TWN Info Service on Intellectual Property Issues (Mar22/05)
17 March 2022
Third World Network

Proposed TRIPS waiver outcome not yet agreed among the Quad

Geneva, 16 Mar (TWN) — The “compromise outcome” purportedly reached among the Quad members – the United States, the European Union, India, and South Africa – with respect to the TRIPS waiver proposal is not an agreed outcome, according to a statement issued by the WTO Director-General on 16 March.

The Quad has been engaged in intense negotiations in recent months to find a path forward on the TRIPS waiver proposal co-sponsored by 65 WTO members.

The statement by the DG stressed that “not all the details of the compromise have been ironed out and that internal domestic consultations within the four members are still ongoing” and that “work must commence immediately to broaden the discussions to include all 164 members of the WTO”.

The statement follows the publication by Statnews.com on 15 March of the text of the so-called “compromise” outcome that was leaked.

The leaked proposed outcome is only for vaccines, leaving the fate of the diagnostics and therapeutics to be decided within 6 months of the adoption of the decision.

In an official statement issued on 15 March, the spokesperson for the United States Trade Representative, Mr Adam Hodge, had said “the difficult and protracted process has resulted in a compromise outcome that offers the most promising path toward achieving a concrete and meaningful outcome.”

The spokesman said categorically that “while no agreement on the text has been reached and we are in the process of consulting on the outcome, the US will continue to engage with WTO Members as part of the Biden-Harris Administration’s comprehensive effort to get as many safe and effective vaccines to as many people as fast as possible.”

The EU is currently holding consultations with its member states.

After more than 18 months of gruelling efforts by the co-sponsors of the TRIPS waiver proposal, who tabled their first proposal on 2 October 2020, the proposed outcome is a significant departure from their revised proposal tabled on 25 May 2021 (IP/C/W/669/Rev.1) that has received widespread global support.

That proposal by the 65 co-sponsors clearly stated that “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.”

The proposed outcome, as published in Statnews.com is as follows:

1. Notwithstanding the provision of patent rights under its domestic legislation, an eligible Member [1] may limit the rights provided for under Article 28.1 of the TRIPS Agreement (hereinafter “the Agreement”) by authorizing the use of patented subject matter [2] required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic, in accordance with the provisions of Article 31 of the Agreement, as clarified and waived in paragraphs 2 to 6 below.

2. For greater clarity, an eligible Member may authorize the use of patented subject matter under Article 31 without the right holder’s consent through any instrument available in the law of the Member such as executive orders, emergency decrees, government use authorizations, and judicial or administrative orders, whether or not a Member has a compulsory license regime in place. For the purpose of this Decision, the “law of a Member” referred to in Article 31 is not limited to legislative acts such as those laying down rules on compulsory licensing, but it also includes other acts, such as executive orders, emergency decrees, and judicial or administrative orders.

3. Members agree on the following clarifications and waivers for eligible Members to authorize the use of patented subject matter in accordance with paragraphs 1 and 2:

(a) With respect to Article 31(a), an eligible Member may issue a single authorization to use the subject matter of multiple patents necessary for the production or supply of a COVID-19 vaccine. The authorization shall list all patents covered. In the determination of the relevant patents, an eligible Member may be assisted by WIPO’s patent landscaping work, including on underlying technologies on COVID-19 vaccines, and by other relevant sources. An eligible Member may update the authorization to include other patents.

(b) An eligible Member need not require the proposed user of the patented subject matter to make efforts to obtain an authorization from the right holder for the purposes of Article 31(b).

(c) An eligible Member may waive the requirement of Article 31(f) that authorized use under Article 31 be predominantly to supply its domestic market and may allow any proportion of the authorized use to be exported to eligible Members and to supply international or regional joint initiatives that aim to ensure the equitable access of eligible Members to the COVID-19 vaccine covered by the authorization.

(d) Eligible Members shall undertake all reasonable efforts to prevent the re-exportation of the COVID-19 vaccine that has been imported into their territories under this Decision. All Members shall ensure the availability of effective legal remedies to prevent the importation into their territories of COVID-19 vaccines produced under, and diverted to their markets inconsistently with, this Decision.

(e) Determination of adequate remuneration under Article 31(h) may take account of the humanitarian and not-for- profit purpose of specific vaccine distribution programs aimed at providing equitable access to COVID-19 vaccines in order to support manufacturers in eligible Members to produce and supply these vaccines at affordable prices for eligible Members. In setting the adequate remuneration in these cases, eligible Members may take into consideration existing good practices in instances of national emergencies, pandemics, or similar circumstances. [3]

4. Nothing in Article 39.3 of the Agreement shall prevent a Member from taking measures necessary to enable the effectiveness of any authorization issued as per this Decision.

5. For purposes of transparency, as soon as possible after the adoption of the measure, an eligible Member shall communicate to the Council for TRIPS any measure related to the implementation of this Decision, including the granting of an authorization.[4]

6. An eligible Member may apply the provisions of this Decision until [3][5] years from the date of this Decision. The General Council may extend such a period taking into consideration the exceptional circumstances of the COVID-19 pandemic. The General Council will review annually the operation of this Decision.

7. Members shall not challenge any measures taken in conformity with this Decision under subparagraphs 1(b) and 1(c) of Article XXIII of the GATT 1994.

8. No later than six months from the date of this Decision, Members will decide on its extension to cover the production and distribution of COVID-19 diagnostics and therapeutics.

Footnote [1]: For the purpose of this Decision, an “eligible Member” means any developing country Member that exported less than 10 percent of world exports of COVID-19 vaccine doses in 2021.

Footnote [2]: For the purpose of this Decision, it is understood that “patented subject matter” includes ingredients and processes necessary for the manufacture of the COVID-19 vaccine.

Footnote [3]: This includes the Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical Technologies published by the WHO (WHO/TCM/2005.1).

Footnote [4]: The information provided shall include the name and address of the authorized entity, the product(s) for which the authorization has been granted and the duration of the authorization. The quantity(ies) for which the authorization has been granted and the country(ies) to which the product(s) is(are) to be supplied shall be notified as soon as possible after the information is available.

The original TRIPS waiver proposal has been vehemently opposed by some developed countries especially the EU, the UK and Switzerland.

The EU in particular has always advocated reaffirming and clarifying flexibilities under Article 31 of the TRIPS Agreement, i.e. “Other Use without authorization of the right [patent] holder” and this approach is visible in the proposed outcome.

The US while supporting an intellectual property (not just patents) waiver, has wanted it limited to vaccines.

Lori Wallach, Director of Rethink Trade at the American Economic Liberties Project, responding to the leaked proposal, said: “It seems to represent the lowest common denominator of EU fealty to Big Pharma by not waiving intellectual property monopolies and the US insistence that only vaccines be considered despite the new lifesaving treatments that President Biden spotlights as critical to dealing with COVID”, adding that “Absent substantial improvements, the current approach would fail President Biden’s righteous mission of increasing access to vaccines to end the COVID crisis.”

On the positive side, the proposed outcome clearly waives Article 31(f) of the TRIPS Agreement that conditions the use of non-voluntary license to “predominantly for the supply of the domestic market”. In 2003, the WTO agreed on a mechanism that waives that article to supply countries with insufficient manufacturing capacity.

However, this mechanism became riddled with many cumbersome procedures that have hindered its use. In waiving Article 31(f), many of these procedures are not included in the current proposed outcome.

However, waiver of Article 31(f) is the only waiver clearly provided for in the proposed outcome. In addition, some concerns with the proposed outcome remains.

The Feminists for a People’s Vaccine, in its statement, points to several concerns with respect to the text as follows:

* That in covering only “patented subject matter” and not explicitly addressing pending patent applications, whether these would “act as deterrents for developing country manufacturers looking to enter the market”.

* Conditions are attached to the use of Article 31 that have never been required by the TRIPS Agreement, such as the need for the authorization to list patents, and “this is almost impossible to achieve because the patent landscape for COVID-19 technologies are not fully known – as international patent applications are usually not published until after 18 months of filing”. Furthermore, the “patent landscape is also constantly evolving”.

* Another condition added to use of Article 31 that is not required by the TRIPS Agreement is the need to notify the TRIPS Council of the entities, products, countries and quantities for which authorization has been provided.

* That the proposed outcome appears to continue to require product-by-product authorization, adding that “freedom to operate for follow-on manufacturers continues to be hindered as it requires repeated action on the part of a government, entrenching a cumbersome process and erecting entry barriers”.

* Failure to adequately address other intellectual property barriers, in particular Article 39 which concerns protection of undisclosed information. Article 39 “is a separate barrier irrespective of patent status” and “the text does not lift protection of undisclosed information, although such information is an essential aspect for the manufacturing and supply of COVID-19 vaccines.”

“In a crisis, half measures are not acceptable. Every barrier to accessing these crucial vaccines and treatments must be cleared away. We urge (WTO) member states to return to the negotiating table and come back with a comprehensive waiver that will work to cut short this pandemic and guarantee everyone is protected,” said Max Lawson, co-chair of the People’s Vaccine Alliance.