The Patent Waiver Debate

Jane Lambert

There has been a passionate debate about the rôle of intellectual property ("IP") in producing and distributing vaccines against COVID 19 in low and mid-income countries. In a communication to the Council of TRIPS dated 2 Oct 2020 (IP/C/W/669), the Indian and South African governments proposed relaxing some of the treaty obligations that require countries to protect the intellectual assets of their own and other countries' nationals. As a citizen, I have my views on that issue but in this article, I write only as a lawyer who has spent the better part of a lifetime advising and representing businesses and individuals on IP.  

The Patent Waiver Proposal

The proposal had gathered support from the governments of other low and mid-income countries, the former President of the Republic of Ireland and Chair of the Elders, Mary Robinson and Baroness Chakrabarti. the former shadow Attorney-General. and from the non-governmental organization Médecins Sans Frontières, but it had been resisted by the governments of countries where most of the work on developing new vaccines has taken place. The following tweet from the US Trade Representative suggests that that may change

These extraordinary times and circumstances of call for extraordinary measures.

The US supports the waiver of IP protections on COVID-19 vaccines to help end the pandemic and we’ll actively participate in @WTO negotiations to make that happen. pic.twitter.com/96ERlboZS8

— Ambassador Katherine Tai (@AmbassadorTai) May 5, 2021

In order to appreciate the issues, it is necessary to understand the nature of intellectual property and the reason for intellectual property laws and the treaty obligation to enact them.

What is Intellectual Property?

Intellectual property is the collective name for the bundle of rights that protect investment in intellectual assets, that is to say, branding, design, technology and works of art and literature.  Those rights are intended to incentivize such activities as broadcasting, education, entertainment, publishing, scientific research and technical development.  IP rights ("IPR") are not the only way to incentivize those activities. In centrally planned economies like the former Soviet Union scientists, ballerinas and other IA creators were rewarded for their work with benefits such as foreign travel or better housing. IPR are essential to market economies that rely on consumers to choose the optimum products and services. It was the world's market economies that prevailed over the centrally planned ones in the cold war  Even states like China and Vietnam which have Communist governments have embraced market disciplines including comprehensive IP laws and prospered greatly as a result.

Policy

A common misconception is that IP law exists solely for the benefit of intellectual asset owners.  In fact, it seeks to strike a balance between their interests and those of consumers and industry.   Owners benefit from a temporary restriction on competition to enable them to recoup their investment and maybe a little bit extra. Consumers benefit from the development of new products and services and some assurance as to the origin and quality of a product or service.  Industry benefits from sharing in the asset owner's innovation or creativity after the restriction on competition ends.  In most instances, IPR are territorial in that they are granted for a country or territory or, occasionally, a group of countries or territories.

TRIPS

The importance of IP in facilitating trade and development was recognized in a series of multilateral trade talks that culminated in the formation of the World Trade Organization ("the WTO") known as the "Uruguay Round".  Consequently, the Agreement establishing the World Trade Organization ("the WTO Agreement") annexed the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") as Annex 1C.  Although the Paris and Berne Conventions had provided for the legal protection of the IA of other contracting parties' nationals on a reciprocal basis since 1883 and 1886 respectively, countries had not been obliged to enact IP legislation.  Some did not believing that discriminatory IP laws or no IP laws whatsoever could enable them to appropriate other countries' technology or publications.  All that changed with the WTO Agreement.  Access to the world's largest and richest markets and sources of credit and investment became conditional upon providing some minimum legal protection for intellectual assets.  

Outline of TRIPS

TRIPS consists of 73 articles divided into a preamble, 7 parts plus an annex and appendix:

Part I (arts 1 to 8) contains the general provisions of the agreement and its basic principles; 

Part II (arts 9 to art 40) on standards concerning the availability, scope and use of IPR:

• §1 (arts 9 to 14): copyright and related rights
• §2 (arts 15 to 21): trade marks
• §3 (arts 22 to 24): geographical indications
• §4 (arts 25 to 26): industrial designs
• §5 (arts 27 to 34): patents
• §6 (arts 35 to 38): layout-designs (topographies) of integrated circuits
• §7 (art 39): undisclosed information, and
• §8 (art 40): control of anti-competitive practices in contractual licences;

Part III (arts 41 to art 61 ) on enforcement of IPR:

• §1 (art 41): general obligations
• §2 (arts 42 to 49): civil and administrative procedures and remedies)
• §3 (art 50) provisional measures
• §4 (arts 51 to 60): special requirements related to border measures, and
• §5 (art 61): criminal measures;

Part IV (art 62) on acquisition and maintenance of intellectual property rights and related inter-partes procedures;

Part V (arts 63 and 64) on dispute resolution;

Part VI (arts 65 to 67) on transitional arrangements; and

Part VII (arts 68 to 73) on institutional provisions and final arrangements.

The Indian and South African Draft

The Indian and South African governments asked the Council of TRIPS to recommend to the General Council of the World Trade Organization a waiver from the implementation, application and enforcement of Sections 1, 4, 5, and 7 of Part II of the TRIPS Agreement in relation to prevention, containment or treatment of COVID-19.  Section 1 of Part II of TRIPS requires WTO member states to protect literary and artistic works from copying,  Section 2 to protect industrial designs, Section 5 patents and Section 7 undisclosed information including obligations of confidence. Paragraph 1 of the draft decision provides for the waiver to remain in force for an unspecified number of years from the decision of the General Council through paragraph 4 requires a review of the decision not later than a year from its adoption.   

Evidence in Support of the Proposal 

According to paragraph 9 of the communication:

"There are several reports about intellectual property rights hindering or potentially hindering timely provisioning of affordable medical products to the patients."

They turn out to be a report by Susan Decker and Christopher Yasiejko that "World War II-Style Mobilization Order May Carry Risks" (20 March 2020, 17:30 GMT Updated on 23 March 2020, 17:00 GMT Bloomberg) and a report by Morgan Watkins in the Louisville Courier Journal entitled "Kentucky Gov. Andy Beshear calls on 3M to release patent for N95 respirator amid pandemic".

The Response

The pharmaceutical industry responded in a press release daed 8 Dec 2020 (see the International Federation of Manufacturers and Associations ("IFPMA")  2020 Pharma delivers COVID-19 solutions, but calls for the dilution of intellectual property rights are counterproductive).   Both the Organisation of Pharmaceutical Producers of India and Innovative Pharmaceutical Association South Africa are members of IFPMA as are the biotech and pharmaceutical industry trade associations of other African, Asian and Latin American countries.  It would be members of those associations that might be expected to manufacture additional quantities of vaccines, medicines and medical devices.  None of them appeared to be campaigning for a relaxation of their own national IP laws or to be planning increases in production in the event of such relaxation. 

The Debate

  On 5 May 2021, the US Trade Representative Katherine Tai published the following statement:

"This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures. The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protectnes. We will actively participate in text-based negotiations at the World Trade Organization (WTO) needed to make that happen. Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved."

Thiar does not appear to be an unqualified acceptance of the Indian and South African proposal but an offer to negotiate as Ngozi Okonjo-Iweala, the Director-General of the WTO observed in her statement on the US Trade Representative's statement:

"As I told the General Council yesterday, we need to respond urgently to COVID-19 because the world is watching and people are dying. I am pleased that the proponents are preparing a revision to their proposal and I urge them to put this on the table as soon as possible so that text-based negotiations can commence. It is only by sitting down together that we will find a pragmatic way forward — acceptable to all members — which enhances developing countries’ access to vaccines while protecting and sustaining the research and innovation so vital to the production of these life-saving vaccines.”

Against this array of the great and the good, it must require some courage to express a contrary view. Joff Wild, the editor of IAM has risen above the parapet with his article, Get smarter about covid patents or pay the price  26 April 2021 Intellectual Asset Management.

Comment

It is undoubtedly in the interests as well as the moral duty of everybody in the world to accelerate as much as possible the manufacture and distribution of vaccines, medicines and medical devices to those who need them most.  Should that require a patent waiver (and the two press reports cited in the Indian and South African communication are thin to the point of emaciation) then so be it.  But such a waicer will come at a price.  The innovation that brought the world a portfolio of effective vaccines in little more than a year will be disincentivized.  The public will be exposed to a greater risk of counterfeit vaccines and medicines.   The viability of some businesses, particularly the SME that create new diagnostic tools or medical devices, will be threatened.   

Further Information

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