[Ip-health] License to NIH Spike Protein Technology Needed in COVID-19 Vaccines Demonstrates “Available to the Public on Reasonable Terms” Requirement

kathryn ardizzone kathryn.ardizzone at keionline.org
Tue Mar 30 08:57:42 PDT 2021


*License to NIH Spike Protein Technology Needed in COVID-19 Vaccines
Demonstrates “Available to the Public on Reasonable Terms” Requirement*

Posted on March 30, 2021 by Kathryn Ardizzone

A March 21, 2021 *New York Times* article
<https://www.nytimes.com/2021/03/21/world/vaccine-patents-us-eu.html> on
vaccine access discusses how a technology invented and owned by the
National Institutes of Health (NIH) is necessary to make several COVID-19
vaccines. The invention mentioned by the *Times*, titled *Prefusion
Coronavirus Spike Proteins and Their Use*, has been licensed to BioNTech
for the Pfizer-BioNTech vaccine and is also needed to manufacture the
Moderna vaccine and other COVID-19 vaccines.

Under the Bayh-Dole Act, a company that licenses an invention from the
federal government is required to make the resultant product, in this case
a COVID-19 vaccine, “available to the public on reasonable terms”, an
obligation that includes, but is not limited to, reasonable pricing. KEI
has located at least one redacted license
this technology, to a company called GeoVax, and has obtained a list of the
manufacturers that have been granted such a license (shared below).

This blog explains how the license agreement illustrates the “practical
application” working requirement for licenses to government-owned
inventions–obligations that companies will have to accept if they want to
use the spike protein on legal grounds. This blog also notes how at a time
when access to federally-supported inventions on reasonable terms is more
crucial than ever, the National Institute of Standards and Technologies
(NIST) is proposing
modification that would eliminate this working requirement.
*The Spike Protein Invention *

The spike protein technology discussed in the *Times* article was conceived
in 2016 by scientists with the NIH’s National Institute of Allergy and
Infectious Diseases (NIAID) and the University of Texas, and was assigned
the number “E-234-2016 <https://www.ott.nih.gov/technology/e-234-2016>” by
the NIH Office of Technology Transfer. According to the NIH abstract for
the invention, it covers two patent applications and one patent, US
Application No. 62/412,703 (the “‘703 patent application”), US Application
No. 16/344,774, and US Patent No. 10,960,070. According to the NIH, No.
10,960,070 will be issued on March 30, 2021. The ‘703 patent application
has been disclosed
scientists in a paper reporting research on the Moderna vaccine, appearing
to confirm that the invention is used for that vaccine. A NIAID technology
transfer officer told KEI that “[t]his technology has the potential to be
useful for many coronavirus vaccines. As such, we consider it a platform

According to correspondence with NIAID in December of 2020, the following
companies have licenses to this invention:

Medigen Vaccine Biologics Corp.; Noachis Terra, Inc.; OncoSec Medical
Incorporated; BioNTech AG; N4 Pharm UK Limited; Dynavax Technologies;
RNAceuticals, Inc.; Sanofi Pasteur; GlaxoSmithKline Biologicals SA;
Adimmune Corporation; Vaxess Technologies; Meso Scale Diagnostics, LLC; The
Binding Site Group Ltd.; ReiThera Srl; GeoVax, Inc.; ExcellGene SA; and
Thermo Fisher Scientific Inc.

In September 2020, KEI submitted a Freedom of Information Act request to
the NIH seeking all licenses to the spike protein invention. The NIH still
has not provided the records.
*The Legal Framework *

All licenses to government-owned inventions must contain a clause stating
that the government may terminate the license if the licensee fails to
achieve practical application of the licensed invention. 35 U.S.C. §
209(d)(3)(A). This is an obligation to achieve practical application of
technologies licensed from the federal government.

Practical application is defined as manufacturing, operating, or practicing
an invention in such a manner as “to establish that the invention is being
utilized and that its benefits are to the extent permitted by law or
Government regulations available to the public on reasonable terms.” 35
U.S.C. § 201(f). The “reasonable terms” on which an invention must be
available to the public include price. For a detailed overview of
“practical application” *see* the comments
James Love and KEI regarding the NIST proposal to limit march-in rights
over prices to the public (NIST-2021-0001-0023). KEI also holds the
position that the terms that must be reasonable include the timing of
delivery and distribution, which can be important in a pandemic.
*The GeoVax License to the NIAID Spike Protein Invention*

The license
the NIAID invention located by KEI is an agreement between NIAID and GeoVax
Inc., a biotech company developing a COVID-19 vaccine. The appendix to the
license lists E-234-2016 and the associated patent application numbers as
being covered by the license.

The text below captures the practical application “working requirement” in
the license. Because all licenses in federally-owned inventions are subject
to the Bayh-Dole Act, they will contain this same language.

2.13.  *“Practical Application”* means to manufacture in the case of a
composition or product, to practice in the case of a process or method, or
to operate in the case of a machine or system; and in each case,under these
conditions as to establish that the invention is being utilized and that
its benefits are to the extent permitted by law or *Government *regulations
available to the public on reasonable terms.  [Emphasis in the original].
*Legal Leverage to Enforce the “On Reasonable Terms” Requirement*

To the extent that a vaccine relies upon the NIH’s patented claims, there
is some leverage that can be used to expand access to the invention and the
cell-lines, data and know-how to make the vaccine. But this leverage is

The Bayh-Dole Act states that licenses to federally-owned inventions “shall
contain such terms and conditions as the granting agency considers
appropriate” before listing the terms that are required for such licenses,
such as the practical application working requirement. 35 U.S.C. § 209(d).
As such, agencies may propose terms that do not conflict with the required

In addition to the requirement that the licensed inventions be made
available to the public on reasonable terms, the NIH can propose terms in
licensing agreements or funding agreements that companies or recipients may
accept or reject, such as some reach-through provisions on sharing
background intellectual property and know-how, (subject to some limitations
such as the provisions of 35 U.S.C. § 202(f)
if a funding agreement is not under the Other Transactions Authority).
Unlike an exclusive license, a non-exclusive license does not include the
threat of issuing licenses to third parties (since it is a non-exclusive
license). As such, the enforcement of the license terms for a non-exclusive
license would be determined by the license. While the government would not
terminate exclusivity on a non-exclusive license, it could terminate the
license, in whole or in part.

If the company does not obtain a license, or if the license is terminated
for cause, the NIH can pursue remedies for infringement. One of the most
powerful remedies is to seek an injunction, to block manufacturing and sale
of a vaccine. That is not an appealing remedy in a pandemic, where a
leading policy objective is to expand global production.

The other remedy the government can seek in a case of infringement is
compensation, under 35 U.S.C. §  284, including the possibility of treble
damages for willful infringement.  Although the range of possible outcomes
for an infringement trial are significant, there are some factors worth
mentioning. A vaccine may rely upon multiple patents, and a court often
takes this into account. An infringer may also be comfortable with a court
ordered compulsory license (a running royalty for infringement), an outcome
common in several medical device cases, for example.

It is also possible that the U.S. government, as a purchaser of vaccines,
has included language in some procurement contracts that authorizes the
company to use patented inventions, subject to the government compensating
the patent holders, under 28 U.S.C. § 1498, which, in these cases, would
involve the company benefiting from the government’s ownership of the

Over time, the willingness of the U.S. government and/or courts to more
aggressively enforce a patent might change once the pandemic is “over” or
the global supply of the vaccines is not so severely constrained.
*Non-Legal Leverage*

The fact that the NIH owns some of the vaccine technology does affect the
public narrative, and this can be a significant factor that the federal
government can use to justify other actions, including the use of the
Defense Production Act or other measures to force technology transfer.

The fact that COVID-19 vaccines using this invention–including
Pfizer-BioNTech and Moderna–would not function without an invention
conceived and owned by the federal government, together with their legal
requirement to achieve practical application, create a moral argument for
why the manufacturers should openly share their technologies. This is
especially true for Moderna, which accepted U.S. taxpayer funding for all
or most of the research on their vaccines (Moderna received over $1 billion
on research and development from the U.S. government, representing 100
percent of Moderna’s R&D costs).
*The NIST Proposal *

NIST is proposing
modification to a Bayh-Dole Act regulation that would make the practical
application requirement optional, by allowing companies that license
inventions owned by the federal government to avoid practical application
as long as they pay royalties. NIST would also narrow the definition of a
“subject invention” and gut the government’s authority to march-in when a
company fails to make federally-funded inventions, including vaccines,
available to the public or reasonable terms.

Comments on the NIST proposals can be submitted here
<https://www.regulations.gov/document/NIST-2021-0001-0001>. They are due
April 5, 2021.
Kathryn Ardizzone, Esq.
Knowledge Ecology International
1621 Connecticut Avenue NW, Suite 500
Washington, DC 20009
kathryn.ardizzone at keionline.org
(202) 332-2670

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