Researcher works at a lab bench

Deconstructing Moderna’s COVID-19 Patent Pledge

By Jorge L. Contreras, JD

On October 8, Cambridge-based biotech company Moderna, Inc., a leading contender in the race to develop a COVID-19 vaccine, publicly pledged not to enforce its COVID-19 related patents against “those making vaccines intended to combat the pandemic.”

It also expressed willingness to license its intellectual property for COVID-19 vaccines to others after the pandemic. In making this pledge, Moderna refers to its “special obligation under the current circumstances to use our resources to bring this pandemic to an end as quickly as possible.”

Moderna holds seven issued U.S. patents covering aspects of an mRNA-based candidate vaccine directed to COVID-19 which entered Phase III clinical trials in July. The potential market for a COVID-19 vaccine is potentially enormous. As of this writing, the U.S. government has committed approximately $1.5 billion to acquire 100 million doses of Moderna’s vaccine if it proves to be safe and effective (with an option for 100 million more), and the Canadian government has agreed to purchase 20 million doses for an undisclosed amount.

In the high-stakes market for COVID-19 vaccines, it is worth considering the full range of factors that might motivate a private firm to relinquish valuable intellectual property rights for the public good. A better understanding of these factors could help policymakers to secure additional pledges from firms that have not yet volunteered their intellectual property in the fight against the pandemic.

IP and COVID-19

Early on in the pandemic, governments in countries including Canada, Germany, Israel, Ecuador, and Chile enacted statutory and administrative measures to ensure access to pandemic-related technologies through compulsory patent licensing (discussed here and here). In March 2020, possibly in response to some of these events, a number of firms holding patents relevant to the COVID-19 response began to pledge not to assert those patents against efforts to contain the outbreak or treat its symptoms. In April, the public “Open COVID Pledge” (which I helped to create) was launched, attracting pledges from entities large and small, primarily in the information technology, equipment, and service sectors, followed by a similar pledge effort by Japanese industrial firms.

But with the exception of AbbVie, which early-on pledged its patents covering the HIV drug Kaletra, and the open source vaccine group RaDVaC, which has taken the Open COVID Pledge, few patent concessions have been made by companies in the biopharma sector.

My co-authors and I have speculated about this lack of activity here, reasoning that “Simple economic forces may be at work … as firms that anticipate a direct and significant windfall from the sale of COVID-19 products may be less inclined to commit their IPR to the public cause or to make it available to their competitors.” Moderna’s patent pledge may shed new light on this question.

Motivating Patent Pledges

Firms have been making patent pledges for decades in connection with technologies including open source software, electric vehicles, green technologies, technical standards and even some biotechnology inventions (described in this article and collected in this database of pledges). A variety of motivations for these pledges have been proposed (here, here and here), including a desire by the pledgor (1) to support the uptake and diffusion of an emerging technology platform, (2) to gain more favorable treatment by a governmental agency, (3) to burnish the pledgor’s public image and reputation, and (4) to satisfy internal corporate social responsibility and philanthropic goals.

As noted above, Moderna has publicly framed its pledge in altruistic terms. Yet other benefits may also arise from Moderna’s voluntary commitment not to assert its vaccine patents. For example, Moderna’s pledge extends through the duration of the COVID-19 pandemic. After that, it has expressed a willingness to negotiate licenses of its technology, presumably on a fee-bearing basis. Thus, if Moderna achieves a broad uptake of its vaccine technology during the pandemic and competitors supply the vaccine to meet global demand, then they will need to obtain a paid license from Moderna to continue in this line of business after the pandemic is over (effectively a “loss leader” strategy).

There has also been speculation that Moderna’s mRNA patents may themselves be vulnerable to attack. As reported by several sources (see stories by IAM and Public Citizen), the U.S. National Institutes of Health (NIH), which funded at least some of Moderna’s R&D relating to its vaccine, has filed its own patent applications covering some of the technology underlying an mRNA-based COVID-19 vaccine. NIH is also reported to claim to have a joint interest in some of Moderna’s patents. A patent pledge by Moderna could help to defuse this situation and persuade NIH to pursue its own ownership claims over the mRNA vaccine less aggressively, leaving Moderna with an intact patent portfolio that is potentially attractive to investors and possible acquirors.

What’s more, citizen watchdog Knowledge Ecology International (KEI) has alleged that Moderna failed to disclose federal funding of the inventions underlying several of its patents, leading to an ongoing investigation by the Defense Advanced Research Projects Agency (DARPA). Thus, just as AbbVie’s pledge of patents covering Kaletra came shortly after the Israeli government announced a compulsory licensing order for Kaletra, Moderna’s recent pledge could help to alleviate government pressure on the company.

Finally, Moderna could face patent invalidity challenges from competitors. According to one report, there are five other mRNA-based COVID-19 vaccines currently under development by other firms. Such firms could have incentives to seek to invalidate one or more of Moderna’s patents claiming this technology. Moderna’s pledge not to assert its patents, assuming that it is binding and enforceable (see this article discussing how patent pledges can be enforced), could obviate any threat of infringement that might otherwise give rise to a declaratory judgment action seeking to invalidate Moderna’s patents.

In addition, as some have suggested, it is unlikely that Moderna’s pledge will cause it immediate economic loss. Unlike a replacement valve for a hospital ventilator, which can often be fabricated by anyone with a 3D printer and a design file, a vaccine is difficult and expensive to manufacture, especially in large quantities. Thus, without access to Moderna’s proprietary (trade secret) manufacturing data, techniques, and materials, even a rival vaccine manufacturer would have difficulty reproducing the precise processes used by Moderna in making its vaccine safely and effectively.

In addition, vaccine manufacture requires regulatory approval in most countries, and Moderna clearly has a significant head-start with respect to the approval of its own vaccine. As a result, it is unlikely that Moderna’s patent pledge will result in a sudden rush of competitors making the same vaccine in direct competition with Moderna in the short run, and perhaps during the full duration of the pandemic.

Unilateral vs. Collective Pledges

The combination of the above factors presents a surprisingly strong case for Moderna’s patent pledge — one that other firms in the biopharma sector would do well to consider. In doing so, however, firms may wish to think carefully about the manner in which they pledge their patents and other intellectual property. Moderna’s pledge, along with other unilateral commitments such as AbbVie’s, is a simple non-assertion covenant that is extended to the public. As such, it lacks the legal detail found in more robust pledge commitments such as the Open COVID Pledge and its associated licenses. For example, Moderna’s pledge does not seem to allow for suspension of a license if Moderna itself is sued by the licensee, a feature that many large companies find essential in today’s litigious environment.

In addition, the very brevity of Moderna’s pledge may give potential users pause. For example, it extends benefits to “those making vaccines intended to combat the pandemic,” but does not address the other exclusive rights of a patent holder — using, selling and importing patented articles. Should distributors of vaccines, or hospitals administering them, be concerned about this omission? A more complete license could encourage greater adoption and utilization of the rights extended by Moderna.

Given these considerations, Moderna may wish to consider joining a collective pledge community such as the Open COVID Pledge, which addresses these and other legal issues in a carefully considered manner. Doing so would be in Moderna’s own interest and would also encourage the further growth of this and other intellectual property sharing communities in this time of significant need.

Jorge Contreras

Jorge Contreras

Jorge L. Contreras is a Presidential Scholar and Professor of Law at the University of Utah with an adjunct appointment in the Department of Human Genetics. His research focuses on intellectual property, technical standards and science policy, and he is one of the co-founders of the Open COVID Pledge, a framework for contributing intellectual property to the COVID-19 response. Professor Contreras is the editor of six books and the author of more than 100 scholarly articles and chapters appearing in scientific, legal and policy journals including Science, Nature, Georgetown Law Journal, NYU Law Review, Iowa Law Review, Harvard Journal of Law and Technology and Antitrust Law Journal. He has served as a member of the National Institutes of Health (NIH) Council of Councils, the Advisory Councils of the National Human Genome Research Institute (NHGRI) and the National Center for Advancing Translational Sciences (NCATS), and as the Co-Chair of the National Conference of Lawyers and Scientists. He is a graduate of Harvard Law School (JD) and Rice University (BSEE, BA).

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