By Andrew Karpan

Law360 (March 12, 2021, 8:19 PM EST ) A Canadian pharmaceutical company that is seeking a license to Johnson & Johnson's recently approved COVID-19 vaccine warns that if its request is rejected, it plans to ask the Canadian government to force J&J to grant it a compulsory license so it can sell the vaccine to low-income nations.

Ontario-based Biolyse Pharma Corp. made its licensing demands with J&J public Thursday, a week after the country approved the New Jersey pharmaceutical giant's single-shot COVID-19 vaccine.

Biolyse warned that "not every country" in the world is on course to roll out vaccines, and the company lined up support from at least one advocacy group that urged J&J to take the deal, which Biolyse says would let the company go forward with plans to manufacture 20 million doses.

"Biolyse has made an offer to J&J that should not be rejected," James Love, president of Knowledge Ecology International, said in a statement. KEI bills itself as a non-governmental organization focused on social justice issues, namely "innovation and access to medical technologies."

According to a letter that Biolyse Pharma sent J&J on March 3, the company is seeking a license to produce and distribute the vaccine in Canada and to export it around the world, in exchange for a 5% royalty on the sales.

John Fulton, a spokesman for Biolyse Pharma, told Law360 on Friday that J&J had informally indicated last month that it would not be interested in using Biolyse's facilities to manufacture additional vaccines.

Representatives for Johnson & Johnson did not respond to a request for comment from Law360 on Friday.

Biolyse said that if needed, it plans to use the legal framework of the country's Access to Medicines Regime, a law passed in 2004 that allows the Canadian Intellectual Property Office to grant compulsory licenses on essential medicines, but one that has almost never been used since it was enacted.

"It's kind of a rusty law," Fulton admitted, "but we're just following the rulebook."

According to Fulton, the framework of that regime would require Biolyse to sell the vaccines at no more than 25% of the rate at which J&J is selling them, and he said vaccines the company produces under the program would be aimed largely at export since "there's no demand here for it." Last week, Prime Minister Justin Trudeau announced that the country had an agreement with J&J to deliver 10 million doses to the country before September.

Biolyse, a small Canadian company, has a notable history of fighting U.S. pharmaceutical giants over patent licensing. In 2005, Biolyse beat Bristol-Myers Squibb Co. in a five-year patent battle that reached the Supreme Court of Canada over its efforts to put out a generic to compete with Bristol-Myers' blockbuster chemotherapy treatment Taxol.

Elsewhere around the world, the move to use compulsory licensing amid the pandemic has had mixed results. In Israel, the government reportedly allowed generic versions of AbbVie Inc.'s HIV drug Kaletra to be imported to treat coronavirus patients, even though the drug is still patent protected in the country.

In the U.S., however, it is unlikely that compulsory licensing would come into play, legal experts told Law360 last year. A 1980 law called the Bayh-Dole Act has march-in rights, which allow compulsory licensing, but the federal government has been loath to use those rights in the past, even when urged to do so for public health reasons.

Biolyse hopes that if it has to invoke Canada's equally dormant compulsory licensing legal framework, it will inspire others around the world.

If Biolyse is able to get a compulsory license for the vaccine, "that will be an example to other countries that the process can be worked through, and that, perhaps, will embolden other countries," Fulton said.

--Additional reporting by Dani Kass, Kevin Stawicki and Ryan Davis. Editing by Peter Rozovsky.

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