Breakthrough on a Potential COVID-19 Intellectual Property Rights Waiver

Breakthrough on a Potential COVID-19 Intellectual Property Rights Waiver

INSIGHTi

Breakthrough on a Potential COVID-19
Intellectual Property Rights Waiver
March 25, 2022
On March 15, 2022, the United States, the European Union (EU), India, and South Africa reached
agreement on a proposed “TRIPS” patent waiver for Coronavirus Disease 2019 (COVID-19) vaccines.
The Director-General (DG) of the World Trade Organization (WTO) welcomed the compromise among
key players in the debate as a “major step forward,” but stressed the need to finalize details. The broader
WTO membership is expected to discuss the proposed agreement as WTO decisions generally are by
consensus. These developments present issues for Congress including regarding the congressional role,
COVID-19 medical incentives and global vaccine access, and U.S. trade policy in advancing intellectual
property rights (IPR).
What is TRIPS?
WTO Discussions
The 1995 World Trade Organization (WTO) Agreement on
Propelling the TRIPS waiver discussions were
Trade-Related Aspects of Intellectual Property Rights
(TRIPS) contains obligations for WTO members to protect
India and South Africa’s October 2020 proposal—
patents and other intellectual property rights (IPR). TRIPS
and revised proposal, supported by many low- and
also includes flexibilities, such as provisions for compulsory
middle-income countries—for broader IPR
licenses (CLs) of pharmaceutical patents under certain
waivers covering COVID-19-related vaccines,
conditions, and exemptions—which waivers have extended
until 2033—for least-developed members from
therapeutics, diagnostics, and other health
pharmaceutical patent obligations. Uneven global access to
products and technologies. In May 2021, the
COVID-19 vaccines and treatments distribution have
Biden Administration supported the concept of an
renewed debates over TRIPS’ balance in supporting
IPR waiver for COVID-19 vaccines; Members of
innovation and access to medicines.
Congress have supported and opposed the
Administration’s position. Some WTO members remained skeptical—the EU described existing TRIPS
flexibilities as sufficient and proposed facilitating their greater use.
The breakthrough arose from high-level talks, facilitated by the DG, among the United States, the EU,
India, and South Africa, increasing prospects for convergence. Other members generally supported these
efforts, but called for greater transparency.
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Proposed Agreement
The reported proposal—which the WTO has not published but other sources have shared—would permit
an “eligible” WTO member to temporarily authorize use of patented inventions necessary for COVID-19
vaccine production and supply, without the right holder’s consent. An eligible member would be any
developing country member that exported less than 10% of world exports of COVID-19 vaccine doses in
2021 (e.g., India and South Africa, but not China, per an international vaccine trade tracker). It could use
any instrument available in law (e.g., executive orders, emergency decrees, judicial rulings, or
administrative orders) to make the authorization; it need not have a compulsory licensing (CL) regime.
The proposed agreement would clarify or waive existing CL requirements, providing that an eligible
member, for example:
 may issue a single authorization to use multiple patented subject matter necessary for
COVID-19 vaccine production and supply. TRIPS requires CL authorization of a
patented subject matter to be considered on its individual merits.
 would not need to require the proposed patent user to first make efforts to obtain the right
holder’s consent. TRIPS generally requires such efforts for CL use, but waives them in
cases of “national emergency” or “extreme urgency,” including “public health crises.”
 may waive the general CL requirement that such authorized use be predominantly to
supply the domestic market, and allow its use for exports to eligible members and global
COVID-19 vaccine access initiatives. TRIPS allows the export of CL-covered
pharmaceuticals to countries with limited domestic manufacturing capacity.
 could take into account the “humanitarian and not-for-profit purpose of specific vaccine
distribution programs aimed at providing equitable access to COVID-19 vaccines ... at
affordable prices” and “existing good practices in instances of national emergencies,
pandemics, or similar circumstances,” in determining compensation to the right holder.
Under TRIPS, such determination is to take into account the authorization’s “economic
value.”
An eligible member would have to report measures it takes under the agreement, and take steps to prevent
the re-export of COVID-19 vaccines imported into its territory. WTO members would not be able to
challenge measures taken in conformity with the agreement.
The proposed agreement’s duration would be three or five years from its decision date, with a possible
extension. Within six months of the decision date, members would have to decide whether to extend
coverage to COVID-19 diagnostics and therapeutics.
Stakeholder Reactions
The proposed agreement has drawn concerns from waiver supporters and opponents. Pharmaceutical and
industry associations assert that it would threaten medical innovation and U.S. competitiveness; distract
from the actual challenges to increasing COVID-19 vaccine access (e.g., supply chain bottlenecks); and
undermine current licensing arrangements for global COVID-19 vaccine production and technology
transfer. Some public health advocates welcome the breakthrough but criticize it for not covering other
technologies or “technical know-how,” and not adding enough to current TRIPS flexibilities. Recent
developments, including news that a South Africa company, with World Health Organization support,
reverse-engineered the Moderna COVID-19 vaccine, add new dimensions to the debate.

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Issues for Congress
Members may continue to oversee and seek to shape the Administration’s participation and position in the
TRIPS waiver talks. Key issues include:
 Should more congressional input or approval be required before the Administration could
agree to modifying TRIPS obligations (as proposed in some pending bills)?
 How would the proposed agreement affect innovation incentives for COVID-19 vaccines
and other treatments? What would it mean for U.S. competitiveness vìs-a-vìs China,
which poses major IPR theft challenges?
 How would the proposed agreement affect global COVID-19 vaccine production and
access? Would any boost occur quickly enough to respond to the pandemic’s current
stage, or be more relevant to respond to potential future variants? What does the proposed
agreement mean for future pandemic responses?
 Is the U.S. position on this waiver particular to COVID-19 or a general policy shift as it
relates to historical U.S. positions in advancing IPR in trade agreements? How may these
issues shape potential debate on Trade Promotion Authority renewal and U.S. IPR trade
negotiating objectives?
 What would a timely COVID-19 IPR outcome—or its absence—mean for debates about
the WTO’s relevance in the changing global economy?

Author Information

Shayerah I. Akhtar

Specialist in International Trade and Finance

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