COVID-19: New German legislation to fight pandemic may affect granted German patents

By Dr. Sebastian Fuchs

05-2020

In the wake of the COVID-19 pandemic the German government has recently passed a “corona crisis package”. The so-called Act for protecting the Population in the Event of an Epidemic Situation of National Importance, (Gesetz zum Schutz der Bevölkerung bei einer epidemischen Lage von nationaler Tragweite) the “Epidemic Protection Act”, provides for several amendments to existing laws. One amendment provides for measures to restrict German patents, e.g. covering pharmaceuticals or medical devices

The amendment already entered into force immediately on 27 March 2020, its day of adoption. The below Q&A-style guide is to inform about the potential impact of the Epidemic Protection Act on patents.

This Q&A-guide will be constantly updated. We will continue to monitor the situation closely and will report on any new developments. Our patent team in Germany is prepared to advise on any measures based on the new regulations relating to the COVID-19-pandemic. Should you have any comments, please send us a note to: [email protected].

Date of last update: 7 May 2020

Q: Does the Epidemic Protection Act provide for ways to limit the Exclusive Use of a Patent given the COVID-19 Epidemic?

A: Yes. The Epidemic Protection Act amends the German Act on the Prevention and Control of Infectious Diseases in Humans (Gesetz zur Verhütung und Bekämpfung von Infektionskrankheiten beim Menschen) hereafter “IfSG”, authorizing the Ministry of Health to issue so-called use orders for patents according to Sec. 13 of the German Patent Act, hereafter “GPA”.

However, the amendment to the IfSG ties in with an existing and (often-overlooked) regulation stipulated in Sec. 13 of the GPA providing for “I”. According to the legislative materials (Draft Epidemic Protection Act, BT-Drs. 19/18111) the purpose of the amendment is “to ensure a supply of products in the event of a crisis”. In that case “the effect of a patent can be limited in accordance with Sec. 13 of the GPA, for example, in order to be able to produce vital active ingredients or pharmaceuticals”.

Q: What is a “Use Order” according to the GPA?

A: According to Sec. 13 GPA a “patent shall not have effect insofar (…) the invention be used in the interest of public welfare”. The provision has not yet been applied by the Federal Government.

The use order is de facto an act of expropriation by the government, which is permissible only in exceptional cases and if compensation is paid (Art. 14 of the Constitution, Grundgesetz).

Q: Does the new Legislation change the Prerequisites for “Use Orders”?

A: Yes and No.

Sec. 5(2) no. 5 of the Epidemic Protection Act refers to the existing provision on use orders according to Sec. 13(1) of the GPA: 

§ 5 Epidemic Situation of National Importance, Regulatory Powers

(1) The German Bundestag declares an epidemic situation of national importance. The German Bundestag shall revoke the declaration of the epidemic situation of national importance if the conditions for its declaration no longer exist. The cancellation must be published in the Federal Law Gazette.

(2) The Federal Ministry of Health shall be authorized within the context of an epidemic situation of national importance and without prejudice to the powers of the federal states,

(...) 

4. to take measures by statutory order without the consent of the Federal Council to ensure the supply of medicinal products, including narcotics, the active ingredients, starting materials and auxiliary materials for these products, medical devices, laboratory diagnostics, aids, personal protective equipment and products for disinfection, and in particular

5. to order under Sec. 13(1) of the Patent Act that an invention relating to one of the products mentioned in no. 4 before the enumeration shall be used in the interest of public welfare (“öffentliche Wohlfahrt”) or in the interest of the security of the Federation; the Federal Ministry of Health may instruct a subordinate authority to make such an order;

(…).

The "epidemic situation of national importance" is declared automatically with the entry into force of Sec. 5(2)1 of the IfSG due to the spread of the new coronavirus (SARS-CoV-2).  In this situation, use orders under Sec. 5 (2) no. 5, 4 IfSG in conjunction with Sec. 13 of the GPA may be issued which refer to an "invention relating to one of the products mentioned in no. 4 before the list", including, for example, pharmaceuticals and medical devices.

Sec. 5(2) no. 5 of the IfSG further provides that the order has to be issued “in the interest of public welfare (“öffentliche Wohlfahrt”) or in the interest of the security of the Federation”. These conditions are identical to the wording of Sec. 13(1) of the GPA. Accordingly, it cannot be readily assumed that Sec.  5 (2) no. 5 of the IfSG goes beyond Sec. 13 of the GPA. However, the draft of the Epidemic Control Act provides for specific cases of application, namely that a patent is required "to ensure the supply of products in the event of a crisis" or "to be able to produce vital active substances or drugs" (cf. draft of the Epidemic Control Act, BT-Drs. 19/18111). The new regulation, thus, rather specifies the conditions for issuing use orders. 

However, the major difference in relation to Sec. 13 of the GPA lies in the competence: for issuing use orders: The competence of the Federal Government under Sec.  13 of the GPA is delegated to the Federal Ministry of Health under Sec. 5 (2) no. 5 of the IfSG, which may, if necessary, delegate it to a subordinate authority.

Q: Which Patents could potentially be affected by Use Orders according to Sec. 5 of the IfSG in connection with Sec. 13 of the GPA?

A: Sec. 5(2) no. 5 of the IfSG foresees that a use order may cover “an invention relating to one of the products mentioned in no. 4 before the enumeration shall be used in the interest of public welfare (…)”. Sec. 5 no. 4 of the IfSG lists the following products:

(…)

4. to take measures by ordinance without the consent of the Federal Council to ensure the supply of medicinal products, including narcotics, active ingredients, starting materials and auxiliary materials, medical devices, laboratory diagnostics,

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