[This post has been co-authored by Rahul Bajaj and Praharsh Gour. Rahul is an attorney at IRA Law and a former Senior Resident Fellow at Vidhi. Rahul is a Rhodes Scholar (2018) and has worked as a law clerk for Justice D. Y Chandrachud (2020-21). He has also blogged for us in the past and was the SpicyIP Fellow for 2016. Readers can access posts by Rahul here. Views expressed in the post are personal]
Since the TRIPS waiver was proposed by India and South Africa in October 2020, there was hardly any movement on operationalizing the waiver. This was in large part a function of the developed world not endorsing or outright rejecting the proposal. In a previous post, we had covered the statement made by Union Commerce and Industry Minister Piyush Goyal at the 12th Ministerial Conference of the WTO. Minister Goyal had rebuked the developed world for stalling and diluting the TRIPS waiver and for falsely portraying themselves as caring for the developing world. He had argued that the developed world had reduced the waiver to no more than a compulsory license [CLs]. And that the waiver of patent rights on COVID vaccines would be too little, too late.
While the statement by Minister Goyal rightly calls out the Developed Members to act on the Waiver, however, in context of India’s own domestic position this comes as a little bewildering. Readers may recall that right after proposing the Waiver, Centre Government took a U turn and underplayed the role of CLs to address shortage of COVID-19 treatment before the Supreme Court when it was questioned on inactions and not using TRIPS flexibilities.
Coming back to the present, on 17th June, the Ministerial Conference of the WTO issued a declaration on the waiver of TRIPS provisions relating to patent rights on COVID vaccines. The Declaration begins by noting that an Eligible Member may restrict the rights of patent holders, without the prior consent of the patent holder. Footnote 1 states that only developing countries are Eligible Members [more on this below]. The Declaration clarifies that this relaxation can only be for “authorizing the use of the subject matter of a patent required for the production and supply of COVID-19 vaccines.”
To refresh our memories, Article 31 of the TRIPS Agreement contains a set of procedural requirements that must be complied with prior to the grant of a CL. To illustrate, the proposed user is required to make efforts to obtain an authorization from a rightholder, prior to seeking a CL. Further, the authorized use under a CL has to be predominantly for the domestic market. It is significant, therefore, that para 3 of the Declaration makes the following provisions as regards patents on COVID vaccines:
- It waives the requirement of making efforts to obtain an authorization from the right holder prior to seeking a CL;
- Eligible Members are allowed to export any proportion of the products manufactured under the authorization including through international or regional joint initiatives that aim to ensure the equitable access of eligible Members to the COVID-19 vaccine covered by the authorization;
- In determining the remuneration to be paid to the right holder for granting a CL, regard may be had to : “humanitarian and not-for-profit purpose of specific vaccine distribution programs.”; and
- Data exclusivity provisions shall not operate as a bar on the rapid approval of a COVID-19 vaccine used under this decision.
The Decision does come with its set of compromises and shortcomings. For instance, as referenced earlier, footnote 1 of the Decision specifies that it can only be utilized by a Developing country Member and not the Developed ones, which generally house most of the COVID-19 vaccine manufacturers. Adding to this, the Decision “encourages” the Developing Members with capacity to manufacture COVID-19 vaccines, to opt out of this arrangement. This opt-out provision was inserted to specifically cater the needs of China, which had earlier announced its intentions to not use the Decision (also read the second last para here). This limitation on the number of Members reduces the numbers of Members who can effectively make use of the Decision. The reason for this is twofold:- first, as stated above, most of these vaccine manufacturers are either located in China or are located in other Developed Members, which fall out of the ambit of the Decision; And second, most patent applications behind these vaccines too are filed before the patent offices located in China and the US (See page no. 24 here). This means that only those patents which are filed before the patent of offices located within the jurisdiction of these eligible Members can be waived using this Decision.
Furthermore, Para 1 of the Decision restricts the unauthorized use of patents [i.e. CLs] (product and process both) to manufacture and supply of COVID-19 vaccines only. This comes as a severe albeit predicted blow (see here and here) to the rationale behind the original waiver proposal, which had a much wider scope. Specifically speaking, the outcome Decision is somewhat disappointing considering that it overlooks the role of non patent IP(s) like copyright and industrial designs in assuring equitable access to COVID-19 vaccines. It is here that Minister Goyal’s concern that we had flagged up here also assumes significance. The decision in Para 8 does mention that applicability of the Decision on COVID-19 diagnostics and therapeutics will be decided within 6 months. However, considering that it took the Members close to 2 years to come up with this compromised Decision for vaccines, it is anyone’s guess if a robust agreement on these pending issues could be reached in time.
Considering that the WTO was able to come up with a Decision is touted as a victory for multilateralism, where the decisions are made with a considerate approach, it has rightly been pointed out that the struggle has always been to enshrine an opt-in mechanism for Members to commit to higher disciplines during pressing times, which alas the Decision fails to achieve.
Where to now?
While the Decision clearly has its issues, the underlying silver lining is that it is indeed a step up from the last TRIPS amendment, which was marred with complexities and a plethora of initial formalities (see here for a long paper on it). Not only does the Declaration aim to resolve the challenges posed by patents in accessing COVID-19 vaccines, it somewhat aims to ensure that its supply remains intact by including direct exports by an eligible Member and also through joint initiatives like COVAX. The provision on data exclusivity is yet another positive, though its modalities will require further consideration. Thus, the Declaration, though delayed, does attempt to facilitate more affordable access to COVID vaccines. The ball is now in the court of the eligible Members, especially India. The Declaration offers another opportunity to re-write the inactions of the past and make the most of what is agreed upon. The question now is will action be taken, after all this?