June 29, 2020 Practice Points

COVID-19 PREP Act Declarations and EUAs for Medical Device Licensors

Practitioners should review the relevant PREP Act declarations and FDA EUAs before and in advising clients who may be considering licenses giving free access to their intellectual property.

By James R. Browning Jr.

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In order to combat the ongoing COVID-19 pandemic, several medical device companies are offering free licenses of their patented medical equipment—allowing increased production and deployment of that equipment to those seeking to treat, diagnose, and slow the spread of the virus. Whether through collective movements like the Open COVID Pledge and the COVID-19 Technology Access Framework or organization-specific permissive licenses, royalty-free licenses have become available in several instances for technologies like ventilators, testing equipment, and logistical solutions. Although the goal is to make important technology available for those who need it, increased access to this intellectual property may create liability concern for practitioners with clients offering such licenses. For example, will a patent holder be held liable for injuries caused by a ventilator manufactured by a licensee? Recent declarations by the U.S. Department of Health and Human Services (HHS) under the Public Readiness and Emergency Preparedness Act (PREP Act) and the Food and Drug Administration’s (FDA) Emergency User Authorizations (EUAs) may provide guidance as to these concerns.

The PREP Act, codified at 42 U.S.C. 247d-6d, empowers HHS to issue declarations immunizing covered entities and individuals from liability stemming from the use of countermeasures to combat diseases or other threats which constitute a public health emergency. On February 4, 2020, HHS issued such a PREP Act declaration granting immunity from liability under state and federal law against all claims “caused by, arising out of, relating to, or resulting from” the “manufacture, testing, development, distribution, administration, and use” of a covered countermeasure aimed at responding to COVID-19. Licensors of a “component or other article used in the design, development, clinical testing, investigation, or manufacturing of a Covered Countermeasure” are included among the declaration’s “Covered Persons.” The declaration extends immunity protections to any device used in a “Covered Countermeasure,” defined as “qualified pandemic or epidemic product[s],” which include drugs or devices “manufactured, used, designed, developed, modified, licensed or procured to diagnose, mitigate, prevent, treat, or cure a pandemic or epidemic or limit the harm such a pandemic or epidemic might otherwise cause.”

Additionally, FDA has issued EUAs in recent months that may limit potential liability for entities licensing specific products. EUAs authorize the HHS secretary to allow the introduction of devices intended to address emergencies like the ongoing COVID-19 pandemic. On March 24, 2020, for example, FDA issued an EUA for ventilators and ventilator accessories “in response to concerns relating to insufficient supply and availability of FDA-cleared ventilators” during the COVID-19 pandemic. In a 2017 FDA Guidance on EUAs, FDA took the position that

the terms and conditions of an EUA issued under section 564 [of the Federal Food, Drug, and Cosmetic Act] preempt state or local law, both legislative requirements and common-law duties, that impose different or additional requirements on the medical product for which the EUA was issued in the context of the emergency declared under section 564.

The 2017 guidance continues to state that it is “critical” that EUA conditions be “strictly followed” with “no additional conditions” and that in the event FDA wants parties operating under a EUA to also comply with preempted state law requirements, FDA anticipates “incorporating such requirements into the terms and conditions of the EUA.”      

Practitioners should review the relevant PREP Act declarations and FDA EUAs before and in advising clients who may be considering licenses giving free access to their intellectual property.

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James R. Browning Jr. is an associate attorney at Greenberg Traurig, LLP, in Atlanta, Georgia.

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