The draft text of the World Health Organization pandemic accord reaffirms countries’ rights to use to the full the flexibilities contained in the World Trade Organization TRIPS Agreement and the Doha Declaration on TRIPS and Public Health. However, in reality, countries that do use TRIPS flexibilities encounter complaints and pressure from the European Union and other countries (such as the United States) not to use them to their full extent.
It is, therefore, no surprise that countries are seeking additional assurances in the pandemic accord, which is in its final days of negotiations before it is meant to go to the World Health Assembly. In March, a group of developing countries proposed the following wording:
4bis. The Parties shall not challenge, or otherwise exercise any direct or indirect pressure on the Parties that undermine the right of WTO Members to use TRIPS flexibilities at any multilateral, regional, bilateral, judicial or diplomatic forum.
This provision was quickly nicknamed “the peace clause”. We commented at the time: The proposed peace clause in the pandemic accord in fact echoes the basic principle of the WTO TRIPS Agreement Article 1.1 which specifies that countries are not obliged to adopt TRIPS-plus measures and “shall be free to determine the appropriate method of implementing the provisions of this Agreement [TRIPS] within their own legal system and practice”. In other words, the proposed peace clause is a welcome reminder of this basic principle, certainly in the context of pandemics.
However, the EU remains opposed to the peace clause, presumably because it draws attention to their pursuit of TRIPS-plus laws and policies in third countries.
Here are some examples of EU trade policies and actions:
The European Commission’s Report on Intellectual Property Rights in Third Countries
Since 2018, the European Commission has published a report on intellectual property rights in third countries, analogous to the United States’ annual “Special 301” report, which is often used to pressure countries seen as offering insufficient protection for intellectual property rights.
While the DG Trade press release announcing the 2023 report primarily focuses on counterfeit products, the report contains complaints about countries’ national IP laws, even when those comply with the WTO TRIPS Agreement. Such laws may still not be to the liking of the European Commission and European companies. Here are a few examples the report lists:
Restrictive patentability criteria applied in Argentina, India and Indonesia reduce or remove incentives to innovate, for instance in order to find more stable forms of compounds with longer shelf-lives, medicines which may be easier to store, dosages which are safer or reduce side-effects.
Another area of continued concern reported by rightholders is the system for protecting undisclosed test and other data generated to obtain a marketing approval for pharmaceuticals in Argentina, Brazil, China, India, Indonesia, Malaysia and Saudi Arabia, and for agrochemical products in Argentina, Malaysia and Türkiye.
The EU highlights TRIPS-compliant laws as problematic because one of the EU’s objectives of its international trade policy is to seek higher levels of IP protection than the TRIPS Agreement requires and in trade agreements “to ensure that both trade partners hold the same intellectual property protection standards”. For details see the European Commission here.
Prior IPR Surveys have contained more wide-rangingsimilar complaints, in particular on use of compulsory licences. For example, the 2020 survey notes:
… stakeholders report that very broad, vague and arbitrary criteria are applied for granting compulsory licences, which undermine the effective patent protection in Ecuador, India, Indonesia and Turkey, notably for pharmaceuticals and chemicals but also for other sectors where local production is being promoted. Another serious concern for the industry is the interference of the health authority in Brazil and of the competition authority in Russia in pharmaceutical patent protection. Another area of continued concern reported by right holders is the absence of an effective system for protecting undisclosed test and other data generated to obtain a marketing approval for pharmaceuticals and plant protection products. This problem affects the European industry mainly in Argentina, Brazil, China, India, Indonesia, Malaysia, Russia, Saudi Arabia, Ukraine and the United Arab Emirates.
Under TRIPS, as further reiterated in the Doha Declaration, governments have the right to determine the grounds and circumstances for issuing compulsory licences. Further, TRIPS does not require test data exclusivity, which is how the EU protects test data.
When the Commission announced the trade report for the first time in 2018, civil society organisations raised concerns about certain targets in a letter to the Commission. In particular, the Commission’s report singled out countries that used TRIPS flexibilities such as compulsory licensing.
The same pressure for TRIPS-plus standards continues today, for example, in the negotiations between the EU and India, and between the EU and Indonesia. These prompted criticism by Ban Ki-Moon (8th U.N. secretary-general) and Winnie Byanyima is the executive director of UNAIDS) in a 2023 article.
Similarly, a letter from a broad range of organisations called for the dropping of TRIPS-plus demands on Indonesia. The letter states that “In TRIPS Council discussions, the EU claims to support the use of TRIPS flexibilities and yet IP proposals of the EU in the CEPA negotiations aims to extend IP monopolies and undermine TRIPS flexibilities”. The letter refers to a 2021 European Parliament Resolution which states that: “…the Doha Declaration on the TRIPS Agreement and Public Health affirms the right of developing countries to make full use of the flexibility provisions in the TRIPS Agreement to protect public health and, in particular, provide access to medicines for all”.
The letter also refers to a 2007 European Parliament Resolution which had called on “the Council to meet its commitments to the Doha Declaration and to restrict the Commission’s mandate so as to prevent it from negotiating pharmaceutical-related TRIPS-plus provisions affecting public health and access to medicines, such as data exclusivity, patent extensions and limitation on grounds of compulsory licences, within the framework of bilateral and regional agreements with developing countries.”
Below are a few examples concerning specific countries.
In 2007, the European Commission threatened Thailand with sanctions for its plans to issue a compulsory licence for Plavix after two years of failed price negotiations with the patent-holding company.
In 2021, the Brazilian Supreme Court ruled that automatically extending the term of a patent is unconstitutional. This decision was intended to stop a provision in Brazilian law that extended patent protection when the examination period for an innovation infringed on a mandatory 10-year period to enjoy a patent monopoly. Prior to making the decision, the South Centre reported that ambassadors of Belgium, Denmark, France, Japan, the UK, and Sweden warned Brazil that the move would be detrimental to industry and overall investment in the country.
Switzerland, while not a member of the EU, also pursues a policy of pressuring countries that use TRIPS Flexibilities. For example:
In 2015, Colombia publicised its intention to issue a compulsory licence for the cancer drug imatinib (Novartis’ Glivec) In response, sent a letter to Colombia’s Ministry of Health and Social Protection referring to the Novartis patent, asserting that compulsory licences are a “policy tool of last resort” that are “tantamount to an expropriation of the patent owner and constitutes a deterrent to future research and development of innovative medicines and their placing on the market in Colombia.” For details see: these articles from Knowledge Ecology International and Public Eye.
In 2008, when Thailand intended to issue a government-use licence for cancer drugs imatinib (Novartis Glivec), letrozole (Femara Novartis) and erlotinib (Tarceva, Roche) Again the Swiss government took action and sent an Aide-Mémoire to Thailand, insisting that compulsory licencing as a measure of last resort and threatening consequences for foreign direct investment in the field of pharmaceutical manufacturing should Thailand proceed with the CLs.
Conclusion
The examples above demonstrate that a general recognition of the TRIPS flexibilities in the pandemic accord being negotiated may not provide sufficient comfort. Developing countries are right in asking for a more substantial commitment to refrain from political pressures when they use the flexibilities in IP law and are consistent with their international obligations. The EU also took a hardline during the negotiations at the WTO on a temporary waiver of IP rights during the Covid-19 pandemic.
The EU may classify the cases described here as historical and claim that its policy has changed. It is true that the 2023 trade report did not target countries for using or planning to use compulsory licensing. And that is a welcome development. The EU is also in the process of adopting legislation to enable EU-wide compulsory licensing in crisis situations. Both may be signs of the EU’s changing positions regarding TRIPS flexibilities, at least during emergencies. This is precisely why it should not be a problem for the EU to support a peace clause in the WHO pandemic accord.
Further reading
Historical account of dwindling national flexibilities from the Paris Convention to post-TRIPS era: What implications for access-to-medicines in low-and-middle-income-countries?, Olugbenga A. Olatunji, Journal of World Intellectual Property 2022
Private Patents and Public Health, by Ellen ‘t Hoen (2015)
Government use licenses in Thailand: The power of evidence, civil movement and political leadership, Suwit Wibulpolprasert et al, Globalization and Health (2011)
The Global Politics of Pharmaceutical Monopoly Power, by Ellen ‘t Hoen (2009)
