Clifford Chance

Introduction

On 2 October 2020, India and South Africa submitted to the Council for TRIPS the first proposal suggesting a waiver for all WTO members on the implementation of certain provisions of the TRIPS Agreement in relation to the prevention, containment or treatment of Covid-19. On 25 May 2021, a revised proposal was submitted with the Council by 62 co-sponsors (out of 159 WTO member states), including India, South Africa and Indonesia. The submission of the proposal, as subsequently amended (the "Proposal"), resulted in a lively debate among the WTO members. The US administration voiced its support for a vaccines waiver and expressed its willingness to actively participate in text-based negotiations at the WTO regarding a waiver for Covid19 vaccines, while EU leaders and pharmaceutical companies said that waiving patents de-incentivises innovation at a crucial time and ignores supply constraints. Given that the proposal addresses certain IP issues, the IP community expressed its view and took a position in the debate.

Background: the TRIPS Agreement

The TRIPS Agreement is Annex 1C to the Marrakesh Agreement Establishing the WTO dated 15 April 1994 ("WTO Agreement") and entered into force on 1 January 1995. The TRIPS Agreement forms an integral part of the WTO Agreement and is binding on each member of the WTO. It is a comprehensive multilateral agreement on IP matters and deals with each of the main categories of IP rights, establishes standards of protection, rules on administration and enforcement of IP rights, and provides a dispute settlement mechanism dedicated to WTO members.

Focusing the analysis on those provisions of the TRIPS Agreement interested (affected?) by the Proposal, Part II of the TRIPS Agreement sets out the minimum standards of IP protection to be met by WTO members in the following fields:

• copyright (and related rights, such as the rights of performers, producers of sound recordings and broadcasting organizations) (Part II, Section 1);
• trademarks, including service marks (Part II, Section 2);
• geographical indications (Part II, Section 3);
• industrial designs (Part II, Section 4);
• patents, including the protection of new varieties of plants (Part II, Section 5);
• the layout-designs of integrated circuits (Part II, Section 6); and
• undisclosed information, including trade secrets and test data (Part II, Section 7)

The TRIPS Agreement requires the member states to comply with the substantive obligations of the main conventions of the World Intellectual Property Organization ("WIPO"), namely the Paris Convention and the Berne Convention. All the main substantive provisions of these two conventions are incorporated by reference. Moreover, it provides for additional obligations on matters where the existing conventions were silent or offered inadequate protection.

The Proposal

Developing countries, such as India and South Africa, are proposing a temporary suspension of the IP rights relating to Covid-19 vaccines. They argue that protecting vaccines and other Covid-19 treatments with patents concentrates them in the hands of richer countries, locking out poorer countries who have so far struggled to gain access to them. They claim that waiving IP rights could allow for vaccine technology to be more easily shared between countries all over the world.

In a nutshell, the Proposal aims at:

• highlighting the uncertain nature of the pandemic which, amongst other things, includes the emergence of new variants of the virus and therefore "the global need for unimpeded, timely and secure access to quality, safe, efficacious and affordable health products and technologies for all, for a rapid and effective response to the Covid-19 pandemic and consequently the urgent need to diversify and scale-up production to meet global needs and promote economic recovery";
• recognising the need to balance incentives for research and innovation with the public health interest, which justifies waivers from the obligations of the TRIPS Agreement in exceptional circumstances; and, therefore,
• waiving the IP protection provided by Sections 1, 4, 5 and 7 of Part II of the TRIPS Agreement in relation to "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".¹

The Proposal outlines that the waiver would be in effect for three years and would be reviewed on a regular basis by the WTO General Council.²

AIPPI's position

As a member of the international IP community, the Association expressed its position on the Proposal. Preliminarily, AIPPI shared the concerns raised by the waiver proponents and co-sponsors with respect to the challenges posed by the current pandemic and confirmed that the priority remains the containment of the pandemic, without excluding Africa, Asia and South America from the vaccination programme. Moreover, AIPPI called for an active commitment to a comprehensive, global approach that leverages the entire multilateral trading system in place "to support the research, development, manufacturing, and distribution of safe and effective COVID-19 diagnostics, equipment, therapeutics, and vaccines".

However, AIPPI outlined that there is no evidence that IP rights constitute a barrier for the accessibility of Covid-19 related medicines and technologies. In the opinion of AIPPI, waiving TRIPS Agreement provisions would negatively impact the framework established to reach the objectives mentioned above on both a medium and a longterm basis. Conversely, AIPPI urged WTO members to recognise how IP rights have contributed to the advancement of science and to innovations in medicine and public health. The recently developed Covid-19 vaccines and therapeutics were discovered based on years of research supported by IP rights.

In AIPPI's view, patent protection is fundamental for at least three reasons: (i) it compensates innovators for the risks of success (or failure) of their research and provides them with a measure of comfort as to which up-front investments can be recouped over some future period; (ii) it ensures negotiation of the results of innovators' research, through the license mechanism, and (iii) requires the owner to offer the results to the public, to allow anyone to study, improve and develop alternative solutions. These effects play out particularly strongly in the pharmaceutical sector, where the risk of product failure is high, the potential benefits to society are significant, and the cost of innovation is large (and growing).

Conclusion

AIPPI concludes that the execution, implementation and consequent effects of a waiver in various legal systems should be appropriately assessed before implementing any change or waiver. AIPPI believes that "discussions being held at the WTO TRIPS Council will … find an appropriate global approach to contribute to solving the problems posed by the current pandemic, while … balancing the right of all to have access to health services and supplies with other stakeholders’ rights".

AIPPI outlined that patent protection is not the "real" barrier to expanding vaccine supply. Accelerating the timetable to global rollout (and ensuring the global population has protection before 2024) requires the resolution of issues in the production and distribution of doses through ongoing collaboration between businesses, governments and regulators. Continued cooperation will therefore be crucial to the speed and success of the global rollout programme, regardless of who holds the relevant IP

¹ The waiver relates to the Member States' obligations under the TRIPS Agreement regarding: (i) copyright and related rights (Part II, Section 1); (ii) industrial designs (Part II, Section 4); (iii) patents (Part II, Section 5); and (iv) the protection of undisclosed information (Part II, Section 7).

² This is the second tier in the WTO structure after the Ministerial Conference (the highest decision-making body in the WTO).