PREP Act Immunity and its Silent Treatment of Intellectual Property Rights

by Dennis Crouch

Although the Federal Circuit has dismissed Copan v. Puritan on jurisdictional grounds, I use the case to talk through COVID-19 immunity under the PREP Act, and whether patent infringement is included within its scope. 

The 2005 Public Readiness and Emergency Preparedness (PREP) Act provides immunity for claims related to manufacturing, distributing, administering, or using medical countermeasures during a public health emergency. Specifically, the Act states:

A covered person shall be immune from suit and liability under Federal and State law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure if a declaration [of a public health emergency] has been issued with respect to such countermeasure.

42 U.S.C. § 247d-6d(a)(1).

The idea here is to encourage rapid development and deployment of vaccines, drugs, and other products needed to combat an emergent situation.  When the Secretary of Health and Human Services declares a public health emergency, the PREP Act can be invoked to provide this legal protection to “covered persons” for “covered countermeasures,” subject to certain conditions specified in the emergency declaration.

The PREP Act does not explicitly mention patent law issues or intellectual property rights, but does create immunity for typical patent actions such as manufacture and distribution. The Act’s definition of the “loss” being immunized against are primarily focused on personal health issues such as death, illness, or physical injury. However, the definitions also include “loss of or damage to property, including business interruption loss.”  Lawyers have argued that encompasses patent infringement, but the Federal Circuit has not yet opined on the issue.

In response to the COVID-19 pandemic, HHS issued a PREP Act declaration in March 10, 2020 and subsequently has amended the declaration several times.  The declaration invoked the PREP Act liability protections those engaged in the development, manufacture, testing, distribution, administration, and use of medical countermeasures against COVID-19, such as diagnostic tests, vaccines, and therapeutics.

Copan Italia S.p.A. v. Puritan Medical Products Company LLC (Fed. Cir. 2024)

In 2018, Copan sued Puritan for infringing its patents covering “flocked” swabs used for collecting biological specimens. US8114027, US8317728, US8979784, US9011358, US9173779. Initially, the litigation proceeded typically until the onset of the COVID-19 pandemic. The subsequent increase in demand for flocked swabs, which were essential for COVID-19 testing, led to a stay of the litigation. This stay was lifted in October 2021, after which Puritan claimed immunity under the PREP Act for its swabs manufactured at its newly constructed P3 facility.

The district court, however, denied Puritan’s partial motion to dismiss, finding that Puritan had not yet established that its swabs were covered countermeasures based on the evidence in the record at the time.  District concluded that the facts had not yet been sufficiently establishing the complaint and other allowable sources at the motion to dismiss stage.  In particular, the court decided that the evidence did not clearly prove that the swabs were “covered countermeasures.”

Although the case is still pending in district court, Puritan appealed to the Federal Circuit under the Collateral Order doctrine which permits immediate appeal of orders that conclusively determine disputed questions, resolve important issues separate from the merits, and are effectively unreviewable on appeal from a final judgment.  In its decision, the Federal Circuit refused to hear the merits of the case — holding that the district court’s denial did not conclusively determine Puritan’s claim to immunity. Instead, it held that further factual development was necessary:

Clearly, the district court is contemplating further litigation will be necessary before a conclusive determination can be reached as to whether immunity is available to Puritan in this case.

The court emphasized that the district court had not made a final determination on the applicability of PREP Act immunity but merely found that Puritan had not yet proven its entitlement to such immunity based on the current record.  The appellate panel also noted that issue of PREP Act immunity is related to the merits of the case because it pertains to whether Puritan’s swabs are indeed covered countermeasures under the Act. This intertwining of issues further supported the decision that the collateral order doctrine did not apply.

Puritan had asked for some leeway because the immunity-from-suit portion was supposed to allow it to avoid litigation.  Here, however, the court concluded that not all immunity issues are immediately appealable.

I want to revisit a the key question in the case – whether PREP Act immunity extends to claims of patent infringement. The Act includes the broad language covering “any claim for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure,” including claims related to the “manufacture” and “distribution” of such countermeasures. Since patent infringement claims arise from the unauthorized making, using, or selling of a patented invention, makes sense that the fall within the required causal relationship  required by the PREP Act.   The harder element will be proving that patent infringement fits within the type of loss being immunized.  In particular, the courts will need to decide whether patent infringement is considered a “loss of or damage to property, including business interruption loss.” Courts sometimes identify patents as property and here the “including” portion of the statute seems to indicate that business interruption loss is a category of property damage.

However, there are also strong arguments against extending PREP Act immunity to patent infringement liability. The Act does not explicitly mention intellectual property claims, in contrast to the specific inclusion of claims for personal injury, property damage, and business interruption losses. Moreover, courts may be reluctant to find implied immunization against patent rights absent clear statutory language to that effect.  Notably, in other statutory contexts where Congress has intended to limit the enforceability of patents, it has done so expressly. For example, 28 U.S.C. § 1498 provides that when a patented invention is used or manufactured by or for the United States, the patent owner’s sole remedy is an action against the government in the Court of Federal Claims. The statute specifies that this applies to use or manufacture “by a contractor, a subcontractor, or any person, firm, or corporation” acting for the government and with its authorization or consent.

The existence of an explicit government contractor immunity provision in § 1498 arguably weighs against finding a similar but implicit immunity in the PREP Act. Whereas § 1498 specifically addresses the interaction between government procurement and patent infringement remedies, the PREP Act is focused more generally on various tort and contract claims arising from public health emergency response efforts. Additionally, the types of losses enumerated in the PREP Act (personal, property, and business interruption losses) are conceptually distinct from the harms associated with patent infringement, which primarily involve lost profits and reasonable royalties owed to the patent owner. Ultimately, given the lack of clear language addressing patent claims and the presumption against implied repeals of patent rights, there are valid reasons to question whether courts would or should interpret the PREP Act’s immunity as extending to patent infringement liability, notwithstanding the broad “any claim for loss” language in the statute.

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The district court case has been stayed for the duration of this appeal. Meanwhile former Chief Judge Levy who was handling the case recently moved to senior status with a reduced caseload. Judge John Woodcock is now the presiding judge.

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Judge Stark wrote the court’s opinion, joined by Judges Cunningham and Bryson.

Boston lawyer Michael Newman (Mintz) argued for the patentee Copan and was joined in the brief by Peter Cuomo, Andrew DeVoogd, Courtney Patrice Herndon, and James Wodarski.

DC Lawyer James Hulme (ArentFox) argued for the defendants-appellants and was joined on the brief by Taniel Anderson, Janine Carlan, Kevin Pinkney, and Michael Scarpati.

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Although each of the patents listed above have some differences, the inventions all generally relate to improved flocked swab designs for collecting biological specimens. US9173779 claims a swab with a tip covered in a layer of fibers applied through flocking, a technique that uses an electrostatic field to deposit fibers perpendicularly onto the tip’s surface. This flocked layer is designed to be hydrophilic, allowing it to absorb and later release a higher volume of specimen—up to 90% compared to traditional swabs, which only release about 40%. The flocked fibers create a uniform and less bulky tip, reducing discomfort during specimen collection, especially in sensitive areas.  The patent mentions the urethra and eyes, but most of us have tried it up the nose.

1. A biological specimen collection swab configured for collecting biological specimen to be analyzed, the swab comprising:

a rod terminating in a tip; and

a layer of fibers disposed on a surface of said tip by flocking with a flocking technique in which the fibers were deposited, in an electrostatic field, in an ordered manner perpendicularly to the surface of the tip of the rod, said layer of fibers having a thickness of 0.6 to 3 mm and being configured to be capable of absorbing a quantity of 40 μl of liquid specimen on said tip of the rod by capillarity.