) from the FDA, unless they are being used in a duly approved clinical trial.

    Application for a CSP must include:

    • The name of the requesting party (personal/ doctor/specialised institution/specialty society);
    • Name and age of the patient, and a brief medical history;
    • Itemised, detailed description of the product (generic and brand name, if applicable) with dosage form and strength;
    • An estimated quantity/volume needed, prescribed by a doctor;
    • A written commitment on the part of the authorised specialist to submit a clinical study report for every patient given the product, describing the quantity administered/used, therapeutic/desired effect, and any adverse reaction, to the institution or specialty society; and
    • A waiver of the FDA’s responsibility from any damage or injury arising from the use of the unregistered drug or device, to be signed by the responsible official of the institution or specialty society.

    The issuance of a CSP for individual use also requires proof of payment, the names and addresses of the specialists qualified and authorised to use the product, including their curriculum vitae, the medical abstract of the patient, and a prescription from an S-2 licensed doctor for dangerous drugs or ones containing controlled chemicals.

    If the CSP is for institutional use, the letter of application must be accompanied by proof of payment and reports as prerequisites for the renewal of permit; a reconciliation of the number or volume of products requested; number used; the corresponding patients, and the product details. These requirements must be submitted in PDF format to clinicalresearch@fda.gov.ph.

    Recently, the government has established a procedure for granting emergency use authorisation for covid-19 drugs and vaccines. While Pfizer and Moderna have announced vaccines that they claim are 95% effective, the cold chain logistics may require their own TTAs for the supply chain to materialise. Voluntary and compulsory licensing may hasten this deployment. However, as with Remdesivir, and without further issuances from the FDA, CSPs will still be necessary for the use of unregistered drugs.

    Innovation networks

    The IPOPHL also reached out to its network of innovation and technology support offices to develop innovations aimed at fighting the pandemic. A notable outcome is the GenAmplify RT-PCR Detection Kit, manufactured by Manila HealthTek, under a licence from the University of the Philippines National Institutes of Health. Its patent belongs to the university under the Technology Transfer Act of 2009. Other pending applications include face masks and face shields, protective suits, alcohol hand sanitisers, sensor-enabled hand spray, aerosol boxes, disinfection chambers and an “anti-covid” drink.

    CASTILLO LAMAN TAN PANTALEON & SAN JOSE

    CASTILLO LAMAN TAN PANTALEON & SAN JOSE
    The Valero Tower, 122 Valero Street,
    Salcedo Village
    Makati City – 1227, Philippines
    Tel: +632 8810 4371-73
    www.cltpsj.com.ph

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