INTELLECTUAL PROPERTY RIGHTS & COVID-19

INTELLECTUAL PROPERTY RIGHTS & COVID-19: SHORTCOMINGS OF THE CURRENT LEGAL FRAMEWORK IN ENSURING EQUITABLE ACCESS TO VACCINES FOR ALL.

The Paper is written by Vishrut Srivastava a first-year BA. LLB. (Hons.) student of the National University of Juridical Sciences, Kolkata. This Article goes into detail on the various clauses contained in the original WTO agreement as well as the original TRIPS agreement and outlays the issues present in those clauses and their inability to actually ensure that a waiver would be beneficial.

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Table of Contents

INTRODUCTION

When the world first came to know about Covid-19 in late December of 2019, no one could have predicted that more than two years later, the disease-causing virus would still be wreaking havoc in our lives. When the pain and suffering seemed to have no end in the past year, the development and introduction of highly-effective vaccines had the potential to be the lights at the end of a very long and winding tunnel.

While the vaccines have helped restore relative normalcy in the developed, affluent countries, the rest of the countries have been left to fend for themselves[1]. Several countries have hoarded vaccines, while most underdeveloped and developing countries face shortages. This disparity has led to a discussion on the question of whether an Intellectual Property patent waiver should be granted by the World Trade Organisation (hereafter referred to as WTO) for techniques relating to Covid-19 vaccine production since these vaccines are protected by the Trade-Related Intellectual Property Rights Agreement (TRIPS).

While most of the discussions surrounding an IP waiver have focused on economic issues, the crucial legal issues have received little attention. The extent of the waiver, the amount to be paid to the patent holders, the procedures for licensing- these important questions remain unanswered. The current legal framework is inadequate and lacks necessary flexibility.

WHAT WOULD BE THE EFFECT OF A WAIVER?

Before jumping onto the legal basis of an IP rights waiver, it is first necessary to understand what effect such a waiver would have on the status quo.

The member countries of the WTO will not be obliged to apply, enforce and impose IP rights in relation to drugs and vaccines for Covid-19.
A waiver would shield governments of those nations that grant a compulsory license which allows anyone to manufacture a product protected by a patent, without getting the approval of the original patent holder[2] against a lawsuit by the WTO members and patent holders.
In theory, following a grant of compulsory licenses, the number of producers of the vaccines would increase, increasing the speed and the number of vaccines produced.
This increase in the number of vaccines produced would help in ensuring a more equitable supply of vaccines, allowing access to vaccines to populations of low-income, underdeveloped and developing countries.

LEGAL BASIS & PROCEDURE FOR WAIVING IP RIGHTS

WTO was established by an agreement known as the “Marrakesh Agreement”, signed in the city of Marrakesh, Morocco, on the 15^th of April, 1994. This agreement forms the legal basis for a waiver of IP rights relating to Covid-19 vaccines.

Article IX.3 of the agreement states:

“In exceptional circumstances, the Ministerial Conference may decide to waive an obligation imposed on a Member by this Agreement or any of the Multilateral Trade Agreements, provided that any such decision shall be taken by three-fourths of the Members unless otherwise provided for in this paragraph.” [3]

The meaning of the term “exceptional circumstances” as per Article IX.3 has not been specified in the agreement- highlighting that the authority to waive specific requirements is intended to legalise steps taken by a nation in specific times of emergency that otherwise would be in violation of WTO rules.[4] Such a waiver can be granted to an individual member as well as a group of member nations.

As per Article IX.3(b),

“A request for a waiver concerning the Multilateral Trade Agreements in Annexes 1A or 1B or 1C and their annexes shall be submitted initially to the Council for Trade in Goods, the Council for Trade in Services or the Council for TRIPS, respectively[5]…”

For waivers relating to vaccines, the relevant annexure is Annex 1C of the WTO Agreement, which consists of the Trade-Related Intellectual Property Rights Agreement (TRIPS) (hereby referred to as TRIPS Agreement).

Following Article IX.3(b), to obtain a waiver of IP rights, a request is needed to be submitted to the TRIPS Council, which has the time of 90 days to consider the request and submit its recommendations to the Ministerial Conference. Since the General Council concerns itself with all affairs related to the WTO on behalf of the Ministerial Conference[6], the recommendations are needed to be approved by all the members of the WTO.

It can also be adopted with the support of only three-fourths of the members also. In that case, however, the waiver would only apply to those countries that affirmed the resolution, allowing non-assenting nations to bring a suit against any country which waives IP rights.

As per Article IX.4, any decision for a waiver approved by the Ministerial Conference will need to specify and state the “exceptional circumstances” in justification of the decision, the terms of service controlling the waiver, and the date of termination of the waiver.[7] In case the time period of the waiver is greater than one year, the Ministerial Conference shall review the waiver within a year from that date that it is granted, following which its term can be extended, terms of service may be amended, or it may be terminated altogether.[8] It will continue to do so until the eventual termination of the waiver.[9]

Article 31 of TRIPS provides for compulsory licencing and governmental utilisation of a patent without the owner’s consent, subject to a variety of limitations designed to preserve the patent holder’s interests.[10]

SHORTCOMINGS OF THE CURRENT FRAMEWORK

For a Covid-19 vaccine patent waiver, TRIPS presents 4 primary issues related to law: the covered IP components, licencing method, imports, and compensation.

If the scope of the waiver is limited to only vaccine patents, it would be of no use since software, the method of designing the product, as well as production technologies are essential for producing vaccines successfully. As a result, it would be needed to seek a waiver under different sections of the TRIPS Agreement, making it hard for the members to reach a consensus

Article 31 of TRIPS further restricts the waiver’s extent, requiring generic producers to first seek a voluntary licence (i.e., authorization from patent holders) and that the compensation payable to the patent holder represents the economic value of the revenue that is lost.[11] Voluntary licenses are not ideal, as all the important decisions as to the distribution and sales of drugs are controlled by the patent holder.[12]

Article 31(f) disbars countries from exporting domestically produced generic drugs that do so under compulsory licenses.[13] Article 31(h) of TRIPS also states that patent holders be paid “adequate remuneration”, but the issue of deciding what is “adequate” has been left for the courts of the member nations.[14]

The problems caused by Articles 31(f) and 31(h) were acknowledged by the WTO in 2001, in paragraph 6 of the Doha Declaration on TRIPS and Public Health.[15] Subsequently, the General Council of the WTO adopted “The Implementation of The Doha Declarations Paragraph 6” in 2003, waiving the obligations under these articles, allowing countries to export drugs manufactured under compulsory licenses. The fact such an action was needed shows that the current system is not equipped to handle vaccine shortages.

The 2003 decision shifted all the liability from the countries that did not have the capacity to manufacture drugs to those that did. In addition to this, it became the duty of the supplier country, i.e., the country that issued the compulsory license to ensure that all the exported medicines reach the intended country. Only a pre-approved number of drugs and vaccines can be exported, which should be easily identifiable, and information about the product must be submitted to WTO’s TRIPS Council by the producing country. This entire process is too cumbersome, and in the context of the pandemic where swift action is needed, will likely cause significant delays. These limitations, and the lack of protection against lawsuits discourage generic drug producers from manufacturing drugs under compulsory licencing for export. The governments do not want to take a risk as well considering they might be liable to foreign nations and entities, reducing the scope of compulsory licensing.

The most problematic part of the TRIPS Agreement remains to be addressed. If the General Council approves a waiver request without consensus (only with 3/4^th majority), there is no obligation on the dissenting nations to honour the waiver. This may lead to serious legal implications. For instance, if India is amongst the 3/4^th members assenting to the waiver and it issues compulsory licenses for the manufacture of the Pfizer vaccine (US-developed), and if the United States is amongst the dissenting members, it can pursue legal action against India. This will actively discourage nations from issuing compulsory licenses, in case a full majority is not reached, achieving which on an issue as contentious as this will prove to be very difficult.

CONCLUSION

For almost two years now, the main focus of the world has been on eradicating the pandemic. The best, and only way to achieve this goal is the inoculation of people all across the world, as fast as possible. The gigantic demand for vaccines, when the global supply chains have been disrupted, combined with the developed countries practising vaccine nationalism has led to the inequitable distribution of vaccines, underdeveloped nations being the worst-off. There is a need to ramp up vaccine production to ensure equitable access to vaccines for all. While an IP waiver cannot alone solve this problem, it will be a significant step in the right direction.

However, there is a need for significant change in the existing legal framework. In the current system, generic manufacturers need authority from patent holders, exports need to be managed intricately. Governments cannot issue compulsory licenses for manufacturing without the threat of legal action from other nations and have to take sole liability for drug exports. These problems will act as roadblocks and cause delays, making it exceedingly difficult to ensure equitable access to vaccines, with novel COVID-19 variants appearing and booster doses potentially being essential.

It is clear, therefore, that there is a need for a complete overhaul of the way IP laws are applied globally. There is a need to act promptly and decisively to save lives of people, and be prepared for future crises.

BIBLIOGRAPHY

TREATIES AND AGREEMENTS:

General Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS, April 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994).

WTO Agreement, Marrakesh Agreement Establishing the World Trade Organization, April 15, 1994, 1867 U.N.T.S. 154, 33 I.L.M. 1144 (1994).

World Trade Organization, Ministerial Declaration of 14 November 2001, WTO Doc. WT/MIN(01)/DEC/1, 41 ILM 746 (2002)

World Trade Organization General Council, Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health, World Trade Organization (2003)

ONLINE MATERIALS

Aanchal Magazine, Prabha Raghavan, Explained: Intellectual property waiver for Covid-19 vaccines, May 11, 2021, The Indian Express, available at https://indianexpress.com/article/explained/explained-ip-waiver-for-covid-vaccines-7304992/ (Last visited on January 06, 2021)

A patent waiver on COVID vaccines is right and fair, May 25, 2021, Nature, available at https://www.nature.com/articles/d41586-021-01242-1 (Last visited on January 06, 2021)

Chris Kay, Haslinda Amin, Vaccine Nationalism Threatens WHO’s 2021 Goal of 2 Billion Doses, March 17, 2021, Bloomberg Quint, available at https://www.bloombergquint.com/coronavirus-outbreak/vaccine-nationalism-threatens-who-s-2021-goal-of-2-billion-doses (Last visited on January 05, 2021).

Khurana And Khurana, India: IP Waiver And Covid-19 Vaccines, November 19, 2021, Mondaq, available at https://www.mondaq.com/india/trade-secrets/1133136/ip-waiver-and-covid-19-vaccines- (Last visited on January 06, 2021)

Siva Thambisetty, Vaccines and patents: how self-interest and artificial scarcity weaken human solidarity, February 09, 2021, LSE British Politics and Policy, available at https://blogs.lse.ac.uk/politicsandpolicy/vaccines-and-patents/ (Last visited on January 05, 2021).

Tracking covid-19 excess deaths across countries, January 03, 2021, The Economist, available at https://www.economist.com/graphic-detail/coronavirus-excess-deaths-tracker (Last visited on January 05, 2021).

Zac Narimanian, COVID-19 and Intellectual Property Rights: The Promises and Limitations of a WTO Vaccine Intellectual Property Waiver, August 22, 2021, Columbia Undergraduate Law Review, available at https://www.culawreview.org/journal/covid-19-and-intellectual-property-rights-the-promises-and-limitations-of-a-wto-vaccine-intellectual-property-waiver (Last visited on January 06, 2021).

[1] Tracking covid-19 excess deaths across countries, January 03, 2021, The Economist, available at https://www.economist.com/graphic-detail/coronavirus-excess-deaths-tracker (Last visited on January 05, 2021).

[2] General Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS, April 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994).

[3] WTO Agreement, Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154, 33 I.L.M. 1144 (1994).

[4] WTO Agreement, Marrakesh Agreement Establishing the World Trade Organization, April 15, 1994, 1867 U.N.T.S. 154, 33 I.L.M. 1144 (1994).

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] General Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS, April 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994).

[11] Id.

[12] Siva Thambisetty, Vaccines and patents: how self-interest and artificial scarcity weaken human solidarity, February 09, 2021, LSE British Politics and Policy, available at https://blogs.lse.ac.uk/politicsandpolicy/vaccines-and-patents/ (Last visited on January 05, 2021).

[13] General Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS, April 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994).

[14] Zac Narimanian, COVID-19 and Intellectual Property Rights: The Promises and Limitations of a WTO Vaccine Intellectual Property Waiver, August 22, 2021,Columbia Undergraduate Law Review, available at https://www.culawreview.org/journal/covid-19-and-intellectual-property-rights-the-promises-and-limitations-of-a-wto-vaccine-intellectual-property-waiver (Last visited on January 06, 2021).

[15] World Trade Organization, Ministerial Declaration of 14 November 2001, WTO Doc. WT/MIN(01)/DEC/1, 41 ILM 746 (2002)