Global Response to COVID19: Why TRIPS Provisions Must be Waived?

If the waiver comes into effect the non-natural barriers created to protect “knowledge assets” in the form of copyright, patents, protection of industrial design and undisclosed information would come down.

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On 2nd October 2020, India and South Africa, in their joint communication to the Council to TRIPS, WTO, voiced a major concern of the post COVID-19 period, the issues in “…access to affordable medical products… or to scaling-up of R&D, manufacturing and supply of medical products essential to combat COVID-19″.  The countries have called for a temporary waiver of implementation, application, and enforcement of certain provisions of the TRIPS Agreement related to the patent, copyrights, trade secrets and industrial designs with regard to the COVID-19. The waiver intends to do away with IP monopoly and ramp up the manufacturing of COVID 19 medical production through generic production.

The request is submitted to the Council for TRIPS under Art. IX3(b) of the WTO Agreement. The waiver request and the accompanying draft decision clearly explains the ‘exceptional circumstances justifying the decision, the terms and conditions governing the application of the waiver’(See Article IX.4 WTO Agreement). The waiver proposal has precedents set in WTO and waivers were allowed within TRIPS itself [WT/L/478 ; WT/L/540 ; WT/L/971].

Ad-hoc actions cannot suffice a proper remedy to the crisis. Broken supply chains along with ever-rising demand result in acute shortages of life-saving medical technologies and medicines at the forefront. For a successful and sustainable way out, countries need to turn to domestic manufacturing which requires navigating through barriers created by multiple IPs.

The obvious question to such a response would be, TRIPS has flexibilities that provide leeway for the countries to overcome the barriers created by the global IP system, then why the temporary waiver?

TRIPS agreement mandates minimum standards of IP protection and enforcement. However, some leeway has been provided in the TRIPS Agreement to balance the interest of IP holders with the public interest, with mechanisms like compulsory license or government use license. Yet the IP systems have created impediments in scaling up of the productions of medical products for COVID-19 responses.

For instance, the Netherlands was pushed to a limited testing policy due to shortage of lysis buffer solution.

Also Read : Combating COVID-19: India and South Africa Call for Waiver on TRIPS Provisions

This is a crucial component in testing and the shortage was created by Roche, a Swiss pharmaceutical company on which the Dutch testing labs were dependent.  for reagents. The sale of reagents was a channel of income for the company and therefore the labs were in ‘vendor lock’ agreement with Roche. When Roche entered the global market with testing kits, they were unable to keep up with the demand for reagents. Jeopardizing public health and safety Initially, Roche did not share the recipe for the solution which then could have been easily manufactured inhouse by the labs to meet the demand. The crisis in Italy concerning the shortage of ventilator valves is not a very different story. With the aid of 3D technology, the crisis could have been averted at a significantly lower price, but the “complex IP issues concerned with 3D printing technology” became an impediment to scale the response. “In scanning a component such as a valve, and manufacturing a part using 3D printing equipment, there is a risk that this action will infringe an existing patent, design or copyright which protects the component, leading to an injunction or claim from the rights holder for damages or other remedies” warned a law firm. This indicates the high-cost IP system bears on Pandemic response. The hurdles created by IP stands between the essential day to day frontline protective gears such as N95 masks. In the US, the Governor of Kentucky called out the multinational company 3M to have its patents on N95 respirator released. Unfortunately, that has not happened yet. On top of this, there are multiple patent claims over the technology to develop the vaccine. In essence, the IP system stifles the warlike response we require to fight the pandemic.

Flexibilities such as compulsory license (CL) stands incapacitated to counter the crisis because of two major reasons. Firstly, Art 31 provides quite an extensive and detailed list of procedural requirements and conditions to be fulfilled before granting a compulsory license. It includes consultation, pre-defining the scope of operation and life of the license, authorizations, and compensation. Even if some provisions like consultations may be skipped during emergencies, predetermination of the scope of the license and prequalified “adequate” remuneration lead to legal, political, and transactional cost.

This cost may seem negligible for one patent but to process multiple patents at the same time with the threat of incurring a significant transactional cost increases the opportunity cost of the policy decision.

Also Read : COVID-19: An Opportunity to Fix Dysfunctional Biomedical R&D System

Secondly, there is an overbearing political pressure (internationally) to stop the issuance of compulsory licenses, especially in pharmaceutical and allied industries. Developing countries are prone to, especially in times such as a pandemic, submitting to such threat or bully, as they do not wish to jeopardize an already battered economy with further trade sanctions and shaming.

Further, the case is worsened when there are insufficient or no manufacturing capabilities. Art. 31(f) could be brought as an answer but with recent trends such as ‘vaccine nationalism’ it would be naïve to assume its success. Further, its scope is limited by Art 31bis safeguards to prevent ‘trade diversion’.

The current approach to answering all these concerns have been voluntary initiatives (e.g. ACT, COVID-19 Technology Access Framework and COVID-19 Patent Pool). As commendable these initiatives may be, they are insufficient to address the current crisis. The probable success of these rests upon the voluntary participation of IP holders which taking a cue from the above-described circumstances remain highly unlikely.

In essence, the present system creates staggering delay in getting lifesaving drugs to people of developing and least developed countries. If this waiver comes into effect the non-natural barriers created to protect “knowledge assets” in the form of copyright, patents, protection of industrial design and undisclosed information would come down. This would create an opportunity for easy and equitable access to strategic information, technology, and foundational knowledge to produce the medical product required for COVID-19 response. Thus, the proposal creates a policy space to act fearlessly encouraging a single global counteraction to the crisis as the time demands.