TWN Info Service on Intellectual Property Issues (Dec08/05)
20 December 2008
Third World Network 

Health: North-South fight on IP, Benefit Sharing issues in influenza talks
Published in SUNS #6614 dated19 December 2008 

Geneva, 18 Dec (Sangeeta Shashikant) -- Issues concerning intellectual property rights and fair and equitable benefit sharing are likely to be major factors on whether WHO member states are able to reach agreement on a framework for virus and benefit sharing. 

Several delegates participating in last week's Intergovernmental Meeting on Pandemic Influenza Preparedness (IGM) (under the World Health Organisation) from countries providing influenza viruses to laboratories and manufacturers in developed countries, privately mentioned that the positions taken by developed countries in particular by the US, Japan and the EU on issues such as intellectual property rights and benefit sharing reveals the  "double standards" of those countries. 

On the one hand, the IGM saw the US, Japan and the EU pushing hard for relinquishment of sovereign rights, an interpretation of the International Health Regulations that obligates the sharing of viruses, text that requires countries to share as "all, as feasible, cases of H5N1 and other influenza viruses with human pandemic potential" with their laboratories in the name of global public health and pandemic preparedness.

However, on the other hand, they appear unwilling to commit in particular their manufacturers and researchers that receive biological materials to any concrete benefit sharing scheme, or to address IP issues in a manner that benefits developing countries' public health and pandemic preparedness. Much of the framework's text that deals with benefit sharing continues to remain in brackets, denoting there is no agreement.

Whenever reference to "manufacturers" and the need to have a better understanding of their roles and responsibilities was made by developing countries at the meeting, the issue was quickly passed over by the Chair of the IGM, Jane Halton from Australia. And countries such as Japan and the US insisted that the framework being developed should not dictate what the manufacturers or the researchers can do with the biological materials, or their roles and responsibilities. 

In fact, interventions by the US, Japan and France on behalf of the EU suggest that benefit sharing with developing countries could be reduced to: 

(1) sharing of pandemic risk assessment, candidate vaccine virus and diagnostic reagents and test kits to be provided by the laboratories doing analyses with the receiving biological materials; 

(2) laboratory and influenza surveillance and regulatory capacity building (but subject to national laws) that is provided on request; 

(3) antiviral and vaccines stockpiles (the building of which in any case is already required by existing World Health Assembly resolutions); 

(4) general language on providing access to developing countries at affordable prices, with member states urging vaccine manufacturers to provide a discounted rate; 

(5) voluntary licensing of technology and know-how at commercial rates; 

(6) vague language on financing mechanisms, which may be made up of voluntary contributions. 

Due to the asymmetry of power between developed and developing countries; and the existence of a traceability mechanism which only tracks virus sharing, the likely result is a system whereby virus sharing will be tracked closely. 

However, with the weak and vague proposals on benefit sharing, little will materialize in terms of fair and equitable benefit sharing. 

During the IGM, the US also objected to the use of any language on "rights", insisting on reference to only "obligations".  

On the issue of IP, several proposals were put forward by several developing countries. Recent years have seen a dramatic rise in international patent applications related to influenza (related to the virus itself, vaccines, treatments and diagnostics). In particular patent activity related to H5 viruses is intensive and increasing sharply. 

On whether IP could be claimed over biological materials that were shared, Brazil proposed "Institutions, organizations and entities providing or receiving PIP biological materials shall not seek or claim intellectual property rights over those materials in any form". 

This was to replace the proposal in the Chair s text that stated:

"Institutions, organizations and entities providing or receiving PIP biological materials shall not assert intellectual property rights over those materials". 

In relation to the products and processes developed using biological materials, Nigeria proposed that "Institutions, organizations, entities or Member States inventing patentable processes or products using PIP biological materials shall at all times grant royalty-free licenses to developing countries to use products and processes developed from PIP biological materials". Nigeria's intervention was supported by India and Brazil.

Thailand encouraged WHO member states to exclude from patentability inventions necessary to protect health as allowed by Article 27.2 of the TRIPS. 

In addition it proposed: "Institutions, organizations, and entities receiving PIP biological materials shall not seek intellectual property rights over any method of use, application or specific uses of PIP biological materials; or over products, processes or other inventions including vaccines, diagnostics, or pharmaceuticals derived from or developed using PIP biological materials". 

These proposals were to replace the Chair's text which was limited to allowing royalty free licences to use processes or products developed from the use of the biological materials shared for non-commercial public health research and during a pandemic declared by the World Health Organization. 

The US vehemently objected to these proposals stating that the "Use of an MTA [material transfer agreement] shall have no effect on obligations or restrictions that arise from intellectual property rights. Any intellectual property rights associated with the materials or its use will not be disturbed by the conveyance and subsequent distribution of the materials." 

It also claimed that in order for there to be technology transfer it is common for a public sector entity to see a patent on product or technology for the express purpose it remains in the public domain so that it permits transfer. 

It further added that the IGM was not the right forum for discussing issues of IP. 

Brazil called US argument "interesting" though "fallacious", adding that not being allowed to claim IP over the biological materials did not prevent the recipients from selecting the candidate vaccines virus or developing vaccines and other products. 

Brazil also pointed out that the recently adopted Global Strategy and Plan of Action in WHA 61.21 had strengthened WHO's mandate on IP issues thus it was the right forum to discuss IP.

While the US wished to delete any reference to IP from the Chair's text, it sought to relinquish the sovereign rights of the countries providing the biological materials and proposed "WHO Member states participating in the WHO Network will not claim sovereignty or ownership rights over viruses as found in nature". 

The US also sought deletion of language in the Chair s text that said "By providing PIP biological materials, the originating Member States do not transfer ownership rights over those materials to the receiving institution, organization, entity or Member state". 

The apparent hypocrisy of the US was rejected by Thailand, Brazil, Libya and Nigeria which proposed that additions by the US be deleted. 

A legal expert familiar with US laws noted that it was interesting that the US which frequently claims sovereignty over its own biological materials is willing to expressly state a waiver of sovereign rights at the multilateral level. 

Some participants also noted the reaction of the Chair of the IGM Jane Halton of Australia, who kept insisting that developing countries making proposals on IP did not understand issues of patentability.

However, the issue at hand is not one of "patentability" (i.e. what can and cannot be patented). The issue really is on what terms and conditions should the recipient be receiving biological materials and these terms and conditions will explicitly be stated in the SMTA. 

An Asian delegate also noted that the present virus and benefit sharing framework provides an opportunity to implement certain elements in the Global Strategy and Plan of Action on Intellectual Property, Innovation and Public Health in a concrete manner. 

In connection with benefit sharing, one principle that was accepted by the meeting was that "Member States have a commitment to share on an equal footing H5N1 and other influenza viruses of human pandemic potential and the benefits, considering these as equally important parts of the collective action for global public health." 

However, in reality, most of the text in relation to virus sharing is no longer in brackets while text in relation to benefit sharing (in particular the parts that place an obligation on or relates to the manufacturers) is placed within brackets.  

The result is a draft text which is lopsided in favor of sharing of influenza viruses but which shows little by way of concrete benefit sharing obligations particularly by the manufacturers and researchers that receive biological materials.  

The benefits are listed in Part 6 of the Chair's  text and include headings such as pandemic risk assessment and risk response, provision of candidate vaccine viruses, provision of diagnostic reagents and test kits, laboratory and influenza surveillance capacity building, regulatory capacity building, antiviral and vaccine stockpiles, access to vaccines for use, tier pricing, technology transfer, sustainable and innovative financing mechanisms. 

Most of the elements in Part 6 are in brackets. 

The US, Japan and France on behalf of the EU sought deletion of  language  that proposed that vaccine manufacturers should set aside a portion of the vaccines produced for developing and least developed countries either during the pre-pandemic or pandemic periods even where it is voluntary in nature. 

With regard to technology transfer, US also proposed deletion of language that only required member states to urge vaccine manufacturers to grant on request non-exclusive royalty free licences to vaccine manufacturers to use IP protected technologies and know-how. 

In another paragraph that concerned vaccine manufacturers that receive biological materials granting royalty free licence on a voluntary basis, the US insisted on adding "as appropriate and subject to existing licensing restrictions". 

An expert following the issue noted that the US insertion meant that the US allows technology holders to transfer technology by selling licenses to developing countries on a commercial basis, which is not a benefit to developing countries at all but  merely a commercial transaction. 

In relation to regulatory capacity building Brazil proposed language that "Member States should make available through WHO Secretariat in a timely manner publicly available information related to health regulatory approval of H5N1 and other influenza viruses with human pandemic potential vaccines diagnostics and pharmaceutical products including those developed from the use of PIP biological material. WHO Secretariat should examine the feasibility of creating a database of such information." 

Even such a mild proposal, was resisted by France on behalf of the EU and the US, as they could not accept language that required the sharing of regulatory data even when these are publicly available.

On one occasion during discussion on sharing of regulatory data, Halton, the Chair of the IGM, on hearing Brazil's proposal questioned Brazil whether it was seeking information that would violate commercial confidence (i.e IP laws). 

A legal expert familiar with US laws privately noted that the if WHO member states are speaking of pandemic preparedness, the EU, US, Japan and Australia should be asked to share on a mandatory basis not only regulatory data that is publicly available but also data that is confidential because such data is critical for obtaining regulatory approval at the national level for treatments and vaccines used in the pre-pandemic and pandemic stages.

The expert said that Article 39.3 of the TRIPS Agreement requires countries to protect such data against disclosure, except where necessary to protect the public.  

On the issue of sustainable financing, Japan, US and France on behalf of the EU sought to delete benefits related to a sustainable financing mechanism. For example Japan sought deletion of the idea of "mandatory contributions from influenza vaccines, diagnostic and pharmaceutical manufacturers based on X% of the sales of products developed using biological materials shared". 

In relation to WHO antiviral and vaccine stockpiles, Japan doggedly insisted that any reference to the WHO should be deleted since there were many other organizations that engaged in stockpiling besides the WHO and this should be duly recognized. 

However, India maintained the need to retain "WHO" in relation to the issue of stockpile, clearly stating that it had no objection to other regional and multilateral stockpiles being  treated separately but there is a "certain sanctity" it attached to the WHO stockpile, stressing that a WHO stockpile had to be a stand alone item. 

The key benefits for developing countries is to enhance national and regional production capacity of pharmaceuticals, diagnostics and vaccines and this can only be done through the sharing of technology and know-how by the manufacturers and researchers as well as a financing mechanism which could be comprised of mandatory contributions by the recipients of biological materials. 

In addition, manufacturers could be asked to set aside a portion of the vaccines or pharmaceuticals produced using the biological materials particularly in the pandemic period for the WHO stockpile as well as for use in developing countries. This is especially important since during a pandemic there is likely to be a shortage of vaccines and pharmaceuticals as developed countries that have already entered into advance purchase commitments with manufacturers will be given priority.  

However, none of the abovementioned benefits feature concretely in the framework. 

A delegate participating in the meeting noted that unless the standard material transfer agreement (SMTA)  details in the paragraph on benefit sharing the specific benefit sharing obligations of the recipients of the biological materials, benefit sharing for developing countries is unlikely to materialize, adding that rhetorical language similar to that in Part 6 has been seen in many resolutions with little positive effect.

For a concrete commitment on benefit sharing, the SMTA has to detail the benefit sharing obligations of the recipients of biological materials.

This would also be coherent with the basic accepted foundation of the framework, i.e commitment to share on an equal footing, since recipients of biological materials that gain from the framework (such as manufacturers/researchers) should also commit to return benefits to member states through the framework. +