The WTO Trips Waiver: A Panacea To The Covid-19 Menace?

INTRODUCTION

Ms Ngozi Okonjo-Iweala, the Director-General of the World Trade Organization (WTO), on 28th January 2022, in a press conference of the WTO General Council announced that a breakthrough in the form of an accord between the developed and the developing nations on the TRIPs Patents waiver proposal for COVID-19 vaccines could be possible within the coming weeks. This patent waiver was first proposed by India and South Africa at the WTO TRIPS Council in October 2020 and further revised in May 2021, and support for the proposal was pitched in by 57 WTO member nations.

The revised proposal submitted by India and South Africa talks about globally waiving certain provisions of the TRIPs Agreement temporarily (three years proposedly) to facilitate the smooth transfer of “health products and technology 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.”. Proponents of the waiver say that this could help spur local production and result in the more equitable distribution of vaccines and similar COVID-19 relief resources in the lower and middle–income countries.

With the WTO making strides towards this significant development that could potentially alter the trajectory of COVID-19 containment worldwide, it becomes imperative to analyze the viability of this move in terms of what it will signify for efficient resource distribution, production and investment incentives and the global outlook towards IP protections in the future.

WHY THE OPPOSITION

The TRIPs waiver proposal attracted backlash from numerous first world countries, noticeably those of the EU, and the pharmaceutical sector, which stipulate that this move will in fact turn counterproductive and act as a hindrance towards the efficient manufacture of vaccines and technology distribution. They reject the patents waiver proposal by arguing that IP rights incentivize innovation and argue that efficient resource distribution can be achieved through alternatives such as compulsory licensing and technology transfer arrangements etc. However, proponents of the waiver point out that these alternatives are often complex and time–consuming processes not suited for battling the exigencies of the ongoing pandemic. In light of these arguments, it is necessary to look at the proven utility of patent protections in incentivizing innovation and promoting inventions.

ECONOMIC UTILITY

Although there is significant cross-industry heterogeneity, empirical evidence generally tends to support the effectiveness of patents in stimulating innovation. In surveys conducted in the United States, Europe, and Japan in the mid-1980s and 1990s, patents were reported as being extremely important in promoting inventions and protecting competitive advantages in a few industries, notably biotechnology, drugs, and chemicals.

Furthermore, patents facilitate market entry and business formation and therefore have a favorable impact on competition. Patents may also be a necessary prerequisite for entrepreneurs to get money from venture capitalists, as evidenced by the ability of small businesses to exercise their rights in front of larger corporations (Gans, Hsu, and Stern, 2002). Furthermore, patents may also help spread technology. Patenting entails making public inventions that would otherwise be kept hidden. According to industry studies, companies’ aversion to patenting their discoveries stems mostly from a concern of sharing information with competitors. This was validated in the OECD/BIAC study on patent use and perception in the business community, which was addressed to OECD enterprises.

However, patent protection can also stifle further innovation, particularly when it restricts access to important knowledge, as is the situation in growing technology sectors where progress is cumulative and foundational inventions are protected by patents. In this respect, too wide patent protection for basic ideas can deter follow-on innovators if the holder of a patent for a critical technology refuses to share it with others under acceptable terms. This is the major argument being put forth by proponents of the proposed waiver who contend that Higher Income Countries (HIC) buy and hoard large stocks of vaccines and COVID-19 relief resources in advance, thereby resulting in a paucity of resources available for the Lower and Middle Income Countries (LMIC) and the competitive advantage provided to the HIC through patent protection prevents the necessary dissemination of production information and technology.

A MIDDLE GROUND

When considering efficient resource distribution, one must look at the multitude of factors that affect the manufacturing process of the aforementioned resources. While patents do limit resource distribution to a certain extent, they are not the only hindrance to efficient resource allocation. Numerous other components such as favorable research and development infrastructure and production capacities inter alia must be factored in. While a TRIPs Patent Waiver is an idealistic solution to battling the current COVID-19 scare, it is a short sighted measure which will inevitably turn problematic in the long run. Governments need to focus on increasing and expanding their indigenous production and R&D facilities instead of seeking the easy way out of the problem through the means of a patent waiver. While the COVID-19 scare may become a thing of the past within the next few years, the advent of large-scale globalization and international relations will certainly lead to more situations of health distress in the future. Under such situations, frequently resorting to IPR waivers will adversely impact the global outlook towards IPR protections, thereby disincentivizing investments into the research facilities of large corporations, which produce the bulk of the resources in circulation, and therefore stifling innovation.

CONCLUSION

While technology transmission is important, voluntary channels are a better way to do so. Because COVID-19 medicines and vaccines are complicated biological products, the key impediments are production facilities, infrastructure, and know-how, and a patent waiver is an inappropriate response to the problem.

Waiving IP, according to John-Arne Røttingen who was just named as Norway’s Global Health Ambassador, could only aid in the production of small molecular weight substances but not in the setting up of biological production lines. Instead, he believes that individual businesses should be pressured to offer non-exclusive licenses and technology transfer for their goods, similar to the vaccination deals reached by AstraZeneca and Novavax with the Serum Institute of India.

Such measures will indeed go a long way towards strengthening the health-care setups of the LMIC, as opposed to a patent waiver, which can only be called an illusory panacea at best.

Author: Marisha Dube – a student of Gujarat National Law University, in case of any queries please contact/write back to us via email vidushi@khuranaandkhurana.com or Khurana & Khurana, Advocates and IP Attorney,

Leave a Reply

Your email address will not be published.

eight + four =

Archives

  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • September 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010