There has been much concern recently about how intellectual property rights might impact access to COVID vaccines across the globe.

The US has just come out in favour of a proposed waiver of IP rights, which has been a very significant change of policy.  The Director-General of the World Trade Organization (WTO) has also emphasised the need to address equitable access to vaccines.

Yet, in response to the waiver proposal, the UK Government has stated that “A waiver to the IP rights set out in the TRIPS Agreement is an extreme measure to address an unproven problem. The UK is of the view that pursuing the proposed path would be counterproductive and would undermine a regime that offers solutions to the issues at hand.”

To explore the difference in these positions, we will explore some of the facts behind the headlines.

What’s the background?

When one considers patent laws around the world, there is in fact a great deal of harmonisation in terms of the basic definitions and character of patents and other IP rights. This is because of an agreement made between the 164 members of the Word Trade Organization (WTO) relating to IP, called the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS.

The TRIPS Agreement defines a set of minimum protections which member states must provide in their intellectual property systems.  If a member state does not provide these minimum protections, then it can be open to having action taken against it by other member states, as being a breach of WTO trade agreements.

The TRIPS waiver proposal (see the original here) was initially submitted by South Africa and India in October 2020.  It asks that:

“The obligations of Members to implement or apply Sections 1, 4, 5 and 7 of  Part II of the TRIPS  Agreement  or  to  enforce  these  Sections  under  Part  III  of  the  TRIPS  Agreement,  shall  be waived in  relation  to  prevention,  containment  or  treatment  of COVID-19,  for  [X]  years  from  the decision of the General Council.”

These sections of the TRIPS Agreement (full text here) define various basic requirements for copyright, designs, patents and trade secrets.

If these parts are waived, then there would be no obligation for the member states to provide the relevant intellectual property protection.   Individual WTO members could choose to waive IP rights and would not need to be worried about having action taken against them by other WTO members.

A revised version of the proposal will be discussed in a later WTO meeting.  So, the precise terms of the waiver are still to be negotiated and agreed at a later date.

The Implications

It is a matter of fundamental justice and fairness that access to COVID vaccines is universal, and that corporate greed does not prevent any country from being able to provide the health care that is needed. The world economy needs to come together and make sure that this happens.

However, it is not clear that these IP waivers would in fact achieve this purpose, and they could also have further unintended consequences.

Before considering IP, fundamental logistical issues such as increasing manufacturing capacity, supply of raw materials and improving the supply chain.  There are also some other voluntary licensing schemes for IP.  In addition, some key vaccine makers have already committed to not enforce their relevant patents during the pandemic (see Moderna for an example).

As regards patents in general, there is already a process called compulsory licensing.  The WTO has an informative FAQ on this issue here. In an emergency, this mechanism can be used by governments to force patent holders to license their patents, at rates which are determined as fair by the government. This system is designed to prevent abuse of the patent system and is surely designed for situations like this.

The possibility for trade secret protection to be waived could also have a wide ranging impact. The relevant section to be waived includes specific provisions for protection of data submitted to governments for approval of pharmaceuticals against unfair commercial use.

Businesses need strong IP protection to incentivise innovation, in particular in the pharma sector where the R&D costs are massive.  There are of course many examples of pharma companies being abusive in their pricing, but removing IP protection in such a broad way will have an impact beyond the current crisis that will reduce incentives to innovate.

It sounds intuitive that giving up IP rights is the right thing to do. However, the specific measures being proposed could have unintended consequences for the IP system and the stimulus to innovation that it provides.  We will be watching developments at the WTO with interest.

 

 

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