WHETHER IP RIGHTS SHOULD BE TEMPORARILY WAIVED ON COVID-19 VACCINES AND MEDICINES? – By- Aalokaa Verma

INTRODUCTION

India is suffering a second wave of Covid-19 much worse than anything witnessed since the onset of the pandemic in March 2020. The country is facing a shortage of hospital beds, oxygen and the doctors and nurses are overburdened by the constant rise of cases, each deadlier than the previous one. India is in the midst of a public health emergency, mortuaries are overflowing with the deceased and the country is not equipped with adequate infrastructure to combat the same. In addition to this, India is also facing an acute Vaccine shortage. Maharashtra,  Chhattisgarh, Odisha, Andhra Pradesh and Jharkhand are facing a shortage of vaccines, and many other states that vaccine centres report that Vaccination centres were shutting early or turning people away due to supplies running out. In light of the current crisis and vaccine shortages, India and South Africa appealed to the WTO requesting a temporary waiver of the Intellectual Property rights on Covid-19 vaccines and related supplies.  It is contended by the countries that IP rights are inhibiting the supply and production of crucial Covid-19 vaccines and medicines at an affordable price. The situation in India is critical hence it is being proposed that the WTO’s TRIPS council grants a waiver of patents, copyrights and trademarks for limiting the impact of Covid-19. If for a temporary period the IP rights are waived off, WTO member countries will not enforce their IP rights to Covid-19 related treatments. This will prevent countries such as India that are trying to rapidly manufacture vaccines from claims of illegality under WTO law. The Trade-Related Aspects of  Intellectual Property Rights (TRIPS) is a comprehensive multilateral agreement relating to intellectual property. TRIPS is a key legislative mechanism that harmonises intellectual property security by enforcing contractual commitments on member countries to meet the required degree of IP protection and compliance in their territories.   The TRIPS agreement, which is part of the World Trade Organization’s (WTO) legal framework, regulates the protection of IP rights through a mandatory and enforceable dispute resolution process. Discussion is taking place but it’s not likely for a positive outcome to emerge from it for India. The argument against waiving the rights is that IP rights encourage research and innovation, and suspending these rights will not lead to a surge in the manufacturing of the Covid-19 after all.  The TRIPS agreement does have provisions for granting a waiver of the rights of a patent holder in situations related to a person’s right to health.  This article analyses the remedies available in the agreement that can be availed in light of the current scenario.

The Legal Aspect of the TRIPS waiver

The Ministerial Conference may suspend a duty placed on a WTO member country by the WTO Agreement or any other multilateral trade agreement under “exceptional circumstances,” according to Article IX.3 of the Marrakesh Agreement establishing the WTO (or the WTO Agreement). The same article stipulates that three-quarters of the members must agree to such a waiver. As per Article IX.3 (b) If the proposal for a waiver involves the multilateral trade agreements mentioned in Annexes 1A, 1B, or 1C, the proposal must be forwarded first to the Council for Trade in Goods, Council for Trade in Services, and Council for TRIPS, respectively. In the present situation, the TRIPS Council has authority over the waiver proposal when it relates to the TRIPS Agreement. Moreover, Article IX.4 of the WTO Agreement states that the Ministerial Conference, while granting the waiver shall state the “exceptional circumstances” justifying the decision and the terms and conditions that shall govern the working of the waiver. If granted for more than a year, the waiver must have an expiration date and be assessed yearly by the Ministerial Conference.

The terms “exceptional circumstances” as used in Articles IX.3 and IX.4 of the WTO Agreement are not specified. However, the terms “exceptional circumstances” suggest that the right to suspend such commitments is intended to legalize actions taken by a government in urgent circumstances that would otherwise be illegal under WTO rules. In other words, the waiver authority enshrined in Articles IX.3 and IX.4 recognizes that there might be times when compliance with WTO norms is not possible due to unforeseen circumstances causing inconvenience to a member nation. In such a case, the WTO as an entity should legalize non-compliant measures for a limited period of time that is, before the emergency situation ends. The waiver power, on the other hand, should be used with restraint and viewed with care so that it does not become a convenient way for a country to avoid their WTO obligations.

A waiver under Articles IX.3 and IX.4 can be issued individually or jointly to a WTO member state. There are two instances of mutual waivers granted by the WTO scheme in the past. First, in 2003, certain countries were awarded a waiver from some GATT obligations in relation to steps they took to ban the sale and supply of raw diamonds or so-called “blood diamonds” to non-participant countries in the Kimberley Process Certification Scheme. Second, in response to complaints about medicine accessibility in LDCs and other developed countries without production capacity, the General Council waived the TRIPS Agreement’s Articles 31(f) and 31(h) obligations in 2003 (2003 decision). Article 31(f), which states that a compulsory license on a proprietary drug shall be given only for the domestic market, was waived for exporting nations, to the degree required for the manufacture of a prescription product and its sale to an eligible importing nation. Additional provisions apply to the manufacture and eventual export of the commodity. First, an eligible importing country that is not an LDC notifies the TRIPS Council that it lacks the manufacturing capabilities to produce the substance (or drug) in question, as well as the names and quantities required. Second, if the prescription substance is patented in the importing country’s jurisdiction, the importing country has either granted or plans to issue a compulsory authorization. Similarly, the qualifying importing country is exempt from the duty to pay remuneration to the patent holder under Article 31(h).

Other conditions must be met for the waiver to be effective the generic pharmaceutical company must manufacture only the amount required to meet the needs of the eligible importing country all medicines produced under such a license must be exported to the eligible importing country and the products manufactured under the license must be clearly identified as being in compliance with the waiver. As a result, all WTO member countries qualified for this exclusion as long as they met the criteria laid out in the 2003 ruling.

The Covid-19 global pandemic—the worst global health crisis in the last 100 years that has devastated lives all over the world and caused unprecedented economic and social destitution—undoubtedly constitutes an “exceptional circumstance” as defined under Articles IX.3 and IX.4 of the WTO Agreement. As the pandemic continues to rage, countries collectively have to find innovative ways to increase the production of vaccines and ensure their timely distribution at affordable prices. In this situation, the requirement to meet the stringent IP standards given in the TRIPS Agreement may not be feasible. There is a clear legal case to be made for a collective waiver of the kind that was granted to the countries participating in the Kimberley Process Certification Scheme.

The waiver would suspend the IP obligations on countries so that those with manufacturing capabilities could produce the Covid-19 vaccines and export them to those nations that lack the manufacturing capability without fearing a legal challenge at the WTO. Initially, the waiver may be granted for a year and can later be reviewed once again at the end of the year.

Conclusion

This year, the international community set out with the single goal of putting an end to the Covid-19 pandemic. This would only be possible if as many people the world around the world get vaccinated as soon as possible. Given the overwhelming demand, vaccine supply must be greatly expanded, supplemented by a more widespread and equitable delivery. Such a mission cannot be accomplished only by an IP waiver. Increasing vaccine production and maintaining fair access will also necessitate strengthening institutional capability in many countries, solving structural inefficiencies, and implementing the requisite administrative and legal reforms. Although countries with manufacturing capabilities may take advantage of TRIPS flexibilities such as compulsory licenses, this is not the case for countries without such capabilities, especially LDCs in Africa and Asia. The point that suspending IP rights would be a deterrent to the pharmaceutical industry is unconvincing: with the enormous demand, these businesses are guaranteed to make a profit. Furthermore, pharmaceutical firms also receive public grants and funds, including in the production of Covid-19 vaccines. As a result, it is reasonable to expect the gains to be shared with the rest of society.