In August 2022, over two and a half years after the start of the Covid-19 pandemic, Moderna sued Pfizer and BioNTech for patent infringement. Specifically, Moderna claimed that Pfizer and BioNTech used its patented mRNA technology to develop their Covid-19 vaccine. Covid’s swift, widespread, and devastating effects and the urgent need for a vaccine accelerated a typically years-long research and development process into one short year. Although public health and humanitarian aid were undoubtedly at the forefront of vaccine developers’ minds, intellectual property (IP) rights and their economic incentives were a significant factor as well.
In the United States, IP laws regarding patent protection are largely based on utilitarian and economic theories. The monopolistic rights given to patentholders and the typical damages for patent infringement reflect these theoretical foundations. In its complaint, Moderna seeks “fair compensation” for Pfizer’s use of the mRNA technology, essentially a cut of Pfizer’s profits, which could potentially amount to billions of dollars from a period of only two to three years. Despite the billion-dollar vaccine industry, the strong economic bases of patent protection are potentially at odds with promoting scientific innovation. The critical need for worldwide Covid vaccines to save potentially millions of lives underscored whether utilitarianism and economics are always the best rationales for IP. Public policy considerations, including public health and humanitarian aid, may justify at least partial waiver of IP rights in certain circumstances. Even Moderna acknowledged this, professing in its complaint its “belief that intellectual property should never be a barrier” to the vaccine. The company initially pledged not to assert its Covid-19 patent rights against fellow Covid vaccine developers to reduce barriers to global vaccine access. However, billions of dollars in competitors’ profits and an amended pledge later, the biotech industry is now watching an imminent IP battle between pharmaceutical giants. This current situation is unique in many respects, due to not only the scientific, economic, and social significance of the patents at stake, but also the companies’ global reputations as leading medical innovators.
Moderna’s complaint alleges that Pfizer and BioNTech infringed Moderna’s patents on mRNA technology used between 2011 and 2016 in other vaccines. In the company’s press release, Moderna’s CEO also emphasized its prominence in the field of RNA technology and the substantial time and resources used to develop the technology that Pfizer copied. The infringement focuses on the chemical modifications Moderna introduced to mRNA to improve immune system evasion and the lipid nanoparticle formulation used to deliver the modified mRNA.
Like most patent infringement plaintiffs, Moderna has financial stakes as a top priority. Moderna ultimately seeks a portion of Pfizer’s profits from its Covid vaccine, citing Pfizer’s unjust “substantial financial windfall” from its allegedly unauthorized use of Moderna’s technology. Pfizer’s 2021 revenue from its Covid vaccine totaled over $36 billion, and it expects another $32 billion in 2022. Moderna also seeks enhanced treble damages, suggesting willful or bad faith infringement from Pfizer. These are bold claims coming from Moderna, a relatively young company founded in 2010, against the nearly two-century-old industry giant, Pfizer.
This lawsuit demonstrates the utilitarian and economic theories of IP law, particularly patent law, in the United States. Under these theories, patent protection incentivizes invention and innovation by giving the inventor a temporary but strong monopoly on their invention. This monopoly allows the inventor to exclude others from using their information and knowledge without authorization. Information is non-rivalrous and non-excludible and would otherwise fall victim to public goods problems. For example, free riders can wait for someone else to create the invention, and then replicate the invention at a much lower cost. The original inventor would thus be disincentivized to disclose their invention for fear of losing valuable profits in a market saturated with copycats. Patent rights prevent these detriments of information as a public good by giving the inventor legal control over dissemination of the information. Applying this theory here, Moderna would argue that its previous patents represented a tradeoff that the company would publicly disclose its valuable information on mRNA technology. In return, Moderna would receive a legally protected right to exclude others, including Pfizer, from using the information.
These economic theories are based on patent rights’ essential function to tightly control information use; however, free dissemination of information is critical for scientific research, including vaccine development. The utilitarian foundations of U.S. IP law may not align with vaccine research goals, particularly in urgent pandemic circumstances. In these time-sensitive situations, allowing simultaneous inventors access to each other’s research developments may best serve the public interest. Some critics even argue that patents and economic incentives are entirely unneeded for vaccine research and development. The highly specialized technical know-how required and the complex regulatory framework for entering the vaccine market naturally weed out copycat competitors and create a monopoly position without patent rights. Further, vaccine manufacturers are in a favorable position selling a product whose demand reliably far outstrips supply.
Despite this view, patent rights will likely still play a role in pandemic vaccine development. However, this role may be more detrimental than beneficial to inventors and ultimately consumers. Although an inventor would prefer to keep a tightly guarded monopoly on their lucrative vaccine technology, this economically driven IP strategy may exacerbate the pandemic. Research responses to pandemics may require inventors to relinquish potential profits from strong information monopolies in exchange for rapid information sharing to encourage life-saving follow-on innovation. Enforcing pandemic research patent rights can significantly limit advancements in vaccine development, the opposite of the intended goal to serve public health.
Moderna recognized this dilemma and in October of 2020, it initially pledged to not enforce its IP rights related to Covid-19 vaccines during the pandemic. Considering the myriad economic benefits of IP rights, this pledge may have seemed financially counterproductive for Moderna. However, it demonstrated that Moderna also knew of the unprecedented public health and policy concerns at stake and did not want to deter other researchers from simultaneously developing Covid vaccines. However, in March 2022, Moderna updated its IP pledge, instead committing to never enforcing its Covid-19 patents against 92 middle- and low-income countries, thus making this lawsuit possible. It remains a question whether the original October 2020 pledge caused any parties to reasonably rely on Moderna’s assurance and whether there may be legal contract obligations to Pfizer or other vaccine developers. Regardless of potential contract law disputes, the urgent pandemic needs for Covid vaccines drove Moderna to its “Global Commitment to Intellectual Property Never Being a Barrier to COVID-19 Vaccine Access” cited in its complaint. Money and economic benefits are a significant motivating factor in the lawsuit, but the public health and humanitarian considerations underly the policy concerns of the claim.
The Covid pandemic forced the IP field, the scientific community, and the global public health sector to reconsider the role of economic and utilitarian theories in patent rights. Although innovators deserve financial rewards for being the first to develop and license their vaccines, the intended widespread benefit of this biotechnology can be significantly limited with overly restrictive information monopolies. Due to the scope and effects of Covid, vaccines have taken a new meaning, representing the potential return to the pre-pandemic “normal” and restoring society and the economy. Thus, the patent rights for Covid vaccines might have more than just economic value; they also bring reputational influence of goodwill and societal stabilization. Other areas of IP, such as copyright and trademark law, are less rooted in utilitarianism and are partly based on the personhood theory, which relates the IP to the creator’s sense of self and identity. Patent law is less concerned with traditional expressive elements of creation. However, the humanitarian nature of Covid vaccine development and distribution may implicate some personhood concerns of distributive justice and fairness. During such global health crises, reducing some of IP’s economic barriers to information and focusing on the personal effects on vaccine distribution may better serve the public interest.
Overall, IP scholars and policymakers should consider how non-economic theories may be, at times, better suited for IP protection and can help shape a more dynamic patent law system. While patent law should still strive to incentivize innovation and creation, policies must also acknowledge the effects of purely economic motivations on patient health and global health disparities. The Moderna v. Pfizer lawsuit illustrates the mismatches between economic foundations of patent law, biotechnological and pharmaceutical innovation, and emergency or pandemic situations.
Shelby Yuan is a second-year JD-PhD student at the Northwestern Pritzker School of Law.
The COVID-19 pandemic has brought the issues of personal privacy and biometric data to the forefront of the American legal landscape. In an increasingly digital world, privacy laws are more important than ever. This reality is especially true in the context of remote workplaces, where employers have facilitated a digital migration through a variety of means. The platforms employers use have the propensity to violate personal privacy through the capture and storage of sensitive biometric information. In response, states across the nation are exploring solutions to the potential privacy issues inherent in the collection of biometric data. One of the first states to do so was Illinois, enacting a standalone biometric privacy statute in 2008: the Illinois Biometric Information Privacy Act (“BIPA”). Today, BIPA is more relevant than ever and should act as a statutory blueprint for states looking to protect personal privacy and biometric data amid a global pandemic. Ultimately, though, BIPA must be supplemented by federal legislation drafted in its likeness to effectively protect individuals’ privacy on a national level.
II. Background of the Biometric Information Privacy Act
To fully understand BIPA and all its implications, one must appreciate the context in which it was enacted. The Illinois legislature passed BIPA in October 2008. The Act was passed in the immediate wake of the bankruptcy of Pay By Touch, a company which operated the largest fingerprint scan system in Illinois. Pay By Touch’s pilot program was used in grocery stores and gas stations, and its bankruptcy left users unsure of what would become of their biometric data – i.e., their fingerprints. “Biometric data – a person’s unique biological traits embodied in not only fingerprints but also voice prints, retinal scans, and facial geometry – is the most sensitive data belonging to an individual.”
Understandably, private citizens in Illinois and across the country want to safeguard their sensitive biometric data. With potential issues such as identity theft and data manipulation more prevalent than ever, people have plenty of incentives to ensure their unique identifiers stay private. In response to those concerns, legislatures have passed statutes to address biometric data and personal privacy. BIPA represents one of the most stringent of such acts in the country, setting strict requirements for the management of biometric identifiers in Illinois.
BIPA defines “biometric identifier” as (1) a retina or iris scan, (2) fingerprint, (3) voiceprint, or (4) a scan of hand or face geometry. Further, “biometric information” refers to any information, regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier used to identify an individual. The requirements outlined in Section 15 of the Act – which addresses the retention, collection, disclosure, and destruction of biometric data – implicate a slew of potential legal issues. The section stipulates that a private entity can collect a person’s biometric data only if it first informs the subject that a biometric identifier is being collected, informs them of the specific purpose and length of term it is being collected for, and receives a written release from the subject.
Further, the Act outlines the following concerning retention of such data:
(a) A private entity in possession of biometric identifiers or biometric information must develop a written policy, made available to the public, establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or within 3 years of the individual’s last interaction with the private entity, whichever comes first.
Thus, BIPA represents a statute narrowly aimed at maintaining the security of biometric data. While BIPA was relatively unknown in Illinois between 2008-2015, a wave of litigation has since swept through the state as employees began suing their employers. Such litigation was seemingly inevitable, as BIPA provides sweeping protection for individuals against biometric data abuse. The complexities of such issues have become clearer and potential legislative solutions to them even more important in the midst of a global pandemic.
III. Personal Privacy & Biometric Data in the COVID-19 Pandemic
The issues surrounding data privacy have become increasingly relevant in the ongoing COVID-19 pandemic, which effectively digitized the workplace as we know it. As the pandemic raged in the early months of 2020, workplaces around the globe were suddenly forced to digitally migrate to an online work environment. An inevitable result of newfound online worksites has been an increase in the utilization of biometric data. In an effort to facilitate remote work, companies have had to make work-related information accessible online. Employment attorney Eliana Theodorou outlines the ensuing issues for companies undertaking such efforts in an article entitled “COVID-19 and the Illinois Biometric Information Privacy Act.” For example, Theodorou writes, “Some of these platforms involve video recording or access by fingerprint, face scan, or retina or iris scan, which may result in the capture and storage of sensitive biometric information.” Thus, the collection and retention of biometric data has necessarily increased during the pandemic as companies made information accessible remotely when they shifted online.
Potential privacy issues accompanying the storage of biometric data will become even more difficult to navigate as companies return to physical workplaces with the pandemic still raging. Per Theodorou, “As workplaces reopen, there will likely be an uptick in the collection of biometric data as employers turn to symptom screening technologies that collect biometric data.” This could include, for instance, contactless thermometers and facial recognition scanning technologies used for contactless security access. The issue will thus continue to be the collection and storage of sensitive biometric data as employers return to work with the newfound priorities of social distancing and limited contact. The reality is that biometric data is still a relatively new concept, with its own specific set of issues and potential solutions. Personal privacy becomes ever harder to maintain in a digital world, with the use of biometric information often a necessity both for remote access and in-person return to work. Ultimately, the risks associated with the collection of biometric data remain largely undefined or misunderstood by employers. That lack of understanding has been exacerbated by a global pandemic necessitating a digital work migration.
IV. Possible Solutions to the Privacy Issues Raised by COVID-19 and Remote Workplaces
Illinois has provided a stellar blueprint for biometric data privacy in BIPA. However, other states have been slow to follow. As of November 2021, only a handful of other states have enacted legislation aimed at the protection of biometric data. Texas and Washington, like Illinois, have passed broad biometric privacy laws. Other states like Arizona and New York have adopted more tailored biometric privacy approaches, while others have enacted laws specifically aimed at facial recognition technology. There are also proposed bills awaiting legislative approval in many more states. Ultimately, implementing widespread legislation on a state-by-state basis will be a slow and drawn-out process, rendering countless Americans’ biometric data vulnerable. Rather than continue this state-based campaign to solidify biometric data privacy, citizens must turn to the federal government for a more comprehensive and consistent solution.
The primary roadblock to legitimate privacy in the biometric information space is the lack of a centralized federal initiative to address it. “Despite its value and sensitivity, the federal government currently has no comprehensive laws in place to protect the biometric data of U.S. citizens.” The privacy issues inherent in the popularization of biometric data in pandemic-era remote workplaces demand federal attention. A wide-ranging statute applicable in all states is the first step in properly addressing these issues. Congress should look to BIPA as a blueprint, for it remains the only state law passed to address biometric data privacy which includes a personal call to action. It is unique in that regard, especially considering it was passed in 2008, and consequently provides the most aggressive statutory response thus far to potential privacy concerns. Whether a federal act is feasible remains unclear. In August 2020, Senators Jeff Merkley and Bernie Sanders introduced the National Biometric Information Privacy Act of 2020, which suggests the imposition of nationwide requirements similar to those outlined in BIPA. The viability of such an Act is doubtful, as previous privacy legislation has been difficult to pass. However, it is a sign of movement in the right direction – toward increased protection of personal privacy in a pandemic which has made biometric data more relevant and potentially at-risk for improper management and manipulation.