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The Prospects for an IP Waiver Under the TRIPS Agreement

By Duncan Matthews and Timo Minssen

The informal meeting of the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council today, July 6, 2021, focuses international attention once more on prospects for a waiver of the TRIPS Agreement in response to the COVID-19 pandemic.

Regardless of whether an actual TRIPS waiver ultimately comes to pass, the real significance of these efforts lies in the increased focus they have placed on the role of IP and trade secrets in improving access and affordability, and scaling-up of manufacturing and supply of vaccines and other health-related technologies. These conversations have introduced the possibility of a rethinking of the relationship between IP, innovation, conservation, and access.

The proposal for a TRIPS waiver, made initially by India and South Africa last October, was given additional impetus on May 5, 2021 when United States Trade Representative Katherine Tai announced that the U.S. supports a waiver for COVID-19 vaccines and will actively participate in text-based negotiations at the WTO to make that happen.

Since then India, South Africa, and their supporters issued revised draft text on May 25, 2021, which would waive (for an initial period of three years) IP on all relevant health products and technologies, including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture for the prevention, treatment or containment of COVID-19.

On June 4, 2021, the EU issued its own proposal, which focuses not on an IP waiver, but instead calls for limits on export restrictions, voluntary measures to encourage and support vaccine production and affordability, and the use of voluntary licenses as the most effective instrument to facilitate the expansion of production and sharing of expertise.

These proposals differ in the details, but share a common goal. They are both broad-based calls to find solutions to the complex question of how best to scale up manufacturing and supply, while improving access and affordability, in response to the COVID-19 pandemic.

Ultimately, however, the WTO is a member-driven institution, and agreement on a TRIPS waiver will require either consensus, or, if it were to go to a vote, a three-fourths majority in accordance with Article IX of the WTO Agreement. Currently, WTO members supporting the waiver simply don’t have the numbers to achieve this. About 123 WTO members would be needed if this went to a vote under Article IX of the WTO Agreement. Even optimistically, the current number of WTO members supporting the waiver is only half that total. In reality, when deciding on whether a consensus or majority approach will be sought, the Chair of the WTO General Council will have a great deal of discretion as to what will happen next. He will make that decision based on the information he receives from the Chair of the TRIPS Council, but there will be no vote taken at the TRIPS Council itself. Only the WTO Ministerial Conference (slated for November 30 – December 3 2021) can decide this. We do expect some sort of WTO Declaration on IP and COVID-19 to emerge by December 3, but whether this is anywhere close to current TRIPS waiver proposals remains to be seen. Watering down the current TRIPS waiver proposals to achieve a consensus or majority vote remains a very real possibility.

Meanwhile, the academic debate has crystallized around almost diametrically opposed pro-waiver and anti-waiver positions. Our view is that both positions have their merits and their drawbacks, but that, in reality, pro- and anti-waiver arguments are not binary.

Already, we have stressed this in our letter to the Financial Times, published on May 12, 2021, just days after the Biden Administration’s announcement of support for a waiver. We argue that debating IP waivers will fuel pandemic innovation (the original, unedited version of our letter is available here).

In our longer Financial Times opinion of June 17, 2021, we then called for greater transparency of ownership, licensing, and advance purchase agreements to inform a better understanding of the effects of IP during the pandemic response (the original, unedited version of our opinion is available here). As we state in the Financial Times, the COVID-19 response requires a toolkit of policies to ensure adequate vaccine manufacturing and delivery. The current focus on the role of IP can be part of that toolkit, and its interface with collaboration and knowledge transfer in responding to these challenges must be key components of that response.

Opinions differ on what long-term impact a potential IP waiver would have on pandemic responses and future innovation. There are also debates about whether it is the best tool to reach the necessary goals. Yet, it is understandable that the waiver is being considered as a possible approach for countries seeking to scale up manufacturing and supply and improve affordability.

However, regardless of whether a WTO waiver is ever achieved, it will not alone solve the access problem. More broadly, the debate about an IP waiver will focus attention on the ability for WTO members to apply pressure on the manufacturers of COVID-19 vaccines and related health care technologies. It will make clear that, while voluntary approaches are preferred, compulsory licenses, or even waiving IP remains the ultimate sanction if IP owners are not willing to transfer technology in order to scale up production, lower prices, and achieve more equitable distribution globally.

In many ways, the current focus on a TRIPS waiver is likely to create these pressure points, regardless of whether it realizes final agreement at the WTO Ministerial Conference. Attention is already focusing on rethinking manufacturing and improving supply chains, and this is likely to include: a greater willingness to engage in voluntarily licensing agreements, participation in technology access pools (C-TAP), greater transparency of Advance Purchase Agreements, greater transparency and sharing of regulatory data, mechanisms (including regulatory obligations and incentives) to increase transfer of tacit know-how, compulsory licensing, more inclusive and more comparable clinical trial designs, and greater recourse to competition law.

Ultimately, the world needs to find sustainable solutions to address not only the current crisis, but also to assist with future pandemic preparedness. These solutions may include, inter alia: (1) greater consideration of the role of regional manufacturing hubs, (e.g., the recent WHO announcement of support for the South African consortium to establish the first COVID mRNA vaccine technology transfer hub, which can assist with knowledge transfer to speed up manufacturing and supply), (2) collaboration between global organizations, such as the recent collaboration between the World Health Organization (WHO), World Intellectual Property Organization (WIPO), and WTO, (3) a WHO Pandemic Preparedness Treaty, and (4) a joint EU-U.S. COVID Manufacturing and Supply Chain Taskforce.

We recognize that some of these initiatives may not come to fruition, or may not contribute substantively to improved manufacturing, supply, and affordability, but they are steps in the right direction.

These steps are being taken not least because the TRIPS waiver proposal has focused attention on the role of IP during the pandemic. For this, the TRIPS waiver debate must be commended. Without it, the current debate would lack substantive focus. Going forward, practical solutions should focus on scaling up manufacturing and supply, and improving access and affordability, while maintaining the long-term objectives of the innovation system and contributing to future pandemic preparedness.

Timo Minssen

Timo Minssen is Professor of Law at the University of Copenhagen (UCPH) and the Founder and Managing Director of UCPH's Center for Advanced Studies in Biomedical Innovation Law (CeBIL). He is also affiliated with Lund University as a researcher in Quantum Law. His research concentrates on Intellectual Property, Competition & Regulatory Law with a special focus on new technologies in the pharma, life science & biotech sectors including biologics and biosimilars. His studies comprise a plethora of legal issues emerging in the lifecycle of biotechnological and medical products and processes - from the regulation of research and incentives for innovation to technology transfer and commercialization.

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