Potential WTO TRIPS Waiver and COVID-19

Potential WTO TRIPS Waiver and COVID-19

INSIGHTi
Potential WTO TRIPS Waiver and COVID-19
Updated June 4, 2021
On May 5, 2021, the Biden Administration announced its support for a proposed waiver of intel ectual
property rights (IPR) obligations in the World Trade Organization (WTO) Agreement on Trade-Related
Aspects of Intel ectual Property Rights (TRIPS) for Coronavirus Disease 2019 (COVID-19) vaccines.
This is significant, given the United States’ history of advancing stronger IPR protections and
enforcement global y.
WTO TRIPS Agreement
Entering into force in 1995, TRIPS requires most WTO members to adhere to minimum standards to protect various types
of IP, and to enforce these protections through domestic procedures and remedies, as wel as provides for certain
limitations and flexibilities to these obligations. Least-developed countries are exempt from meeting substantive TRIPS
obligations general y until July 31, 2021, and pharmaceutical patent obligations until January 1, 2033. The balance struck in
TRIPS to promote innovation and other societal aims faces ongoing debate.
Some of the relevant flexibilities are that a WTO member can:

Exclude certain inventions from patentability, including if necessary to protect human health or life, and diagnostic,
therapeutic, or surgical methods for the treatment of humans.

Issue a compulsory license (CL) for a patented invention, to authorize a third party to use a patented product or
process without the patent owner’s consent under certain conditions, which may be waived in “situations of national
emergency or other circumstances of extreme urgency….” A 2005 TRIPS amendment permits a CL for the export of a
patented product; the amendment aims to address situations in which countries need the product but do not have the
domestic manufacturing capacity. One prior instance of the amendment’s use exists, although Bolivia announced it may
use it for COVID-19 vaccine imports.

Take measures in derogation of TRIPS if “necessary for the protection of its essential security interests… taken in time
of… other emergency in international relations.”
First proposed by India and South Africa in October 2020, a potential TRIPS waiver for the COVID-19
response subsequently attracted support from many low- and middle-income countries (LMICs) seeking
greater access to vaccines and other health products. The proposed waiver prompted skepticism largely
from a number of high-income countries concerned about its adverse effects on innovation incentives and
drug quality and safety. The debate intensified amid worsening COVID-19 outbreaks in South Asia and
Latin America.
On May 21, India, South Africa, and 60 other countries, seeking greater support, submitted a revised
proposal that would waive the same IPR obligations as original y proposed—copyrights, patents,
industrial designs, and undisclosed data (e.g., test data and trade secrets. The revised proposal specifies
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that the waiver would be for an initial three-year period and “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.”
While the United States changed its position to general y support an IP waiver for COVID-19 vaccines, a
number of other high-income countries appear to remain opposed or uncertain. On June 4, the European
Union proposed a global trade initiative for equitable access to COVID-19 vaccines and therapeutics that
would include facilitating the use of CLs under TRIPS.
WTO members may enter text-based negotiations on these issues. The WTO Director-General voiced
support for members to make progress on a text by July and reach agreement by the 12th WTO Ministerial
Conference (November 30 – December 3) on a “pragmatic framework that offers developing countries near
automaticity in access to health technologies, whilst also preserving incentives for research and innovation .”
Debate
Countries and stakeholders supporting the waiver argue that the large-scale morbidity (il ness) and
mortality (deaths) caused by the pandemic and its disproportionate impact on LMICs require a more
comprehensive response than al owed under the existing TRIPS flexibilities. They contend that the
conditions for invoking a CL, or the process for countries without manufacturing capabilities to obtain
patented products, is too lengthy, costly, and cumbersome to be a viable strategy for addressing domestic
manufacturing shortfal s. By contrast, suspending IPR obligations may al ow countries to authorize
producers to manufacture generic COVID-19 products and technologies likely without facing the threat of
a WTO dispute or other negative WTO consequences. U.S. advocates of the waiver also argue that since
the U.S. government, through taxpayer-funded R&D, played a key role in the development of some
COVID-19 vaccines, the IPR should be shared publicly.
Conversely, other countries, industry, and some other stakeholders argue that IPR facilitate innovation and
access to COVID-19 treatments. They point to the unprecedented speed in the development of COVID-19
vaccines and claim that the waiver would constrain their current production ability and discourage future
advances. U.S.-based stakeholders also argue the waiver would cause the United States to lose a
competitive advantage to countries such as China, which may reap the economic rewards of U.S.-
developed technology. They further claim little evidence exists to show that IPR is delaying vaccine
production and distribution, which they argue is due to other barriers such as supply chain disruptions;
lack of manufacturing capacity, know-how, and financing; and inadequate distribution networks in many
LMICs. (See this CRS In Focus on global COVID-19 vaccine distribution.)
Some stakeholders debate whether the waiver would actual y help accelerate the production and
deployment of vaccines and therapeutics. The pharmaceutical industry claims that ongoing voluntary
licensing agreements and technology transfer of COVID-19 treatments are sufficient to ensure that
enough vaccines wil be available global y by the end of 2021. Companies also doubt the ability of third-
party manufacturers to produce the vaccines. For instance, if the waiver applies only to patents, a patent
holder would not necessarily be under any obligation to transfer technological or manufacturing know -
how, which is especial y critical for the mRNA vaccines. Waiver advocates counter that voluntary licenses
are too costly and inefficient and, in some cases, rights-holders have been unwil ing to license their IPR to
vaccine-producing companies. For example, firms in Bangladesh, Canada, and Israel state they are
wil ing and able to make the vaccine save for the IPR. It is difficult to evaluate these claims , as most
licensing agreements and their terms are not public.

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Issues for Congress
Some Members of Congress voiced support and opposition to the waiver proposal in the months ahead of
and after the Administration’s announcement. Among Members, proponents may press the Administration
to negotiate an IPR waiver for COVID-19 vaccines as expeditiously as possible and/or to advocate for a
broader waiver. Opponents may encourage the Administration to consider alternative responses, such as
stronger voluntary technology transfers or increased U.S. production for export. Members may consider
proposals to require additional notifications, consultations, or explicit congressional approval before the
Administration agrees to a waiver, or impose other restrictions on the Administration’s ability to agree to
a waiver (see, for example, S.Amdt. 1975 (not adopted) to S. 1260; H.R. 3035 and companion bil in the
Senate; and H.R. 3236). They may examine related legal issues as wel (see this CRS Legal Sidebar).
Congress also may examine how a waiver could affect U.S. economic interests. In addition, Congress
may consider a potential waiver’s implications for future U.S. trade agreements, and whether it would
represent a unique position for an unprecedented pandemic, or a general shift in U.S. trade policy on IPR
as it relates to public health tools.

Author Information

Shayerah I. Akhtar
Ian F. Fergusson
Specialist in International Trade and Finance
Specialist in International Trade and Finance

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