The second wave of H1N1 influenza virus has now hit the populace, targeting certain at-risk victims. On October 24, 2009, the Obama administration declared the 2009 H1N1 "swine flu" pandemic a national emergency and acted swiftly in lifting regulatory hurdles that would otherwise hinder the vaccine's administration by medical providers or otherwise slow the progress of getting the vaccine supply to members of the public. On December 15, 2009, the USDA announced it has issued a conditional license to Pfizer Animal Health for a pandemic H1N1 influenza vaccine intended for pigs. This is the first pandemic H1N1 influenza vaccine license issued by USDA.
There are five U.S. manufacturers of H1N1 vaccine intended for humans - some of these entities are yearly suppliers of seasonal flu vaccine. Manufacturing of the H1N1 vaccine has hit several roadblocks, including logistics issues in developing the vaccine supply in chicken eggs. Federal, state and local governments, formerly confident in their ability to anticipate and meet the demand for supply of H1N1 vaccine, are now short on supply to meet the growing public demand. As a result, there is a stirring anxiety in the populace.
However, the administration has not altogether exhausted its recourse in beefing up the vaccine supply. 28 U.S.C. § 1498 allows the use of a patented invention by the U.S. government or its contractors in return for "reasonable" compensation. Pursuant to § 1498(a), a private party cannot be held liable for infringement for any goods "used or manufactured by or for the United States."
Essentially an eminent domain statute, § 1498 enables the government to manufacture and use a patented article for "just compensation" under the 5th Amendment of the U.S. Constitution. The statute seeks to remove obstructions to procurement of patented articles, prevent the threat of injunction against government suppliers, and transfer the liability exposure associated with claims of infringement over to the federal government. However, the aggrieved patentee seeking compensation from the government or its contractors under § 1498 faces a long, uncertain road to "just compensation" before the U.S. Court of Federal Claims. The aggrieved patentee cannot seek to enjoin the government or its third party contractor. Section 1498 gives the government sweeping powers to use patents, enabling rapid development and dissemination of H1N1 influenza vaccine in the event the government is otherwise unable to meet the demands of the current global pandemic.
It remains to be seen whether we will see an abrogation of patent rights by the government in response to the H1N1 pandemic. Only time will tell. Meanwhile, the investment-backed expectations of vaccine manufacturers hang in the balance, as these entities currently have little idea of the risks and estimated losses they stand to bear in the event such plans are put into action. This is to say nothing of the effect, if any, a compulsory licensing approach would have on the spirit of future innovation.