Canadian Policy option that can permit the government to exercise rights in patents arising under procurement contracts in Canada, if “prior obligations” exist, and how that relates to WHO COVID-19 pooling proposal

In Canada, the foreground intellectual property arising under procurement contracts by default belongs to the contractor. However, there are several exceptions to this rule. One key policy provision allows the government to claim title of the foreground intellectual property “where… prior obligations of the Crown to a third party or parties preclude Contractor ownership.”

Both the rule and a list of exceptions, including the above-mentioned, are provided in the “Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts.”

Put simply, according to this policy Canada may allow the World Health Organization (WHO), other UN agencies, foreign governments or even nongovernmental organizations such as the Red Cross, to use inventions arising from government procurement contracts. Yet, to invoke this exception there has to be a “prior obligation of the Crown to a third party” precluding contractor ownership of the foreground intellectual property. This provision is similar to 35 U.S.C. § 202(c)(4) in the United States, which KEI has explained before.

This exception further underscores the importance of having an initial concise memorandum of understanding on the intent to share rights in technologies funded by the public sector and other relevant actors, as proposed by the President and the Minister of Health of Costa Rica in their March 23, 2020 letter to Dr. Tedros Adhanom Ghebreyesus; and supported by a number of civil society groups and individuals. If such a memorandum of understanding existed today, Canada could use it to trigger this exception in procurement contracts relating to the coronavirus. If Canada invokes this exception and claims title over the foreground intellectual property, it may or may not grant open licenses – but the government would certainly retain the rights to do this if they so decide.