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16

JUN

2021

WTO TRIPS Waiver for COVID-19 Technologies:

What Innovative Companies Need to Know

In 1995, when the World Trade Organization (WTO) came into existence, those signing up as members agreed that in exchange for the lowering of barriers to trade, they would abide by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

In their original October 2, 2020 submission to the WTO, India and South Africa proposed waiving member countries’ TRIPS obligations to protect any patents, copyrights, industrial designs, or trade secrets (“undisclosed information”) “in relation to prevention, containment or treatment of COVID-19,” until “widespread vaccination is in place globally."

For months thereafter, the waiver proposal remained deadlocked in the WTO, largely with developing nations signing on to sponsor or support the waiver, and multiple developed nations opposing the waiver in favor of alternative approaches to increasing global vaccine equity. But on May 5, 2021, Katherine Tai from the Office of the United States Trade Representative (USTR) made the unprecedented announcement that the United States' Biden-Harris Administration supports the waiver of "intellectual property protections for COVID-19 vaccines,” and “will actively participate in text-based negotiations at the [WTO] needed to make that happen.”

Since then, international positions surrounding the waiver proposal have been evolving at a rapid pace – with new developments reported almost daily. China announced on 8 May 2021 that it would support a TRIPS waiver “that is conducive to fair access to vaccines in developing countries”; Germany expressly stated opposition to a TRIPS waiver; and the EU more broadly announced support for a “third way” alternative that includes “trade facilitation and disciplines on export restrictions,” “support for the expansion of production” (including through voluntary licensing agreements), and “clarifying and simplifying the use of compulsory licenses [under TRIPS] during crisis times.”. WTO Director-General Ngozi Okonjo-Iweala, who has supported a “third way” in recent months, now states that “we must act now to get all our ambassadors to the table to negotiate a [waiver] text.”

Notably, the US’ support for a waiver targeting “COVID-19 vaccines” differs substantially from the May 21, 2021 revised proposal submitted by India, South Africa and their 60 co-sponsors – which relates broadly to “health products and technologies … for the prevention, containment or treatment of COVID-19.” Under the sponsors’ revised proposal, WTO members would be relieved (for at least 3 years) of their TRIPS obligations to protect patents, copyrights, industrial designs and trade secrets for any “diagnostics, therapeutics, vaccines, medical devices, personal protective equipment” used in relation to preventing, containing or treating COVID-19 – as well as “their materials or components, and their methods and means of manufacture.” Notably, the revised proposal is not substantially different from the original proposal, which suggests that WTO members will likely remain divided on this controversial issue.

The next meeting of the TRIPS Council to discuss the waiver proposal is taking place on 29 June 2021, and will be closely watched. Because any TRIPS waiver would require consensus of all 164 WTO member countries, any text-based negotiations that take place would likely proceed over the course of several months or more. Given that Germany, France and other major economies are vehemently objecting to the waiver, achieving consensus (the preferred decision-making method) is highly unlikely. However, if consensus is not achieved, members may turn to voting (Article IX:1 of the GATT). Accordingly, such a vote would require consensus from 123 members, in order to successfully adopt the waiver. Using the voting mechanism might serve as a first tentative step to faster, more successful negotiations at the WTO and to increasing the global relevance of these negotiations.

The situation however remains fluid. In Brazil, the only developing country to initially oppose the waiver, the Senate has recently passed a bill to suspend Covid-19 vaccine patents. If agreeing to negotiate is a delaying tactic, other members might follow suit and simply rely on Article 73 of the TRIPS that provides an exception to obligations to protect IP rights in situations where essential security interests are at stake. This stance would fundamentally align with the EU leaders’ recent claim that vaccines (and increasing European vaccine production capacity) is a matter of security policy.

With mutations and variants of Covid-19 on our doorstep, possibly making current vaccinations less or even ineffective, it is undoubtedly in all members’ interest that negotiations start without delay and be speedily concluded.

While 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.

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