Patent Waiver In The Time Of COVID-19

This article, written jointly by Dr. Longton and Dr. Kleyn, was originally published on lesi.org. The original posting can be found here.

In light of the Covid-19¹ pandemic that has plagued the world since its December 2019 discovery in China, there has been growing support for the reduction or outright suspension of Intellectual Property (IP) rights related to Covid-19 treatments and therapies. Those who favor this approach refer to it as “patent waiver.” The IP rights most frequently mentioned in this regard are patent rights, although other intellectual property rights have not escaped similar scrutiny. The movement to waive patent rights has become more widespread over the last several months with the approval of safe and effective Covid-19 vaccines credited with reducing transmissions of the virus and lowering morbidity and mortality rates. These encouraging results are seen among those who have been fully vaccinated and those who live in places where vaccines are readily available.

The currently approved vaccines are not yet as widely available as one would hope. Death and infection rates in many countries continue at appalling levels. While efforts are underway to make the vaccines available to every person on the planet (approximately 7.9 billion people, according to recent United Nations estimates), these are severely hampered by supply and distribution problems, and are proceeding at a snail’s pace. Despite vaccine hesitancy or the “Covid-19 denial” promoted by fringe groups, support for vaccination and hence demand for ready vaccine access are widespread throughout the world. Based on current vaccination rates, vaccine availability, distribution, and supply-chain bottlenecks, it is clear much more must be done if we are to get vaccines from vials into arms to defeat this virus.

It is against this backdrop that the interest group that promotes waiver of intellectual property rights related to Covid-19 treatments and therapies has gained momentum. Loosely summarized, the movement’s position seems to be that the limited exclusionary rights granted by intellectual property rights stand in the way of rapid deployment of the Covid-19 vaccines approved to date. The argument is that intellectual property rights, and specifically patent rights, impede our ability to deal with this global health crisis because they prevent or slow efficient manufacture and subsequent distribution of vaccines to those who need them most. Extraordinary times, it is said, require extraordinary measures, in this case, patent waiver. But, resting as it does on several false premises, the argument fails.

The approach advocated by those who would waive intellectual property rights, including copyrights, industrial designs, patents, and trade secrets is, at best, short-sighted and counter-productive, and, at worst, harmful. In our view, a better and already available way balances the need for rapid deployment of every medical tool and related technology at our disposal to combat the virus against legitimate IP rights, including those of patent owners. To toss current procedures aside would amount to nothing less than a reactionary move undermining the very foundations of the patent system. We explain this below.

First, no evidence suggests that patents hinder vaccine availability or that any relevant patent holders are using their intellectual property rights to limit either the production or distribution of vaccines. None. Given this foundational fact, it is unclear how a patent waiver is supposed to be of remedial effect in the worldwide effort to contain and ultimately neutralize Covid-19 and its continuing variations. Far from benefiting this effort, patent waiver instead invites the production of counterfeit and dangerous, low-quality knockoffs and the diversion of scarce raw materials away from established manufacturing facilities. Perhaps just as important, it inhibits what patents are designed to stimulate and effect, that is, research and innovation, and therein it weakens the sanctity of private property not only without providing a compensatory social benefit but encouraging license and fraud. These are not new objections to the very concept of patent waiver, and it is plain that contentions in favor of that idea are notoriously vague.

Second, arguments in favor of unilateral state-mandated waiver of legitimate patent rights appear to us less persuasive than ones, including ours, which support the view that mechanisms that facilitate vaccine manufacture and distribution are already in place and functioning as they should. These include voluntary licensing (albeit royalty-free by some patent holders in the aid of serving the public), private sector collaborations, public/private partnerships, compulsory licensing (we note that many countries have adopted amended patent legislation to incorporate compulsory licensing), and all these in combination, examples of which come to light nearly every day in press releases and news accounts.

Third, among the real challenges slowing availability of approved vaccines—lack of raw materials, distribution and supply-chain issues, the complexity of the vaccines themselves, and matters of quality control—none have to do with patents, rendering patent waiver nugatory.

The Origin of Patent Waiver

The patent system is made up of an extensive body of national and international laws, regulations, conventions, agreements, treaties, judicial findings, and other processes. One of the purposes of this vast framework is to provide certainty and predictability both to patent holders and the public at large. Patent holders seek assurance that their rights are enforceable; the public, confidence that the quid pro quo of the grant of a patent for public disclosure of a new invention will eventually inure to its benefit. The international association where agreements related to intellectual property are negotiated is the World Trade Organization (WTO), headquartered in Geneva, Switzerland.

The 1994 Marrakesh Agreement which established the WTO provided particularly for a forum within it “for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to this Agreement.” One of these, The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), sets the minimum standards that each of the member countries, as of now numbering about 160, must implement to protect intellectual property rights. Article 30 of TRIPS declares, however, that members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner. Such flexibilities provide a degree of freedom for countries to accommodate their own intellectual property systems to the basic standards, thus allowing members to formulate national legislation to ensure a proper balance between the goal of incentivizing innovation and protecting the public interest. Three main areas of flexibility concern parallel importation, a research exception, and compulsory licensing. In the context of public health, the most-used flexibility under the guidance of TRIPS is that of compulsory licensing.

In brief, compulsory licensing in the circumstances the Covid-19 pandemic has generated is an important tool that Governments may use to help them fulfill their human rights obligations to provide access to essential medicines. Still, compulsory licenses need to be used with care; as a general rule they should only be granted if attempts to acquire a voluntary license on reasonable terms and conditions and within a reasonable period of time have been unsuccessful. It is important to keep in mind that, under TRIPS, given the circumstances of each case, adequate remuneration is required, and in addition, decisions are to be subject to judicial or other independent review.

Nevertheless, under TRIPS it is entirely possible to waive IP rights, as the 2007 amendment (Article 31bis) the WTO adopted in addressing some of the shortcomings of the existing flexibilities attaching to compulsory licenses makes clear.

The WTO may also provide a forum for further negotiations among its members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference of the WTO.

In terms of Article IX.3 of the WTO Agreement, in “exceptional circumstances” the Ministerial Conference of the WTO may waive an obligation imposed on a WTO member by “any other multilateral trade agreement.” The WTO Agreement sets out the requirements in detail which include the submission of a request to various international Councils including the TRIPS Council. A waiver may only be granted when there is a justification that explains what the “exceptional circumstances” are, as well as an explanation that sets out the terms and conditions that shall govern how the waiver will work. The waiver should also not be unlimited and be set for a time frame subject to review by the Ministerial Conference if the waiver is granted for more than one year.

There have been various formal TRIPS Council meetings convened to discuss waiver requests received in response to Covid-19, the most recent the authors are aware of being the 23 February 2021 meeting, as well as informal meetings in May and June 2021. It is reported that members were unable to reach a decision.

The patent waiver controversy, that is, whether patent rights should be waived if they have virtually anything to do with a deadly disease, is not new. We faced the same issue two decades ago when HIV/AIDS was considered an emergency calling for action under TRIPS flexibilities. We expect the Covid-19 pandemic to arouse the same response now. But waivers can only be granted on a country-by-country basis, and, according to TRIPS Council reports, to date there has been reluctance on the part of developed countries to waive IP rights. The recent announcement by the United States that it intends to support the patent waiver for vaccines may tip the scale in favor of the waiver proposals being negotiated before the TRIPS Council, but what precisely the terms and conditions of the waiver would be is unknown. One proposal being considered (originally submitted by South Africa and India, which is addressed below) is noted for its extraordinary breadth and lack of specificity. A waiver must be supported by three-quarters of the members of the WTO for it to be effective.

It appears that some form of waiver is imminent. The application made by South Africa and India in October 2020 and amended in May 2021 is currently supported by 60 WTO members.²

The argument in favor of the waiver of IP rights is that the only quick and efficient option that will bring about rapid relief is to rely on the instrument of waiver of IP rights that will allow access to vaccines developed to combat the Covid-19 pandemic. It is simply asserted, without demonstration, that rapid and easy access not only to vaccines but also to such affordable medical products as diagnostic kits, ventilators, medical masks, and other personal protective equipment is the only effective response to the disease, and it can only be achieved by patent waiver, since normal TRIPS flexibilities, among them compulsory licenses, being time-consuming and expensive, are irrelevant.

All of this raises more questions than it answers. Is it really necessary to waive IP rights to alleviate the burden of access to effective and affordable medicines and vaccines? Does not Article 31bis of TRIPS already allow sufficient flexibility? What has patent waiver to do with manufacturing and distribution when the real problems have more to do with lack of raw materials and logistical hold-ups? And what, finally, are to be the consequences for future research and development in the pharmaceutical industry?

The Proposed Waiver

A patent grants a negative right—the right to exclude others from certain conduct such as making, using, offering for sale, selling, and importing a claimed invention. Waiving one or more of the rights conferred by a patent, or any intellectual property right, would mean that the owner of the right will not be able to enforce the right against infringers, and will not be able to charge a royalty or license fee for the use of the right. It is unclear how a patent waiver would be implemented by WTO member states, or what would be included in such a waiver.

The patent waiver proposed by South Africa and India directed to Covid-19 is the subject of ongoing negotiations at the WTO. The most current version of the proposal, dated 25 May 2021, includes an exceedingly broad IP waiver provision, which states in part:

(1) The obligations of Members to implement or apply Sections 1, 4, 5, and 7 of Part II of the TRIPS Agreement or to enforce these Sections under Part III of the TRIPS Agreement, shall be waived 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. See, “Waiver From Certain Provisions of the Trips Agreement for the Prevention, Containment and Treatment of Covid-19” dated 25 May 2021 (emphasis added).³

The scope of the proposed waiver is as stunning as it is vague. With respect to patents, the proposal provides no guidance as to what specific patents would fall within the scope of the waiver, or what to do about patents that might cover Covid-19 vaccines, or the technologies used to make the vaccines, but also cover other potential vaccines unrelated to Covid-19 or the underlying technologies applied in other ways.

The Patents at Issue

The pharmaceutical patents at issue here, in the words of the proposed waiver, are those patents related 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.”

Four of the most prominent approved vaccines to date are the Pfizer-BioNTech vaccine, the Moderna vaccine, the Johnson & Johnson vaccine, and the Oxford-AstraZeneca vaccine. Other vaccines exist, or are on the way, e.g., Novavax has recently announced that its vaccine candidate is about 90% effective. But the question remains: what specific patents would be subject to any proposed patent waiver? To answer this question, we must first briefly address a few aspects of patents and how they relate to the technologies at issue.

A patent, or more precisely, the property right granted by a patent, is defined by the claims recited in the patent. Claims can be broad in scope, they can be very narrow, or they can be everything in between. The technologies encompassed by the vaccines mentioned above are extraordinarily complex. The Pfizer-BioNtech and Moderna vaccines rely upon a new platform technology that facilitates the delivery of specific mRNA molecules encoding a desired antigen (a protein or peptide sequence) to elicit an immune response. In theory, this platform technology can be applied to any disease, as long as a suitable antigen exists that can be encoded by mRNA. This is a new technology that has never been used before to make a safe and effective vaccine, let alone an mRNA vaccine. The Johnson & Johnson and the Oxford-AstraZeneca vaccines work in a different way. These vaccines use a viral vector (weakened adenovirus) to deliver DNA instead of mRNA to cells. The DNA codes for an antigen specific to the Covid-19 virus, which when produced by cells elicits an immune response in an individual.

All of this is to say that the technologies that go into making the approved Covid-19 vaccines are extraordinarily complex and not easily duplicated. As such, many types of patent claims, of varying scope, exist that are directed to different aspects of the relevant technologies. Some of these claims are very narrow and cover specific embodiments of the technology, such as a particular formulation, a particular target, or a particular disease, for example. But other, broader claims exist that would not be limited to Covid-19, or specific Covid-19 vaccine formulations. As alluded to above, the claims in these patents could encompass any of several other unrelated formulations, diseases, or conditions, while at the same time include Covid-19.

The point is, relevant patents that would presumably fall within the scope of the patent waiver proposed by South Africa and India, by virtue of the technologies they cover, are themselves extraordinarily complex and multifaceted. To its detriment, the vague, exceedingly broad patent waiver proposal currently under consideration at the WTO ignores this fact.

Conclusion

Waiving IP rights will open the door for counterfeit pharmaceuticals and sub-standard health devices and equipment that could only have a negative impact on companies, governments and consumers. Patent waiver in particular would do little if anything to alleviate the problem of ready global vaccine access. This is because patents have nothing to do with the problem. Governments should instead focus their efforts on strengthening those mechanisms already in place, namely, voluntary licensing, private sector collaborations, public/private partnerships, compulsory licensing, and all these in combination, to not lose confidence in medications and the public health system. ■

1. We use the term “Covid-19” herein to include the virus SARS-COV-2 and the disease COVID-19 which is caused by the virus.

2. https://www.wto.org/english/news_e/news21_e/ trip_30apr21_e.htm

3. Note that Sections 1, 4, 5, and 7 of Part II of the TRIPS Agreement are directed to copyrights, industrial designs, patents, and trade secrets, respectively. Consequently, the proposal is not limited to waiver of enforcement of just patent rights but also includes waiver of enforcement of these other IP rights as well.