Conquering Covid in Korea with Italian Patent Loophole

Summary

Swab tests were crucial in the fight against Covid-19 before vaccines became widely available. Copan, an Italian company, has dominated the swab market since securing a patent in 2004. However, due to a patent loophole, South Korea and the UAE were able to produce and export swabs without restrictions.

EPISODE

Looking back at the Covid-19 pandemic three years ago, South Korea’s rapid and extensive swab testing was a highlight. In March 2020, U.S. politician Carolyn B. Maloney remarked, “South Korea can test more people in one day than we tested over the past two months.” This achievement was facilitated by an Italian patent loophole.

Figure 1. Copan Diagnostics ESwab Product (Image Source: fishersci.com)

The humble swab hides complex patented technology, with its tip made of hydrophilic fibers in a feather-like arrangement. Copan patented this ‘swab for collecting biological samples’ in 2004, using an electrostatic flocking process that enhances liquid sample collection. At the onset of the pandemic, Italy temporarily prohibited the export of these swabs.

Figure 2. Copan’s Flocking Process (Image Source: copanusa.com)

Despite securing patents in major markets like the US, Japan, Europe, Australia, and New Zealand, Copan did not file for patents in South Korea or the UAE, considering these markets too small.

As a result, South Korean SMEs could freely produce and export swabs to the UAE. When the global demand for swabs surged, Copan focused on supplying Italy, halting exports to other countries.

THE ART OF STRATEGIC PATENT SELECTION

Companies often skip PCT applications in certain countries due to strategic and financial considerations. Filing patents internationally through the PCT can be costly, with high initial filing fees, maintenance costs, and translation expenses. Businesses prioritize countries with large markets or significant demand, where the expected revenue justifies these costs.

In smaller or less demamding markets, companies may choose to forgo patenting. This could also be due to low perceived competition, making it unnecessary to protect their technology. Additionally, local barriers like high manufacturing or distribution costs can deter companies from patenting in specific regions.

For Copan, skipping South Korea and the UAE likely reflected an underestimation of market potential or competition. This case highlights the importance of strategic market research and planning when deciding where to protect intellectual property.