What is the TRIPS Agreement for COVID-19 Vaccine Patents?
What is the TRIPS Agreement for COVID-19 Vaccine Patents?

What is the TRIPS Agreement for COVID-19 Vaccine Patents?

Last year, the Biden administration announced its support for a waiver of intellectual property rights to help fight the COVID-19 pandemic. Recently, the EU, India, South Africa and the United States have reached a preliminary compromise on a proposed TRIPS waiver of intellectual property rights (IP), which means that we are fast approaching a collective refrain that enforces intellectual property rights in the fight against COVID these countries within their borders. Ultimately, Wen Xie, a partner at Global IP Counselors, is of the opinion that any attempt to waive IP will be ineffective in its use. COVID patents are likely to continue to be enforced in the United States nonetheless, and TRIP’s Waiver is only destabilizing the innovative ecosystem by making intellectual property rights unpredictable globally. The NLR asks Xie to go more in depth with the various legal issues raised by the potential dispensation.

1. NLR: Can you explain the TRIPS agreement given the COVID pandemic? How will a non-uniform enforcement of the exemption affect companies, and what do they need to know about it?

XIE: Right now we are working on a leaked WTO solution to waive COVID patents1; nothing has been formalized or voted on at present. The document basically states that member states have the ability to manufacture, use, sell or import COVID-19 vaccines without the permission of the patent holder, which states that vaccine manufacturers cannot (can) make a big fuss and take someone to court on the grounds that that their patents are being infringed. One of the most important things to note is that there is a great deal of freedom of choice in this proposal – the proposal repeatedly says that Member States “must” take any of the actions allowed if this proposal ends up being adopted.

This means that the implementation of this TRIPS waiver will look different from country to country depending on how much they want to do in terms of waiving patent rights within their national jurisdictions. Countries that strongly supported this measure (namely India and South Africa2) will probably go to the full extent of what they are allowed to. They can even build production facilities for mRNA vaccines that are currently protected by the Pfizer and Moderna patents. I have no doubt that the United States or Europe will go that far, if at all. The United States may choose not to waive COVID-19 vaccine patents in the United States at all because the laws governing the grant of patent rights are under Section 35 of the United States Code and have nothing to do with TRIPS or any other international agreement. Any implementation of this exemption provided for under the President’s Treaty powers will ultimately require a legislative sanction. It is very doubtful that the administration will end up pushing for such a thing.

What seems to be really happening with this so-called “exemption” is a multilateral agreement that some developing countries will not enforce COVID vaccine patents within their borders and the WTO will not retaliate. It’s a bit like the US and Europe say to the countries that pushed for this: “Go ahead, you’re out of the hook.” But since the preliminary agreement allows member states to implement the provisions, the United States will probably does not choose to adopt it within its limits.

2. Given the global economic and human strain of the COVID pandemic, why is it important to uphold intellectual property rights to COVID-19 treatments?

In the biomedical sciences, the period of exclusivity granted by patents is crucial to cover the costs spent on reinvestment in the next round of research and development. The large pharmaceutical companies spend as much as 25% of their revenue on R&D. Here is an overview of some of the major companies in terms of their R & D expenditure in 2020:

  • Johnson & Johnson (14.8% of revenue)3
  • Roche (24.1% of turnover)4
  • Novartis (18.5% of revenue)5
  • Merck (28.3% of revenue)6
  • Pfizer (22.4% of revenue)7
  • AstraZeneca (22% of turnover)8
  • Eli Lilly (24.7% of revenue).9

Compare that with Apple, which spent 5.99% of its revenue on R&D in 2021, and Microsoft, which spent 12.32%.10

Vaccine manufacturers are for-profit companies, whether we like it or not. Pfizer, Moderna and J&J each received government funding through Operation Warp Speed ​​to encourage them to develop the COVID vaccines during the time it took place. We need to examine how much it will cost us as a society to suppress IP and thus suppress the investment incentive to continue ongoing innovation.

3. What are the legal shortcomings of the TRIPS Agreement?

One of the really bizarre aspects of TRIPS ‘”waiver” is that there is no such thing as a “TRIPS patent.” All patents have national jurisdictions. U.S. patents are issued by the United States Patent and Trademark Office under Title 35. The same applies to the process of applying for patents with all the other national patent offices – TRIPS does not play a role in the whole process. With regard to legal shortcomings, we should carefully examine what kind of jurisdiction the TRIPS Agreement will have to make patents unenforceable or unusable.

When it comes to patent rights, the TRIPS Agreement obliges its signatories to abide by the Paris Convention, which is a treaty signed in 1883. The Paris Convention was one of the first attempts to harmonize the patent system worldwide. The reason for doing this was to create a system for asserting priority and to harmonize the standards of patentability across nations so that applications can claim priority and benefit from an earlier priority date for a related application filed in another country. Priority dates are used to determine the extent of the prior art that can be used against the application when researching for novelty and transparency, which is why these dates are important.

For example, the United States and Japan are both signatories to the Paris Convention. An applicant filing with the USPTO may claim priority for a previously filed Japanese patent application filed with the Japan Patent Office under the Paris Convention. And the same can happen the other way around.

What authority does the TRIPS Agreement have for patents? I believe that TRIPS could possibly do away with the system of priority claims under the Paris Convention and subject patents to a re-examination as they lose their priority dates. But neither the TRIPS Agreement nor the Paris Convention should have anything to do with domestic patent applications filed directly with national patent offices. And more likely than not, the COVID vaccine patents were filed directly with domestic patent offices around the world, which should be completely outside the scope of the TRIPS Agreement or any other international patent rights agreement.. The priority system is used mostly by companies that are limited by their IP budget and do not yet have the budget to file for multiple patent offices internationally at once, so they postpone these applications over time and require priority for the original patent application. I doubt this is what Pfizer, Moderna and J&J did with the COVID vaccine patents.

4. What are the practical shortcomings of the TRIPS Agreement in relation to COVID?

The TRIPS exemption is unlikely to help developing countries so much in accessing cheaper COVID vaccines. In practical terms, developing countries could always have ignored Pfizer and Moderna’s patents for their vaccines without the need for a worldwide agreement to render patents unusable. Again, patents have national jurisdiction. So India, for example, can just ignore Pfizer’s Indian patent. A lot of countries have missed a robust assertion of patent rights in their national courts as agreed under international treaties without facing WTO sanctions or sanctions (see China).11 So these countries could have unilaterally treated patents as they wanted, which is already what has happened for a long time. It is very unclear why such a drastic, coordinated course is needed and why the US should be complicit in destabilizing the innovative landscape for IP stakeholders.

Another problem is to say that a developing nation decides to build production facilities to produce mRNA vaccines. Giving up patent rights does not give them access to manufacturing processes, test data, medical formulas, cell lines, and other critical data that they need. So waiving IP rights does very little in practice in terms of improving developing countries’ access to vaccines, nor will it improve their ability to manufacture or produce these vaccines on their own.

5. What are the potential long-term effects of the TRIPS Agreement related to COVID and how should companies prepare?

Both the TRIPS Agreement and the Paris Convention have provisions which oblige its signatories to recognize the domestic patent rights of foreign entities and to receive the same treatment as if the patents were owned by nationals. I think that’s what it’s really about – the TRIPS exemption is intended to give free rein to some countries that do not want to recognize the patent rights of foreign companies over products that they want more of. If this proposal is adopted, the WTO will be a collection of nations that agree to no longer recognize that foreign entities enjoy the same property rights as nationals, which is a dangerous precedent.

In the US, we have never had to make a law to say that aliens can enjoy the same property rights as citizens – it was just given under the equal protection clause, which gives both citizens and aliens the right to equal protection of the laws of the US state, where they live. You need sanctions in the United States to seize a Russian oligarch’s yacht.

Intellectual property may not be physical or tangible, but it is a right. Patents sought this right subject to the government’s promise that it would be protected in return for a complete, enabling disclosure of their inventions. There were so many alternatives that could give developing countries greater access to vaccines, such as buying the vaccines directly for them. But instead, the government has effectively given up on a promise, and the end result is that developing countries in need of vaccines will still face the same difficulties and barriers that they did before.

The opinions expressed herein are solely those of Wen Xie and any comment should be directed to the interviewee on E-mail: [email protected].


Copyright (C) GLOBAL IP Counselors, LLPNational Law Review, Volume XII, Number 105

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