People or Patents? The COVID-19 IP Waiver & Property Rights During a Pandemic
Is the tension between IP holders and countries in need of COVID vaccines really a zero-sum game? A new agreement offers a possible solution that gets vaccines to the countries that need them while still protecting pharma companies’ property rights.
Photo: Pexels / Anna Schvets
By: Arjun Padmanabhan
On June 24, 2021, the World Health Organization (“WHO”), World Trade Organization (“WTO”), and World Intellectual Property Organization (“WIPO”) announced a “WHO-WIPO-WTO Trilateral Cooperation” agreement to ensure equitable access to COVID-19 technology. The plan builds upon the existing international framework by creating workshops that increase the flow of COVID-19 related technologies and by creating a joint platform for technical assistance to allow countries to properly leverage that technology.
The announcement came in the wake of a surge in international interest in a “vaccine-related intellectual property waiver” to the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”). Originally proposed by South Africa and India in October 2020, the intellectual property (“IP”) waiver deviates from long-held policy stances by temporarily removing TRIPS protections from IP related to COVID-19 vaccines. It would allow smaller pharmaceutical companies and vaccine manufacturers to leverage technology previously developed by pharmaceutical giants like Moderna, Pfizer, and Johnson & Johnson without fear of injunction.
Unsurprisingly, countries with strong property rights regimes like the U.S. have historically opposed attempts to abrogate patent rights through waivers and compulsory licensing provisions. Opponents of such waivers see them as a hindrance to future innovation and a deterrent to future development.
The U.S. sharply reversed its policy on May 5, 2021, when it announced its support for the waiver. Other longtime waiver opponents including the WHO, European Parliament, France, and Japan announced their support shortly after.
So what changed?
A New Take on an Old Waiver
The prospect of an IP waiver received renewed attention when India and South Africa, along with a host of other nations, presented the WTO with a revised waiver on May 25, 2021. One major change between the original and the amended waiver is that the amended waiver altered the effective duration and made it far more appealing to waiver opponents.
The original waiver proposed waiving IP rights “until widespread vaccination is in place globally, and the majority of the world’s population has developed immunity.” This language understandably caused consternation among rights-holders because no one knew how long it would take to satisfy the waiver’s termination condition. Suspending IP rights indefinitely was almost unthinkable in countries with strong property rights regimes.
The updated waiver presented skeptics with a far more palatable and definite effective duration of “at least three years from the date of [its implementation]” barring any exceptional circumstances which would demand an extended duration. The new termination clause coupled with mounting global political pressure made the revised waiver an easier sell to many nations and organizations that had previously rejected the proposition.
The European Union Alternative Proposal
Unsurprisingly, the European Union, whose member states house pharmaceutical giants like Merck in Germany and Sanofi in France, has opposed relinquishing any IP rights. In June 2021, the EU proposed an alternative to the IP waiver that addressed access to COVID-19 treatments in countries suffering from shortages. The EU proposal suggested improvements in three respects:
improving international supply chains for vaccine raw materials;
increasing government support for vaccine manufacturers and using governmental influence to negotiate better deals for vaccine components; and
encouraging voluntary licenses for vaccine IP and implementing compulsory licenses based on TRIPS Article 31 if necessary.
Each of these suggestions targets a major issue affecting vaccine development and distribution. Countries including the U.S. have recently addressed the first two, however the third point presents the most problems.
When considering the costs of vaccine research and development, pharmaceutical companies often have no incentive to voluntarily license their IP. These companies also have enough power and influence to stifle efforts to invoke TRIPS compulsory licensing provisions against them.
Tripartite Information Exchange Workshops
The WHO-WIPO-WTO Trilateral Cooperation plan sought to address that third point from a new angle and presented two initiatives to increase IP collaboration. The first initiative forms “capacity-building workshops to enhance the flow of updated information on current developments in the pandemic.”
These workshops would facilitate an information exchange among interested parties. The first workshop, which is to take place in September 2021, will focus on technology transfer and licensing.
Information exchanges have proven to be vital to tackling this pandemic. In early 2020, Chinese researchers publicly shared COVID-19’s complete genome, which, while considered late by many health experts including the WHO, still significantly accelerated the global vaccine race.
Early international collaboration in sharing the virus’s genome sequence allowed pharmaceutical companies to begin human trials with vaccine candidates in early October 2020. By comparison, during a similar outbreak in 2003, American scientists took twenty months to genetically sequence the virus and begin human trials.
The key to a strong global response to a virus like COVID-19 is a concerted and continuous information exchange. All related institutions should be involved and should share any information relevant to combating the spread. Relenting on international collaboration in any part of the world can lead to a resurgence, and more importantly, can lead to variants formed from mutations of the original virus.
Variants like the more contagious and deadlier Delta Variant from India need new genome sequencing analyses and may render vaccines for previous variants partially or wholly ineffective.
Unfortunately, information exchanges often involve IP, which has caused problems when global health needs have clashed with IP rights.
International IP Sharing Platforms
The new plan tried to resolve this issue by creating an internationally accessible platform for leveraging shared COVID-19 technology. The platform is intended to be a “one-stop shop that will make available the full range of expertise on access, IP and trade matters provided by [the three] organizations, and other partners.”
At face value the platform seems much like other initiatives that organizations have undertaken over the past year known as patent pools. In fact, the WHO, in conjunction with several nations, launched the COVID-19 Technology Access Pool (“C-TAP”) in May 2020 to make health technologies effective against COVID-19 accessible to all.
The purpose of C-TAP, and other patent pools like the Open COVID Pledge is to encourage IP rights-holders to provide free licenses to their COVID-19 technology for the duration of the pandemic.
Unfortunately, with little incentive for rights-holders to temporarily suspend their protections, it comes as no surprise that patent pools have thus far been relatively unsuccessful. Private pharmaceutical companies that have borne the brunt of the exorbitant R&D costs have resisted calls to license their IP for free. Instead, they have either opted to discount bulk-vaccine purchases by countries or partner with other pharmaceutical companies like the Serum Institute in India to roll out more affordable vaccines.
Upon closer review, while the proposed platform is purported to be a one-stop shop for IP expertise, there is no indication that it will provide IP or IP licenses to interested parties. Instead, it is intended to “provide timely and tailored technical assistance in making full use of all available options to access vaccines.”
What this technical assistance entails remains to be seen. The fact remains that accessing the IP itself is often an insurmountable challenge that many smaller developers and nations have faced during this pandemic. Patents and trade secrets protect the heart of many COVID-19 technologies, the lack of access to which would severely hinder independent development. Without a better way for those smaller entities to access the IP at an affordable price, the point of whether they need technical assistance is moot.
That said, technical assistance may be a tool that larger entities with vaccine manufacturing capabilities can harness to refine their technology and keep up with COVID-19 mutations. For example, Indian pharmaceutical companies that produce most of the world’s vaccines might benefit from technical assistance to sequence genomes and update their IP as new mutations are discovered.
Charting the Best Path Forward
The debate on how to balance IP-holders’ rights and global health needs has been one of the preeminent legal dilemmas since the pandemic began. Every side has an opinion on how to move forward, yet none so far have hit on a solution that governments, their citizens, and pharmaceutical companies can agree upon.
The IP waiver offers a generalized solution that will help vaccine development to the detriment of pharmaceutical companies that already invested billions of dollars in R&D. The EU’s proposal addresses some of the root causes hindering vaccine distribution. It falls short in suggesting implementing TRIPS compulsory licensing provisions—an option that has seen minimal use in Western countries since the TRIPS Agreement went into effect in 1995.
The framework of the Trilateral Cooperation plan might hold the key to IP collaboration during global health crises. Both initiatives presented in the plan have the potential to redefine international collaboration, provided they are properly implemented and expanded on.
Governments could consider incentivizing IP rights-holders to present their technology in workshops and upload their IP to the platform. Rights-holders would need guarantees that their rights would be protected after the pandemic. This option would be more mutually beneficial to all parties than the IP waiver or the EU’s proposal.
With newer and more virulent COVID-19 variants poised to become dominant strains across the world, the need for international collaboration to combat them is more critical now than ever. The next few months will determine the trajectory of the pandemic and global entities will have to determine whether people or patents should take priority. Until they do, the world can only watch with bated breath and hope that the end of the nightmare will soon be in sight.
Arjun Padmanabhan is a rising third-year student at Texas A&M University School of Law and an Articles Editor of the Texas A&M Law Review. His research and prior publication focus on compulsory licensing and international intellectual property regimes.