On May 5, 2021, United States Trade Representative (“USTR”) Katherine Tai released a statement announcing the U.S. government’s support for the waiver of intellectual property (“IP”) protections for COVID-19 vaccines under the World Trade Organization (“WTO”) Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”). This announcement follows the submission in October 2020 of a proposal by India and South Africa to suspend WTO obligations relating to IP protections for a broader range of products and technologies needed to combat COVID-19, including vaccines, medicines, personal protective equipment, and ventilators, among others, “until widespread vaccination is in place globally, and the majority of the world's population has developed immunity.” The scope of the proposed waiver has significant implications for those in the health and life sciences sectors.
The U.S. announcement, which followed high-level engagement by congressional Democrats with the Biden Administration, marked an important shift in the debate surrounding the possible waiver of TRIPS obligations for pandemic-related purposes. The United States, under the Trump Administration, had previously opposed the waiver proposal by South Africa and India, and has also been a vocal opponent of other efforts undertaken by South Africa (with periodic support from China, India, Brazil, and others) to explore flexibilities in TRIPS obligations to address issues of public interest, including competition, access to medicines, and pharmaceutical pricing, among others. Other developed economies, including the European Union, Australia, Japan, and Switzerland, continue to oppose the proposal.
Questions remain as to whether a TRIPS waiver can garner the unanimous support of all WTO Members, which—based on prior WTO practice—would be necessary for the adoption of any waiver of TRIPS obligations. In an effort to advance negotiations, South Africa and India have committed to revise their proposal to incorporate comments from other WTO Members. WTO Members will convene a formal meeting to discuss the waiver on June 8-9, 2021, with informal negotiations also possible in the interim. While timing for negotiations beyond June 2021 has yet to be determined, WTO Director-General Ngozi Okonjo-Iweala has called upon WTO Members to reach an agreement on a waiver by the next WTO Ministerial Council, which is scheduled to take place November 30-December 3, 2021.
Background on the TRIPS Waiver Proposal and the U.S. Position
The original proposal submitted to the WTO TRIPS Council by India and South Africa in October 2020 recommended that the WTO General Council adopt a decision that would waive implementation, application, and enforcement of multiple Sections of Part II of the TRIPS Agreement in relation to the prevention, containment, or treatment of COVID-19. This proposal would broadly allow WTO Members to take actions that are inconsistent with TRIPS obligations relating to IP protections for copyrights, industrial designs, patents, and disclosure of information, as well any distinct obligations regarding domestic enforcement of those rights. Such a waiver would also prevent other WTO Members from enforcing those same TRIPS obligations against another Member, for any actions that fall within the scope of the waiver.
The October 2020 proposal has been discussed periodically at regular meetings of the WTO TRIPS Council, the body responsible for considering issues relating to IP at the WTO. India and South Africa have explained that the objective of their proposal is to improve access to a wide range of products used in efforts to fight the pandemic, including diagnostic kits, vaccines, medicines, personal protective equipment, and ventilators. The proponents have also specifically identified “test kit reagents, ventilator valves, N95 respirators, therapeutics, fluorescent proteins, and other technologies used in development of vaccines” as targets of the proposal. India and South Africa claim this waiver is necessary because IP protections for patents, copyrights, industrial designs, and undisclosed information or trade secrets have hampered global manufacturing efforts to combat COVID-19, and that alternatives and flexibilities already provided for under TRIPS—namely voluntary and compulsory licensing—have proven inadequate. In their view, the COVID-19 Technology Access Pool (“C-TAP”) and the ACT-Accelerator voluntary initiatives launched under the aegis of the World Health Organization (“WHO”) have not been sufficiently utilized or supported by rights-holders. South Africa in particular has specifically alleged that IP protections have been a barrier to access for particular therapeutics useful for patients with COVID-19.
The proposal by South Africa and India has received mixed reactions among WTO Members. Several WTO Members have vocally opposed the proposal, and have expressed doubt that IP protections have in any way served as a barrier to access for COVID-19 solutions. Opponents include Australia, the European Union, Japan, Norway, Switzerland, and the United Kingdom. Other WTO Members, such as Brazil, Canada, Chile, China, and Turkey, withheld at least initial support when the proposal was put forward in October 2020, but expressed a willingness to discuss the proposal further. Chinese Foreign Ministry spokesman Zhao Lijian recently stated that, “China will do all things that are conducive to developing countries’ fight against the virus and support all actions that can help developing countries acquire vaccines in an equitable way...In this context, China fully understands and is supportive of the developing world's demand for an IPR waiver for COVID-19 vaccines.”
Finally, still other WTO Members, particularly developing economies, have voiced full support for the proposal, including Argentina, Kenya, Nigeria, Pakistan, and Venezuela. As of the end of April 2021, the proposal had gained support and amassed 60 co-sponsors.
The United States, for its part, was initially among the opponents of the waiver, with the Trump Administration asserting in October 2020 that “[w]eakening IP protection and enforcement would be counterproductive to our global fight against COVID-19 through the creation of needed medical technologies and would not address the current, main challenges to access concerning manufacturing and raw material resources.” However, the Biden Administration reversed course, announcing on May 5, 2021, that the Administration would support “waiving intellectual property protections for COVID-19 vaccines.” Of note, the scope of the U.S. statement was limited to support for a waiver of IP protections for vaccines, a limitation that recent congressional testimony by USTR Tai appears to confirm. In comparison, the waiver proposal put forth by South Africa and India, in its current form, is much broader, and would target a range of medical and pharmaceutical products.
The Waiver Process at the WTO
The WTO has a specific mechanism under which WTO Members may agree to a waiver of obligations, and WTO Members have approved several waivers under this mechanism to date. WTO Members have consistently opted to approve waivers by consensus—meaning that a waiver is deemed approved only if no WTO Member objects. Several types of waivers are regularly granted, and are typically uncontroversial, while other waivers have generated significant debate and discussion among WTO Members before being approved.
A proposal to waive obligations arising under the TRIPS Agreement must first be presented to the WTO TRIPS Council, where it is considered by WTO Members. Because WTO practice requires consensus, the proposal is not put to a formal vote, but may be subject to extended discussion in an effort to secure agreement. WTO Members have previously approved waivers of IP-related obligations under the TRIPS Agreement. For example, in 2003, the WTO General Council Approved the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, which waived certain obligations under Article 31 of the TRIPS Agreement to allow WTO members to utilize compulsory licensing to export to an “eligible importing member” patented pharmaceutical products needed to address a public health problem. This waiver—adopted by consensus—was subsequently made permanent through an amendment of the TRIPS Agreement in 2005, which entered into force in 2017 following the acceptance of the amendment by two-thirds of WTO Members.
Even where a waiver is approved, it does not compel WTO Members to take any action, nor does it compel any WTO Member to make changes to its domestic laws. Therefore, only certain WTO Members may opt to exercise the waiver, while others may elect to continue to enforce domestic laws that comply with the WTO rules that have been waived. In addition, the terms of the waiver itself may also restrict the particular WTO Members that are eligible to utilize the waiver. As a result, should a TRIPS waiver ultimately be approved for COVID-19 related purposes, implementation will likely differ across WTO Members.
Next Steps for Consideration of the Waiver
At the most recent TRIPS Council meeting on April 30, 2021, WTO Members further discussed the India and South Africa waiver proposal. Following that meeting, the co-sponsors announced that they would revise their proposal to reconcile the competing views of WTO Members. TRIPS Council Chair Ambassador Dagfinn Sørli of Norway acknowledged that significant differences of opinion remained, though he expressed optimism that an agreement could ultimately be reached.
The timing and prospects for approval of the waiver remain uncertain. Many WTO Members continue to oppose any waiver, and have argued that an approach is not only unnecessary, but will do nothing to increase access to or manufacturing of COVID-19 vaccines or other technologies. This opposition may remain an obstacle to the ability of WTO Members to reach a consensus on the waiver.
The proponents of the proposal argue that a solution on the waiver proposal is needed swiftly, though several WTO Members, including the EU and the United States, have cautioned that negotiations may be lengthy. Without taking a position on the waiver proposal itself, WTO Director-General Ngozi Okonjo-Iweala has encouraged Members to begin “text-based” negotiations, urging Members to reach a deal by December in time for consideration by the WTO Ministerial Council, which meets every two years and is scheduled to convene November 30-December 3, 2021.
Relatedly, Spain is working on a separate proposal calling for the establishment of a new working group within the WTO that would explore the flexibilities already provided for in the TRIPS Agreement in preparation for future health emergencies, under a proposed “vaccines for all initiative.”
Conclusion
While the specifics of India and South Africa’s revised waiver proposal and the ultimate outcome of WTO negotiations are not yet known, companies will want to closely follow the negotiations on the scope of the waiver, keeping in mind its potential impact on their IP and ongoing efforts to bring technologies to market to help fight COVID-19. We will continue to carefully monitor these developments closely and provide guidance to clients seeking to evaluate the potential impact of the waiver proposal.
If you have any questions concerning the material discussed in this client alert, please contact the members of our International Trade practice.
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