Patent Pools and COVID-19

Countries are still in the thick of fighting the COVID-19 health crisis and scientists and pharmaceutical companies are in the process of uncovering the molecular secrets of this novel coronavirus and developing potential vaccines, we need to revisit the issue of patent pools. During normal times in today's complex world, to produce certain goods and services, any manufacturer would have to obtain licenses to several interrelated patents, something that is known as the complements problem. Where there are many patents to obtain, this will complicate matters for innovation and indeed could lead to under use of technologies and heavy patent costs.<br><br>In order to simplify the process, patent pools can be created between patent owners that bundle multiple pieces of intellectual property together, rather than on a patent-by-patent basis, into a single license so that they can license their patents to other parties collectively. Patent pools thus reduce transaction costs for licensees and preserve the financial incentive for patent holders to commercialize their products. All this seems easy and straightforward—in an ideal world. In reality, however, patent pools can create anticompetitive practices. While patent pools can be pro-competitive, their anti-competitive effects arise in many ways.<br><br>In the U.S., there are the Antitrust Guidelines for the Licensing of Intellectual Property. The antirust guidelines recognize clearly the pro-competitive benefits and anti-competitive nature of patent pools. Therefore, the antitrust guidelines recognizes that the effects of patent pools will be vetted on a case-by-case basis. The focus of antitrust examination will be on the formation or structure of the patent pool and whether this formation impairs competition. Courts assess most antitrust practices under a "rule of reason," which requires them to estimate the defendant's market power and the impact of some practice that is claimed to be unreasonably collusive or exclusionary.<br>