Meddling in Moderna Patent Case Undermines Pandemic Preparedness

No one ever accused politicians of consistency. For instance, politicians love to attack "Big Pharma," but behind the scenes, engage in cronyism of the worst kind. The latest example is the Biden administration working on a multi-billion-dollar solution for one of the COVID-19 vaccine manufacturers, which allegedly violated other companies' patents on the very laudable quest to make a vaccine.

At issue is that officials at the Department of Justice have intervened in a patent infringement lawsuit and asked a federal district court to absolve COVID vaccine pioneer Moderna of a huge financial penalty -- and shift that burden onto U.S. taxpayers instead.

If the court grants the DOJ's request, it won't just harm taxpayers. In particular, it'll harm the biotech companies working on technologies that could combat future pandemics if their intellectual property rights can be violated without fear of penalty, as taxpayers will be drafted to subsidize such actions.

The specific case revolves around Moderna's blockbuster Covid-19 vaccine, which saved millions of lives and transformed the company into one of the nation's most profitable drugmakers. 

As is well-known, Moderna's vaccine relies on mRNA technology, which prompts people's immune systems to create antibodies to the spike protein of the virus that causes Covid-19. For decades, scientists had systematically taken steps to develop mRNA into a tool that could be used to create vaccines. What isn't well known is that mRNA required a delivery mechanism to be viable in the body and reach the cells in which it would be translated into a protein for the immune system to interact with. The problem was that the mRNA would break down in people's bodies too quickly to work properly.

Ultimately, scientists at a different company discovered a way to preserve mRNA a bit longer -- by encasing it in a fatty substance known as "lipid nanoparticles" that temporarily shield the mRNA. They patented this technology and licensed it for use to other pharmaceutical firms.

Moderna, however, allegedly used the technology without licensing it. So, in 2022, Arbutus, which owns the intellectual property on LNP technology, and Genevant, its licensee, sued for patent theft.

Legal observers believe that Arbutus and Genevant are likely to win their case. If they do, they could be entitled to billions of dollars in damages.

But Moderna might not be the one forking over those billions. Instead, U.S. taxpayers might foot the bill. 

Last year, the Department of Justice filed a rare "statement of interest" in the lawsuit, arguing that because the government purchased the vaccine and helped distribute it to Americans, the government -- not Moderna -- should be responsible for compensating the companies whose patents were stolen. 

The government's argument hinges on Section 1498 of the U.S. Code, a legal provision that allows the government to infringe on companies' patents when a product is made for the government. Historically, Section 1498 has been invoked for products manufactured "by or for" the U.S. government -- such as night vision goggles or fighter jet parts.

It's true that the government, through Operation Warp Speed, helped fund the development and production of Moderna's vaccine. But that shouldn't give a company the ability to abrogate intellectual property rights and then deflect the costs for that violation on to taxpayers. 

If courts decide that the government can invoke Section 1498 to underwrite alleged patent theft by any company that sells products to the government, even when products are for the general public rather than the military, innovators would immediately find themselves under threat. Some companies could prey on others, copy their discoveries at will, and immunize themselves from financial penalties -- so long as the government purchases some of the resulting products.

That scenario would cripple innovation. Intellectual property rights are a facilitator of innovation, the type of innovation that is essential to pandemic resiliency. 

Indeed, the impact would be especially dire for the upstart biotech firms focused on preventing future pandemics. Moderna's lifesaving mRNA vaccine (as well as Pfizer/BioNTech's) was effective because of the lipid nanoparticle delivery system that was developed by several scientists and companies. The ecosystem of licensing patents, thereby protecting intellectual property rights, is what makes innovation like this possible and it's required to improve humans' resiliency against infectious disease threats. 

Irrespective of the outcome of the case, if the precedent of allowing the government to enlist taxpayers to cover the costs of alleged patent infringement stands, it'll render patents virtually meaningless -- and deter investors from funding biotech breakthroughs. 

The administration would be wise to disentangle itself from the Moderna case. If it fails to do so, there might not be many innovators left when the next pandemic strikes.

Dr. Amesh Adalja is a board-certified infectious disease physician and a pandemic preparedness, emerging infectious disease, and biosecurity expert. He is a senior scholar at the Johns Hopkins Center for Health Security. The views expressed here are his own and do not reflect the views of his employer.