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Law360 (August 28, 2020, 10:03 PM EDT ) The U.S. Department of Defense must investigate whether Moderna Therapeutics — which is developing a closely watched COVID-19 vaccine — disclosed federal funds it received in its patent applications, and seize the biotechnology company's patents if it didn't, a nonprofit has urged the agency.
Knowledge Ecology International asked Defense Secretary Mark Esper in a letter Thursday to probe the Massachusetts-based company's "apparent failures" to tell the U.S. Patent and Trademark Office that the Defense Advanced Research Projects Agency was funding its efforts to develop mRNA vaccines for viral infections, including its COVID-19 vaccine candidate.
If the company's government funding sources are exposed, the DOD can demand ownership of the patents under the Bayh-Dole Act, KEI said.
"To protect taxpayer investments, the funding agency should remedy the failure to disclose by at a minimum requiring a correction to the patent and more appropriately by taking title to the patents themselves, as the sanction for the failure to disclose," the advocacy group said in the letter.
DARPA had been funneling cash into research at Moderna as early as 2013, to help build its mRNA platform to develop vaccines for viral infections like Chikungunya and Zika, according to a KEI report published on Wednesday.
The DARPA-backed company then started filing patents for inventions related to methods involving the mRNA vaccine, without reporting those funds, the report said. Through an analysis of its U.S. Securities and Exchange Commission filings and academic papers, KEI said there is "clear evidence" that the company proceeded with its Chikungunya vaccine and antibodies programs without disclosing its primary funding source.
The federal money was also secretly used by the company to develop its COVID-19 vaccine candidate, the report said, citing DARPA's own website stating that "[t]he first coronavirus vaccine to start human testing is from DARPA investment in the Moderna company."
Not one of the 126 patents assigned to Moderna or the 154 patent applications it has filed disclose federal funding even though DARPA was among the first funders to support Moderna's mRNA research, the report said.
Most of those DARPA funds resulted in patented inventions for which their government funding was never disclosed, as required under the Bayh-Dole Act, the report said. The law requires companies to disclose when government-funded research played a role in a patented invention, and any violation of that could lead to the government taking over the patent's rights, KEI said.
KEI has pushed similar arguments before. In 2018, it accused Gilead Sciences Inc. of failing to disclose funding from the National Institutes of Health for its blockbuster line of sofosbuvir-based hepatitis C drugs, meaning the U.S. Department of Health and Human Services has the right to take ownership of the patent.
KEI sprung off from the Consumer Project on Technology, which was founded by Ralph Nader, in 2006. The organization bills itself as a non-governmental organization focused on social justice issues, namely "innovation and access to medical technologies."
Representatives for Moderna, DOD and DARPA did not immediately respond to requests for comment late Friday.
--Additional reporting by Dani Kass. Editing by Emily Kokoll.
For a reprint of this article, please contact reprints@law360.com.
