The EU proposed Covid waivers of certain TRIPS rules are mostly meaningless

Since October 2020, discussions have been ongoing at the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council about a waiver of certain obligations under the TRIPS Agreement for the duration of the Covid-19 pandemic. The waiver aims to take away IP barriers for would-be manufacturers of generic vaccines, therapeutics and other tools to fight the pandemic. The TRIPS waiver was proposed by South Africa and India and is now supported by the African Group, the Least Developed Country Group, and 19 other countries. The US has publicly endorsed a TRIPS waiver but for vaccines only, not for therapeutics or other health technologies needed to respond to the pandemic. 

The 12th WTO Ministerial Conference, taking place from 30 November to 3 December, is expected to take a decision on the waiver; until then, formal and informal discussions are taking place between WTO members.

Today, all eyes are on the EU because it has so far voiced the strongest opposition to the TRIPS waiver. At the core of the EU’s rejection of the TRIPS waiver has been the argument that the TRIPS agreement offers sufficient flexibility to deal with IP issues around access to pandemic health technologies. The EU in particular seems to embrace the use of compulsory licensing of patents. And takes the position that only some clarification and tweaking may be required.

A leaked EU proposal from 13 October, available on the Huffington Post website, gives some insight into what the EU has in mind. While in principle it is encouraging to see the EU take a more flexible position with regards to compulsory licensing, the document raises some red flags.

According to the EU document, their proposed ‘waiver’ is based on the Decision of 30 August 2003 on the implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (WT/L/540) which waived the requirement that compulsory licenses are worked predominantly for the supply of the domestic market. This waiver formed the basis for the one and only ever amendment of the TRIPS Agreement with article 31bis to enable the export of products produced under a specific compulsory license exclusively to address other countries’ needs. (we have written about this mechanism here and here.) 

Details of the EU proposal are as follows (in italics), with Medicines Law & Policy comments:

Product Scope :

Pharmaceutical products, i.e. vaccines, diagnostics, therapeutics against COVID-19 

The EU proposal focuses on TRIPS flexibilities. The document pays specific attention to improving the way compulsory licensing can be used. Compulsory licensing is a decision by a government or government authority to give others than the patent holder the right to make use of one or more patent (s)s without the consent of the patent holder. Neither the TRIPS Agreement nor the Doha Declaration contains any limitations with regard to disease scope or products.  

Scope of the waiver-TRIPS provisions covered: 

    • Article 31(b) – prior negotiations with rights holders – to be waived 

The TRIPS Agreement allows already for waiving of the requirement for prior negotiation “in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use (TRIPS 31 b.). No-one will contest that the Covid-19 pandemic presents a situation of national emergency or extreme urgency. This proposed waiver is therefore meaningless as it does not provide any additional rights to WTO members.

    • Article 31(f) – requirement to supply predominantly the domestic market – to be waived. 

Waiving this requirement was of course the very purpose of TRIPS article 31bis, which is a waiver to the requirement in article 31f  that a compulsory license should be predominantly for the supply of the domestic market. (Note this does not mean ‘only’ for the supply of the domestic market. Export of non-predominant parts of the supply has always been possible under TRIPS Article 31). Article 31bis however is a suboptimal solution that has only been used once since the mechanism was put in place in 2003. Therefore, a direct and automatic waiver of article 31(f) would indeed facilitate the use of compulsory licenses among WTO members. Alternatively, the EU could propose an interpretation of article 30 (which details exceptions to rights conferred by a patent) that would allow export of products as a straightforward exception. In the past the EC has indeed proposed a solution based on article 30. This proposal from 2002 is worth a read. The article 30 route was also the favourite solution of civil society organisations.

    • Article 31bis – mechanism for compulsory licenses for exports – to be waived, with conditions, e.g. on eligible importing Members, for discussion. 

This proposal is meaningless. The direct waiver of article 31 (f), in the previous paragraph, achieves this. Allowing export under an art 30 exception would have also been useful. See above.

    • Article 31(h) – remuneration – to be waived and replaced by specific rules on remuneration to support deliveries of the products at discounted prices. 

Article 31 (h) provides that “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization”. The level and procedure for remuneration are to be determined by the country that is issuing the CL. Several guidelines clarify what adequate remuneration should look like in order to increase access to essential health tools. It is unclear what a waiver would achieve with regard to Article 31(h). 

    • Article 28(1), 39 and Part III of the TRIPS Agreement – outside the scope of the waiver as the inclusion of these provisions is not required for the objective described above and would not be justified or proportionate. 

This paragraph covers the rights conferred by patents, the protection of undisclosed data and trade secrets and enforcement of intellectual property rights. All relevant in the pandemic context. Article 39.3 in particular would require a waiver for countries that have implemented it in the form of regulatory data exclusivity to ensure marketing authorisation can be granted to products supplied through a compulsory license.

Other aspects to be considered: 

    • Length: 3 years with a possibility of further extension if the General Council so decides (e.g. if the circumstances of the pandemic persist). 
    • Transparency: notification to the WTO of the measures taken and exports made.

Considering that investments into vaccine and other health tool production will likely be considerable, a measure that needs renewal after 3 years is likely to discourage such investments from the private sector. The waiver should therefore enable the continued production and supply of goods under compulsory license against the payment of adequate remuneration, even after the waiver terminates.

Transparency is a good thing, but given past references to political pressures, countries should be free to issue compulsory licenses without having to notify the WTO. 

In the context of these waiver discussions, it remains relevant to draw attention to the fact that WTO members may also invoke TRIPS article 73 (national security exceptions) to suspend the protection of intellectual property, specifically WTO members’ right to take any action which it considers necessary for the protection of its essential security interests. The South Centre published a useful research paper on the subject.

Obviously, these measures are likely not needed when companies engage with the WHO Covid-19 Technology Access Pool (C-TAP) established in May 2020. C-TAP’s aim is to ensure that knowledge, data and intellectual property are shared so that the diagnostics, therapeutics and vaccines needed to respond to the Covid-19 pandemic become available and accessible to all. 

Ellen 't Hoen
Ellen 't Hoen
Ellen ‘t Hoen, LLM PhD, is a lawyer and public health advocate with over 30 years of experience working on pharmaceutical and intellectual property policies.

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