Waiving IP Rights During Times of COVID: A ‘False Good Idea’

“The most likely result of the proposed waiver would be a chaotic global patchwork of national laws that would linger at various stages of national implementation for years after the end of the pandemic…. And proponents can point to no credible instances in which IP has in fact hindered the development or production of COVID-19 countermeasures.”

 – A “false good idea”: From French, “fausse bonne idée,” see e.g. France Minister for Industry Pannier-Runacher: “Remove patents on vaccines? A false good idea.”

https://depositphotos.com/2329862/stock-photo-true-false-road-sign-with.htmlOver the course of four months, close to 850 million doses of COVID-19 vaccines have been administered in over 100 countries. To the extent the unprecedented pace of research, development and manufacturing to combat the ongoing pandemic is a success, it has many fathers. But it would not have been possible without the participation of the U.S. biopharmaceutical industry and its collaboration with global partners. To ensure that developed and developing countries around the globe maintain and expand access to safe and effective COVID-19 vaccines, therapeutics and diagnostics, it is critical that the U.S. government support ongoing industry collaboration and oppose well-intentioned but counterproductive efforts to waive intellectual property (IP) rights.

Waiver Background

In early October 2020, India and South Africa requested that the World Trade Organization (WTO) suspend international protections for patents, copyrights, industrial designs, trade secrets and proprietary materials, “in relation to the prevention, containment, or treatment of COVID-19 until widespread vaccination is in place globally and the majority of the world’s population has developed immunity.” Driven by mounting frustration with the progress of global efforts to ensure that all people everywhere will have timely access to COVID-19 vaccines, many developing countries subsequently joined this request and wish to proceed to text-based negotiations. The United States, the Members of the European Union, Japan, Brazil, Chile, Singapore, the UK, Australia, Canada, and other developed countries have opposed the proposal on the grounds that it lacks justification, is infeasible, and counterproductive, amongst other reasons. Debate at the WTO continues to date, with no clear path forward.

Meanwhile, a chorus of non-governmental organizations and other groups, supported by scores of progressive Democratic Members of Congress, is urging the Biden Administration to throw its support behind South Africa’s and India’s global IP waiver proposal. They argue that such a move would help reestablish the United States as a global public health leader and unleash poor countries around the world to make their own COVID vaccines. The Biden administration is reportedly weighing these requests but has yet to reach a conclusion.

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Scope and Implementation of the Proposed IP Waiver

Before discussing what can and cannot be achieved by suspending IP rights during times of COVID, it is first necessary to get clarity about what is actually being proposed. In a nutshell, WTO members would be released from their obligation under TRIPS to grant new patents, copyrights, and protections for industrial designs, trade secrets, regulatory data, and business confidential information and materials. Member countries would also be absolved from enforcing already-existing protections, in each case for an undetermined number of years “in relation to [the] prevention, containment or treatment of COVID-19,” until “widespread vaccination is in place globally, and the majority of the world’s population has developed immunity.”

WTO member country governments would be authorized to implement this waiver in their unfettered discretion. Government action taken under cover of the proposed waiver would be exempt from the WTO dispute settlement provisions. This means that even arbitrary government conduct would basically be unreviewable, and that there would be no forum to arbitrate any resulting trade conflicts between WTO members. This is important because unlike the existing TRIPS compulsory licensing provisions, the proposed IP Waiver would not require governments to provide a specific justification for the abrogation of IP rights, compensation, or legal process for rightsholders.

It should be clear from the foregoing that there are many practical problems with this proposal:

  • Even if it were to pass out of the WTO, the waiver would still have to be implemented under the national laws of the WTO member countries. No explanation has been provided as to how up to 164 countries would be expected to quickly amend multiple statutes in their legal codes, or which form these amendments would take. Curiously, close to half of the waiver-supporting countries are already exempt from TRIPS anyway, and are effectively demanding to be free of rules that don’t apply to them.The most likely result of the proposed waiver would be a chaotic global patchwork of national laws that would linger at various stages of national implementation for years after the end of the pandemic.
  • Due to the breadth and vagueness of the proposal, it would be impossible for IP rightholders to understand which products or services would lose IP protection in which country, or for how long – and little faith can be had in assurances that a waiver would be targeted and time-limited. Especially with regard to the critical category of trade secret or proprietary information, manufacturing know-how, clinical regulatory data packages and proprietary cell lines and other biological materials that are proposed to be shared, the waiver would in no way be time-limited. Proprietary information and materials cannot be un-disclosed or un-shared once they have been made public; they would simply lose their protection forever.
  • One wonders whether Congressional proponents of the TRIPS Waiver have given any thought as to how it could be implemented in U.S. law. There is no mechanism in U.S. law for simply waiving vested IP rights. Amendments to the federal patent, copyright, food and drug, and other federal statutes would need to be attempted; trade secret protections under 50 state laws overridden; and the waiver’s interference with the IP and confidentiality provisions of myriad existing private contracts would need to be sorted out. As a result, the Federal Government would have to assume unforeseeable and potentially colossal financial liability. And because the waiver is intended for the benefit of foreign developing nations, the legality of any attempt at U.S. domestic implementation would be doubtful, as Congress has no authority to expropriate U.S. property to benefit foreign countries. It is of course possible that Congressional proponents of the waiver are merely engaging in virtue-signaling, without any intention of ever implementing anything. But nonetheless, the waiver is certain to invite similar legislative train wrecks in other countries that aspire to the rule of law, and it is perplexing how little forethought seems to have gone into the proposal.

The Proposed Waiver is Unlikely to Help the Fight Against the Pandemic

To begin with, one would think, the burden of establishing the need for such an extreme and disruptive measure should be on its proponents. Yet, in the face of unprecedented progress towards COVID vaccines, tests and treatments in record time, the waiver proponents can point to no credible instances in which IP has in fact hindered the development or production of COVID-19 countermeasures. Readers should judge for themselves by perusing the joint South African/Indian TRIPS Council submission purporting to demonstrate such IP barriers. Even cursory inspection shows that this proof consists of a number of pending patent applications, a handful of patents that haven’t been asserted, a few statements by politicians, and historical narratives having nothing to do with COVID-19. There have been a few instances of patent litigation, but none to block or delay COVID products. Interestingly, royalty-free licenses by drug originators to dozens of manufacturers in developing countries are counted as IP barriers to access.

Perhaps recognizing the lack of affirmative proof supporting the need for a COVID IP waiver, proponents are increasingly trying to shift the burden to those who oppose the waiver, maybe best exemplified by World Health Organization Director General Tedros Ghebreyesus’ stance: “if not now, then when would a WTO waiver ever be justified?” Yet this is a poor substitute for an actual rationale, especially when the TRIPS Agreement and its addenda are already replete with IP flexibilities that have been justified for both national and multilateral use on the ground that they will be necessary in a public health emergency. The same proponents who have for decades with significant traction argued for an ever-growing expansion of these flexibilities now say that it is not worth even trying to use them; only the effective abrogation of all IP rights in relation to COVID-19 would be a quick enough measure to deal with the present crisis while it lasts.

However, the proposed blanket suspension of IP rights is no quick fix for the pandemic, as it is unlikely to accelerate the delivery of COVID-19 vaccines. Waiver proponents have been unable to document the existence of idle global COVID vaccine manufacturing capacity that could be unleashed by suspending IP rights. Existing capacity to produce traditional vaccines with conventional manufacturing technology simply cannot quickly or easily be converted to produce the advanced COVID-19 vaccines currently deployed. Thus, developing country manufacturers that currently make e.g. diphtheria, yellow fever, or tetanus vaccines, cannot simply be re-tooled to make the high-end mRNA or vectored COVID vaccines we are eagerly waiting for. Very different facilities will be needed, and getting these built, certified, and operational will take time, money, and precious expertise.

Waiver proponents also seem to forget that someone must keep making the whooping cough, polio, MMR, and other childhood vaccines against diseases that kill more children in the developing world than COVID ever will. Current global need for non-COVID vaccines is estimated at 3.5-5.5 billion doses per year, and those who talk about using existing capacity must realize that we cannot convert current manufacturing away from these critically-important products. On top of that, an estimated 14 billion doses of COVID vaccines will be needed globally. As GAVI – The Vaccine Alliance explains, it was always clear that demand for COVID vaccines would be high, immediate, and impossible to meet in the short term.

This is no fault of the IP system. Vaccine manufacturing processes are complex, require specific know-how and equipment, and just cannot happen overnight. Some COVID-19 vaccines involve new technologies, such as mRNA and lipid nanoparticle encapsulation, for which no large-scale manufacturing facilities or copious raw materials existed at the outset of the pandemic. The worldwide capacity to build or convert new plants is likewise limited, specialized manufacturing equipment is difficult or impossible to source, and none of this is or was ever going to be achievable within a few months as the proponents of the TRIPS waiver assert. Not even counting the time it takes to construct and equip a new plant, just the regulatory certification of a completed new facility takes several months before it can begin commercial production, and the manufacture and quality control of a single batch of COVID-19 vaccine takes 3-4 months before it can be released. Anywhere between 100 and 1,000 quality controls are done at each step of the manufacturing process. Those who argue that an IP waiver would enable the free flow of COVID vaccines within months are raising impossible expectations.

Accordingly, the Developing Countries Vaccine Manufacturers Network (DCVMN), which pushes for more manufacturing in poorer nations, agrees that giving away IP is not the answer. The CEO of India’s SII (“the guys who make more jabs than anyone”) agrees, stating that neither IP nor the lack of licensed manufacturing is the issue.

Granted, it is nonetheless possible – perhaps even likely – that some additional available capacity may indeed exist to perform certain steps of the manufacturing processes for some types of COVID vaccines. It will be important to identify and inventory such capacity, but it must be understood that it may be situated at points in the manufacturing and supply chain where it is not yet needed because the bottlenecks are elsewhere. Proverbially, it won’t do much good to, for example, take yet more fill-and-finish plants or packaging-and-labeling facilities under contract if there is not enough bulk vaccine to fill, no glass vials to fill it into, and no syringes to administer it with.

That said, vaccine producers are expanding their global supply and manufacturing chains as rapidly as possible, including by partnering with the most qualified producers in the global South, with more than 260 COVID vaccine manufacturing and production deals being on record around the world as of March 2021. As reported at the March 8 Chatham House global COVID vaccine supply chain and manufacturing summit, global production of COVID vaccines until the end of 2021 is projected to fall into the range of about 9.5 billion doses, nominally enough to vaccinate all of the world’s vulnerable populations and make a major dent into the world’s overall adult population. Under optimistic assumptions that all will go well, this would still leave a shortfall of about 2-3 billion doses. Nobody ever said that this would be easy – to close this gap, it will be all the more important that we stick to rational policies and reject irresponsible proposals that will do more harm than good.

Changing Narratives Unmask the Real Goal

There is another aspect of this waiver debate that requires special mention because it goes to the heart of what is actually being demanded. Even the most IP-hostile nongovernmental groups have come to understand that just suspending patent rights will not magically make more vaccines appear and have been adjusting and refining their narratives and demands as work towards COVID vaccines progressed. There has been a clear pivot away from early narratives in the spring of 2020, according to which rightholders were feared to use their patents to actively prevent others from developing or providing COVID countermeasures. When these concerns failed to materialize, and vaccines and therapeutics manifestly advanced towards real-world use and began to be licensed among different manufacturers in the fall of 2020, calls changed to demands for transparency, suspicions of profiteering, and general distrust whether vaccine-producing companies would ever work in the public interest. Voluntary licensing of vaccine manufacturing technology to other manufacturers to increase supply for the developing world was recast as exclusionary conduct, undertaken to merely “block” access in non-licensed territories.

In the latest iteration, IP-hostile nongovernmental groups have basically moved past patents. They are now claiming that vaccine originator companies are per se obstructing the global fight against the pandemic unless they agree to the unrestricted transfer of their manufacturing know-how, blueprints, cell lines, formulas, media, procedures and data to anyone who asks. In this way, waiver proponents seek to pave the way for compulsory technology transfer by which governments would be empowered to “share regulators’ data on manufacturing methods, and to enter industrial complexes to access additional information, data, and biologic resources.”

It is clear from all this that the COVID pandemic is being used as a cover narrative to argue for a quantum leap in the debate over IP and public health. Taking away or denying patent rights would no longer be enough. Affirmative expropriation and the forced transfer of industrial property is taking its place on the NGO agenda – at least with respect to vaccine originator companies from North America and Western Europe. It is unclear why, but no nongovernmental group is demanding access to Russian, Chinese or Indian COVID vaccine technology, even though there is no strong reason to be dismissive of it. But ironically, not even such extreme demands are likely to do much to accelerate the global fight against the pandemic. Expectations that manufacturers around the world could “freely” and independently make versions of existing COVID-19 vaccines within months are simply unrealistic. There is no such thing as a “generic vaccine” as some waiver proponents expect. Any resulting products would inevitably differ in quality, safety, and efficacy, and will not be approvable without running new expensive and time-consuming clinical trials. This inefficiency would be exacerbated by the diversion of scarce raw materials away from up-and-running manufacturers to inexperienced producers who are doing this for the first time, at lower efficiency, at least initially, often in regions that lack biological manufacturing infrastructure. Such supply diversions and inefficiencies will only make it harder to maintain current global vaccine production, and worldwide COVID vaccine output will decline, not grow.

This is part 1 of a two-part post. Part 2 will explain why the proposal is a stalking horse for changing the global rules of trade in ways that have nothing to do with the pandemic and that will do more harm than good.

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37 comments so far.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    May 4, 2021 03:43 pm

    See today’s letter to the USTR from House Republicans on the House Judiciary Committee on alternatives to the COVID TRIPS Waiver.

  • [Avatar for Anon]
    Anon
    May 4, 2021 12:40 pm

    Another good crossover (nice posts by xtian): https://patentlyo.com/patent/2021/04/interested-thoughts-thread.html

  • [Avatar for Anon]
    Anon
    May 2, 2021 04:28 pm

    Ah thanks, BP,

    Yes, I do agree that “actually solves the problem” is in fact very much the key (and the key between a placid waiver of a few patents and the full blown actual capability of RNA technology).

  • [Avatar for BP]
    BP
    May 2, 2021 02:44 pm

    Sorry about that, “emergency” is a problem, burden means showing that the sought after waiver solves that problem.

  • [Avatar for Anon]
    Anon
    May 1, 2021 10:21 pm

    More specificity/evidence should be demanded of those seeking to “waive” IPRs (Ron’s ITC cites help on that point.

    Ok – I can see that.

    The burden should be high, “emergency” does not substitute for meeting the burden.

    I have no idea what that means.

  • [Avatar for BP]
    BP
    May 1, 2021 03:28 pm

    I find it odd that arguments need to be made against the proposed “waiver” given its political nature and, if the US agrees, it will be a political decision. If it were not political, there would be a very short list of specific patents (pre-pandemic) linked to likely outcomes. And, if those outcomes were not realized, maybe damages (skin in the game)? If country X can afford to have a state-backed bank loan billions, unsecured, to a fraudulent domestic corporation, why can’t country X afford to negotiate licenses? (I say that in recognition of the US’s history of bailing out bad banks too.) More specificity/evidence should be demanded of those seeking to “waive” IPRs (Ron’s ITC cites help on that point). The burden should be high, “emergency” does not substitute for meeting the burden. Further, where the US government has rights in certain US patents (e.g., due to funding), voluntary licensing by the US government rather than “waiver” is an option: “the Government receives a ‘nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world’.” If the US wants to help, there’s much it can do without agreeing to the politically motivated “waiver”.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 27, 2021 10:55 pm

    Greg,
    I meant the TRIPS waiver combined with its implementation (or country’s action pursuant to its authority) at the national level, as one item — an effective waiver permitting that country to appropriate the IP within its jurisdiction.

    My point was to draw a distinction between that bundle of appropriated IP rights within that country under a TRIPS waiver and the USITC public interest exceptions (“waiver”) to exclusion orders operating only at our borders but not in domestic commerce. Despite this major distinction, I thought the ITC considerations that lead to that limited IP “waiver” is instructive in our present discussion.

  • [Avatar for Greg DeLassus]
    Greg DeLassus
    April 27, 2021 10:32 pm

    Thanks, Ron, for the clarification. I confess, however, that I am actually less clear now about what you mean to say. There are two waivers to be considered in this situation: (1) the TRIPS waiver; and (2) national waivers.

    The TRIPS waiver cannot be enforced in national courts. Only the WTO has jurisdiction to adjudicate disputes concerning the TRIPS waiver. Meanwhile, national courts can only adjudicate IP waivers promulgated by their respective legislatures.

    To speak of “TRIPS waiver regimes… hav[ing] absolute legal force across all tribunals enforcing the respective national IP rights,” is a contradiction in terms, as that formulation imagines an impossible world in which national tribunals adjudicate (and are bound by) TRIPS waivers. I would, of course, be obliged if you could clarify, so that I could better understand the point you mean to convey.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 27, 2021 07:59 pm

    Greg,
    I probably should have been clearer, as you apparently misread my comment, which is:
    “TRIPS waiver regimes, which would have absolute legal force across all tribunals enforcing the respective national IP rights.”

    “Respective national” is in “respect” to the “nation” in which the waiver is enforced. So this means all tribunals that enforce the national IP rights in India, for example. I did not say “enforcing international IP rights,” which arguably would cover the U.S.

  • [Avatar for Greg DeLassus]
    Greg DeLassus
    April 27, 2021 05:32 pm

    “TRIPS waiver regimes… would have absolute legal force across all tribunals enforcing the respective national IP rights.”

    This is not true. If the WTO were to grant a TRIPS waiver, this would not compel (e.g.) U.S. courts to suspend enforcement of U.S. patent rights. All that a TRIPS waiver would achieve would be to ensure that if (e.g.) Indian courts were to suspend enforcement of Indian patents, then the other WTO signatories courts not get the WTO to impose sanctions for India’s TRIPS violation.

    If you think that I am wrong about this, try to cite me the treaty provisions that prove the contrary. I guarantee that you cannot cite any such treaty provisions, because they do not exist.

  • [Avatar for Anon]
    Anon
    April 26, 2021 07:45 am

    Ron,

    We are indeed getting close (but you are still off), in that finally someone has put some close (albeit distinguishable) suggestions up for comparison.

    As you clearly have put some meaningful thought into your view, I will take some time and review your comments and your 2019 writing.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 24, 2021 07:03 pm

    Anon,
    I am sorry that it takes us so many iterations to even agree on what constitutes an answer. I hope this iteration helps us converge. You state: It has never been my intention as to mere request must equal a grant. Where would you get such a strawman?
    It is not a strawman – read your answer @ 23 to the question of what emergency would warrant a waiver (my emphasis): The answer – short and direct – is that it is only up to the Sovereign to declare the emergency” — that there is no role for any other entity. The question, however, was not under what circumstances can a Sovereign request a waiver. You can walk back your answer and retract its designation as being “direct,” but please do not characterize my analysis @22 of your “answer” as a “strawman.”

    You admit that in fact you do not have an answer: “perhaps when I see another cogent answer to my question, you might see that.” Fair enough. You correctly focus on what would warrant a waiver by repeating your question “Is the level of severity of a once in a century global pandemic — in and of itself — the type of thing to which waiver would warrant consideration?” This is a question that may have no answer as posed. Just because a global adverse event is extremely rare does not mean it is a true “emergency.” More specification is required. I gave you a responsive answer @16 with more specification for severity based on the kind of “emergency” measures that the Sovereign applies. I stand by it as a responsive answer. That said, let me now attempt another constructive approach by a comparison to what our own international trade statutes consider as types of national “emergencies” that warrant IP rights’ “waiver” at the border, excusing importation of infringing goods. The relevance should be clear from what follows.

    The U.S. International Trade Commission’s (“ITC”) enforcement of Section 337 of the Tariff Act protects our domestic industries from unfair competitive acts in the importation of goods into the U.S. that infringe on U.S. IP rights. The ITC issues an exclusion order preventing importation of the goods upon finding a violation of Section 337 — when the imported good infringes on a valid IP right covering a domestic industry. 19 U.S.C. § 1337(d)(1). The statute further provides for an exception–a “waiver” from the enforcement of the exclusion order when the ITC determines that any of four public interest factors outweigh the national interest in enforcing the IP rights at the border. Those four public interest factors are: (1) public health and welfare, (2) competitive conditions in the U.S. economy, (3) the production of like or directly competitive articles in the U.S., and (4) U.S. consumers. See 19 U.S.C. §§ 1337(d)(1), (e)(1), (f)(1), and (g)(1). Through its existence for more than four decades and nearly 1,300 investigations under Section 337, the ITC invoked the public interest exception only four times, three of which relied on the public health and welfare factor. See Ron D. Katznelson, “The Burden of Proof for Invoking the Public Interest Exception to ITC Exclusion Orders Under Section 337,” at 25 (2019). Available at https://ssrn.com/abstract=3449200.

    It is instructive to review those three cases and the rationale the ITC applied in invoking the exceptions because it informs how a trade matter involving a waiver of IP protection is applied in the public interest by our own government, who is thereby willing to attenuate our own U.S. IP rights. In one case, the ITC declined to issue an exclusion order barring importation of specialized hospital beds for burn victims where there were no therapeutically comparable beds available in the U.S. and the domestic producer of the beds could not meet demand. Certain Fluidized Supporting Apparatus, Inv. No. 337-TA-182/188, Pub. 1667 at 23-24 (USITC October 5, 1984). In another case, the ITC declined to exclude acceleration tubes used in basic research due to lack of “availability of tubes essential to research programs affecting the public health and welfare.” Certain Inclined-Field Acceleration Tubes, Inv. No. 337-TA-67, Pub. 1119 at 30 (USITC Dec. 29, 1980). In the third case, the ITC did issue an exclusion order but it grandfathered an exception to ensure availability of handset localization technology to public safety personnel. Certain Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips, and Prods. Containing Same, Including Cellular Telephone Handsets, Inv. No. 337-TA-543, Pub. 4258 at 150-151 (USITC June 19, 2007) (Final).

    The common theme in these cases is that exceptions (“waivers”) are rare, narrowly applied, and are made on the basis of unavoidable impediments to product availability — not on the basis of lack of cost “affordability.” While the modality and reasoning of the ITC “waiver” is instructive here, I caution that these threshold criteria cannot be directly adaptable to the TRIPS waiver regimes, which would have absolute legal force across all tribunals enforcing the respective national IP rights. In contrast, ITC “waivers” of exclusion orders are much less intrusive as they apply only at the U.S. border for imports — not for domestic commerce — and because ITC decisions have no preclusive effect in U.S. district courts. Texas Instruments Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1569 (Fed. Cir. 1996). The affected IP owner thus fully retains enforcement rights for legal damage awards and for equitable relief in U.S. Article III courts against infringement. The application of ITC exceptions to exclusion orders is therefore a much weaker “waiver” than the TRIPS waiver. Moreover, no waiver under TRIPS is required for other countries to enact statutes similar to our Section 337 to waive IP rights’ enforcement at their own border.

  • [Avatar for BP]
    BP
    April 24, 2021 02:00 pm

    Thank you Anon and Ron, I appreciate the detailed conversation, informative and on topic.

    As Ron stated: the “parade of horribles” is now inflicted on American consumers who are forced to subsidize through higher domestic drug prices [caused by] these foreign price caps

    I’ve had health insurance under two different systems, Europe and the US. In the US, BCBS recently agreed to pay $2.67 billion in a MDL anti-trust settlement. I paid $1,300 per month for a super gold BCBS plan in one state while in another state, at even $2,400 per month, that type of plan is not available (same BCBS parent). Settled on silver for $2,000 per month. Do the math: 12*$2,000 = $24,000 per year. After four years, about $100,000 for premiums alone (not including deductibles, co-pays, etc.).

    If I don’t use that health insurance, where does the $100,000 go?

    I believe in strong IPRs and I’d like to see how much of my $2,000 per month is directed to promoting innovation as opposed to enriching health insurance executives.

    To know true costs, we need transparency. Only then can we iron out the distortions that are putting the IPR framework at risk.

    Some are treating the pandemic like a card game.

  • [Avatar for Anon]
    Anon
    April 24, 2021 08:18 am

    Ron,

    It has never been my intention as to mere request must equal a grant.

    Where would you get such a strawman?

    As to “not answering my own question,” well, perhaps when I see another cogent answer to my question, you might see that.

    Think of it this way: Is the level of severity of a once in a century global pandemic — in and of itself — the type of thing to which waiver would warrant consideration?

    If waiver for this level event does not rise to consideration, what in the world would?

    The mantra that I have seen (with plenty of secondary considerations seeking to deny even consideration), yields the presence of waiver to be an illusions – a nullity – something to which no event EVER would reach ‘enough.’

    What would BE enough, then?

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 23, 2021 10:40 pm

    We are getting closer, but you still do not answer the question. Anon @ 21: “it is only up to the Sovereign to declare the emergency.” Sure, the Sovereign may declare an emergency, but the General Council may not necessarily grant the waiver. Sorry — yours is not an answer to what constitutes an emergency that warrants a TRIPS waiver.

    You have a valid point that nations are restrained from declaring emergencies given the ramifications (including comity) of doing so – that this self-regulates against unjustified declarations of emergency. But is it your contention that such declaration when made by a nation must compel the grant of the waiver? — If so, why does the TRIPS rule for a waiver require the vote and approval of the General Council?

  • [Avatar for Anon]
    Anon
    April 23, 2021 03:50 pm

    The answer – short and direct – is that it is only up to the Sovereign to declare the emergency.

    Yes, there are ramifications (including comity) that a Sovereign most likely will identify and deliberate upon – which is most likely a restraining force for India and its penchant for forced or compulsory licensing.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 23, 2021 03:03 pm

    Anon,
    Your question was “what exactly WOULD BE an emergency.” A question is a question. It may be answered in different ways from different perspectives. I answered by describing the attributes of the scenarios that would constitute an emergency. Contrary to your protestation above, it is an answer to your question — it is not a pivot to a different question. I answered your question in my way. You apparently want me to answer your question in your way. I am not you — only you can answer the question in your way. Note that you have persistently caused three people here to spend time in repeated exchanges with you in good faith on a question that you have propounded, that you have thought about, and that you have never attempted to answer yourself. Surely, you must have an answer that satisfies your “non-pivoting” criteria. Will you dignify us by refraining from “hide the peanut” games and provide your own answer to your question in your way? When you do, we may have something to talk about.

  • [Avatar for Anon]
    Anon
    April 23, 2021 06:31 am

    You may not like my answer, but it is an ANSWER to your question nonetheless.”

    No. It is not.

    It is not because while you START (putatively) with looking at the choice as BEING a choice of the Sovereign, your thrust pivots and changes to look at the effects from a NON-Sovereign vantage point.

    My (actual) question really is a simple and direct question. And the attempt to hijack that question with pivoting about any and all other concerns does NOT answer my question.

    As I noted at post 7, “By no means is this point that I raise dispositive of the entirety of the issue,” and the additional (NON-Sovereign) effects are certainly issues that can be added to the discussion, the attempt to pivot to THOSE items as the driver moves the question from being MY question to being a different question.

    It is NOT that I do not like your “answer” to my question. I do not like the pivot to a question that is not my question.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 22, 2021 06:44 pm

    Anon @17: “I dismissed Moocow’s answer (and in large part yours here as reflecting the same identified error) because the waiver question (my question) is simply NOT from the perspective of the rights holder.” You also explained that “it IS the government that enacts that waiver (and not the IP rights holder).” But my answer specifically focused on the government’s waiver action and its scope — not on the IP rights holder. My answer is clearly from the “perspective of the Sovereign” and not from that of the IP rights holder, as my proposed criteria test only whether the Sovereign applies confiscatory measures non-discriminately. Characterizing my test criteria as requiring a “parade of horribles” merely goes to the degree of that which constitutes an “emergency,” with which you apparently disagree. You may not like my answer, but it is an ANSWER to your question nonetheless. There are those who are content with inflicting the “parade of horribles” only on IP assets when declaring “emergencies,” conveniently skirting the robust scrutiny and objection of all other stakeholders in the medical supply chain.

    Let there be no doubt — a grant of the TRIPS waiver will be subsidized mostly by American consumers. To a great extent, singling out pharmaceutical IP Assets for adverse treatment in the medical supply chain is already happening without TRIPS waivers in many countries through their intrusive drug price caps. This includes Japan, Korea, Canada, Australia, Germany, France, UK, China, Brazil, India, and Turkey, just to name a few. So the “parade of horribles” is now inflicted on American consumers who are forced to subsidize through higher domestic drug prices these foreign price caps, as the pharmaceutical companies seem powerless to fight these price controls globally. Had pharmaceutical companies properly used the argument as above, that confiscatory price caps ought to be non-discriminatory and borne by all entities across the medical supply chain, they would have likely created local alliances and stakeholders’ objections to such price caps to fend much of them off.

  • [Avatar for Anon]
    Anon
    April 22, 2021 01:06 pm

    Ron,

    I dismissed Moocow’s answer (and in large part yours here as reflecting the same identified error) because the waiver question (my question) is simply NOT from the perspective of the rights holder.

    Is “money” at play? Sure, I can see that such may well indeed be a driver.

    That, though, simply does not change the necessary perspective, and — like Moocow — you are at bottom not answering MY question.

    I would also point out that to answer your different question (with its different perspective), the resulting “parade of horribles” would universally apply to ANY waiver, and thus make waiver essentially a nullity.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 21, 2021 10:11 pm

    Anon @4, 10, 14:
    “Looking at this from the Sovereign’s view (as opposed to the rights holder’s view),” your point appears to be as follows: the TRIPS’ framework provides within its rules a procedure for seeking a waiver of its provisions — the waiver request on COVID was ostensibly made pursuant to a contractual expectation of the signatory countries that extreme circumstance may arise to warrant a waiver. As I understand it, your question is: “what then should be the attributes of the emergency circumstances under which such a waiver would be warranted, regardless of the present COVID situation?” You contend this was not really answered, and that the “5G answer” by Xtian @9 can be seen as mere pretext. You also dismiss an answer relying on market indicia, proposed in another thread by Moscow — that when “IP is an obstacle that, absent a waiver, is holding up vaccine access,” a waiver may be warranted. You point out that this too is not an answer to your question because it says nothing about what “exactly WOULD BE an emergency” that opens the door for even considering market indicia such as Moscow proposed.

    I will attempt an answer that at least provides the contours of the attributes of emergency circumstances under which a waiver may be warranted in the context of that sought in the COVID case. First note that the India/South Africa waiver request formally gives (at 3) the reason therefor as “the need for unimpeded and timely access to affordable medical products including diagnostic kits, vaccines, medicines, personal protective equipment and ventilators for a rapid and effective response to the COVID-19 pandemic.” (My emphasis). The term “affordable” is the key here, implying that the “emergency” circumstance is because these nations cannot financially afford to secure such supplies. We know it is about the money because nations that can afford it, are getting properly supplied. For example, Israel leads the world in the share of its vaccinated population because it secured the largest number of vaccine doses per capita by offering Pfizer a premiumpaying the drug company twice its asking price per dose.

    Ostensibly, inability to secure supplies at “affordable” cost is the reason these nations invoked the TRIPS waiver. Nations petitioning for the waiver have a right to claim such circumstances as rising to an emergency level, a claim which may be acceptable. However, whether other nations should be bound to accept it will depend on whether petitioners’ behavior and other actions pertaining to the costs of such supplies are consistent with it being a true “emergency.”

    The COVID medical costs include the costs within the full supply chain and the administration of the medicines and vaccines. This includes not only the costs of IP but also the costs of raw materials, ingredients used to make the vaccines, instruments, transport refrigeration equipment, diagnostic kits, personal protective equipment, and ventilators. Each of these cost components entail the costs of assets that are conveyed to the COVID treating facilities at market prices.

    The waiver would enable the appropriation of the IP assets in a confiscatory move. The confiscation of IP assets would be justified by the “emergency” circumstances in the nation — otherwise no waiver would be necessary. The scope of the TRIPS waiver of IP rights is not limited merely to patents — it also includes trade-secret protected manufacturing know-how, data, recipes for biologic resources, cell lines, formulas, media, procedures, copyright and industrial designs. In other words, this would be a confiscatory technology transfer.

    And therein comes the test of a TRUE “emergency:” do the nations invoking the waiver also propose to apply confiscatory policy across all assets in the COVID treatment chain? Do they propose to compel vendors and suppliers to deliver on confiscatory terms the raw materials, ingredients used to make the vaccines, instruments, transport refrigeration equipment, diagnostic kits, personal protective equipment and ventilators? After all, they all affect “affordability.” In other words, are non-discriminatory confiscatory terms proposed across the board, or are IP assets selectively singled out for confiscation? Only when a nation applies non-discriminatory and broad confiscatory terms on COVID suppliers, the circumstances may be presumptively considered a genuine “Emergency.” And that is my answer, Anon.

    Any argument pushing back on this definition of “Emergency” and justifying the exemption for non-IP assets in the supply chain from confiscatory terms because it would result in their depletion with no replenishment, is not a persuasive argument. This is because that is exactly what would also happen after COVID IP assets are confiscated — IP owners would cease to invest in R&D to “replenish” the IP assets and supply new vaccines required to counter the inevitable new strains or mutations.

  • [Avatar for Anon]
    Anon
    April 21, 2021 12:43 pm

    BP,

    This just popped up on my newsfeed:

    https://www.wsj.com/articles/brazils-climate-overture-to-biden-pay-us-not-to-raze-amazon-11618997400

  • [Avatar for Anon]
    Anon
    April 21, 2021 12:18 pm

    Well Xtain,

    Perhaps we agree more than we disagree (in certain respects).

    One aspect that tends to keep things in check as regards a Sovereign Willy-nilly declaring things to be “emergencies” for the sake of invoking waiver is comity.

    Were the US (or any Sovereign) seek to “game” the invocation of waiver for emergency, when such was more a self-designated Sovereign-Only gain situation is that other nations would turn around and do the same.

    Which draws back to the very thrust of my question: if not COVID as an item of “TRUE” emergency, then WHAT?

    Your reply of “5G” is at least a reply. No one else has even bothered.

    If a Sovereign were truly to regard “5G” as a national emergency to which it invoked waiver, then it DOES have that power (under its writing of waiver). It would be up to the response of nations (under their reciprocal powers of Sovereignty and their views of what constitutes emergency to respond within the constraints of what those Sovereigns have enacted FOR invoking waiver.

    This is nothing more (and nothing less) than the Rule of Law.

    None of this though detracts from the plain fact that it is a Nation (and not a rights holder) that the Rule of Law of waiver pertains to as the decision maker.

  • [Avatar for Xtian]
    Xtian
    April 21, 2021 08:27 am

    @Anon – OK I got your viewpoint. I don’t see 5G being an extreme example. Why? If a nation can define what an emergency is, then that nation has every right to seek a waiver for whatever emergency it deems. And I think that’s where you and I part ways.

    Notwithstanding the definition of emergency, I fundamentally do not believe any country has to obligation to aide any other nation. I am not my brother’s keeper. At home or aboard. Everyone stands on their own two feet. I understand this is a very nationalistic view and I am unapologetic in it. Why? Because we (the world) hold vastly different belief systems and no country will act in an altruistic manner unless it serves the best interest of its citizens.

    My view stems from a very cynical read of other nation’s behavior. As someone pointed out in this thread or another thread, India’s actions appear inconsistent. It seeks a waiver, but will not export vaccine.

    However, if you could convince every nation in the world to act consistent with your premise, we may be better off.

    Thanks for the discussion.

  • [Avatar for Anon]
    Anon
    April 20, 2021 05:48 pm

    BP,

    Was not aware of the WTO Upland Cotton event.

    Cannot say though that I am terribly surprised.

    Earlier in my career, I had a stint doing some discovery processing in a Pharma patent case.

    I learned plenty (and is probably one of the reasons that — while typically VERY pro-patent — I may be viewed as being harsh on Pharma).

  • [Avatar for BP]
    BP
    April 20, 2021 03:01 pm

    The WTO Upland Cotton dispute was resolved through negotiations outside of the WTO framework, driven by pharma lobby, leaving in place US cotton subsidies while US taxpayers paid hundreds of millions to Brazil.

    What should have happened: “the world price would rise and the C-4 African countries would gain if US cotton subsidies were cut”. In other words, had the WTO framework been allowed to “work”, everyone would have benefited.

    But no. Pharma lobby stepped in to assure that Brazil would not utilize retaliation under TRIPS, which, as the “winner”, it had every right to do. Brazil could have suspended (ignored) IPRs for many pharmaceuticals.

    For Brazil, the deal driven by pharma lobby was too good. Rather than getting the US to reduce cotton subsidies, to benefit all, pharma lobby convinced congress to use US taxpayers dollars to satiate Brazil. How strong is pharma lobby? So strong that it can step into the shoes of cotton growers using US taxpayer dollars to assure that cotton subsidies persist to the detriment of people in developing countries.

    Some have written about the issue, for example, see Prof. Wasserman Rajec: The Intellectual Property Hostage in Trade Retaliation, 76 Md. L. Rev. 169 (2016).

    In Upland Cotton, pharma lobby also went to great lengths to keep the $300 million in US taxpayer funds transferred to Brazil hidden from the public, as it’s not a nice PR story.

    From the MOU (16 Oct 2014):
    The Government of the United States of America (“United States”) and the Government of the Federative Republic of Brazil (“Brazil”) (collectively the “parties”), Hereby agree as follows: Section I Transfer of Funds: 1. Promptly and no later than 21 days after signature of this agreement, the United States shall transfer to the Brazilian Cotton Institute (IBA) by wire to the Banco do Brasil – New York Branch the amount of US$300 million.

    When pharma lobby screws developing countries (and US taxpayers) by hijacking WTO outcomes, what does pharma lobby expect?

    Pharma lobby is now using the waiver proposal as click-bait to further its position, without telling the whole story (like what it did in Upland Cotton).

    Given reality, I’d like to think that “the waiver” is a non-starter. Time to move on to a more fruitful discussion of voluntary licensing.

  • [Avatar for Anon]
    Anon
    April 20, 2021 02:43 pm

    Xtian,

    You are getting closer.

    That said, I do wonder if you do not see the (rather obvious) difference between a self-aggrandizing assertion (OUR Sovereign’s military might in direct relation to other Sovereigns) and the nature of “this affects everyone” of a global pandemic.

    You at least have started looking at this from the Sovereign’s view (as opposed to the rights holder’s view). Now, you just need to recognize the difference between an argument in the extreme and one that reflects an actual universal crisis.

    Does your “defining of a national emergency” pass the smell test?

    Does 5G actually reach a “once-in-a-century world-wide changing, life essential” technology?

    IF (and a mighty mighty big “IF” there) indeed this is so, then you may well have provided an answer, and then can address WHY the COVID waiver is meeting such resistance in the face of a recognized global threat.

    Once THAT has been done, we can move on to discuss your (not so global) “threat” – and I would have no problem doing so.

    (in other words – and not to be snarky, well, at least not to be TOO snarky – I gladly call your bluff)

  • [Avatar for Xtian]
    Xtian
    April 20, 2021 11:49 am

    @ Anon –

    I have been thinking about your question (from the other thread) and trying to approach it from your perspective. I think I have an example that would be consistent with you viewpoint. So we should grant IP waivers b/c of COVID. And just like the COVID waiver request from TRIPS members states, using the same perspective and logic, the US should in return seek a waiver of TRIPS for any 5G technology (including patents and technology transfer) held by foreign nationals because there is a national emergency (at least as defined as the US not being a leader in this technological field, which could put the US position of military superiority and infrastructure at risk). That patents are negative rights which are only granted by and limited to the boundaries of the sovereign authority, waivers should be granted.

    I think I finally answered your question from a perspective of the sovereign and if I concede that the COVID situation is appropriate for a waiver, then this additional situation (5G) is also appropriate for a waiver because controlling ownership of a once-in-a-century world-wide changing, life essential technology is important to the sovereign US.

  • [Avatar for PB]
    PB
    April 20, 2021 11:09 am

    An element that no one seems to be covering is the fact that India, as largest producer of generic products, has a major conflict of interest here. Another one is that India itself has stopped all exports of COVID-19 vaccines to low- and middle-income countries for the time to come (when those countries rely almost uniquely on access to vaccines produced in India), but somehow the waiver is going to address events like this one that are so impactful in terms of equitable access now, yet an inconvenient truth that IP is not the main issue for access to COVID-19 countermeasures.

  • [Avatar for Anon]
    Anon
    April 20, 2021 07:36 am

    Moocow’s reference to “hello again” can be traced to at least the conversation at:

    https://ipwatchdog.com/2021/03/30/calls-compulsory-licensing-ip-waivers-covid-19-vaccines-ignore-technical-complexities/id=131617/

    It would be nice if the point I present were to be recognized, answered, and integrated into the discussion.

    By no means is this point that I raise dispositive of the entirety of the issue, but when a relatively simple point is shunted to the side (and done so repeatedly), that is “smoke” indicating “fire.”

    What is that “fire?”

    By not even bothering with a clearly present item (the fact that Sovereigns — and not rights holders — have written into the law a waiver provision), the legal notion of surplusage drowns out the other points being attempted to be made.

    It’s almost as if recognizing the context that I provide is felt to doom all other points.

    I hold no such view, so the actual lack of recognizing something that is clearly there does baffle me.

  • [Avatar for Anon]
    Anon
    April 20, 2021 07:23 am

    No thanks, Moocow — I don’t want an answer to a question (and perspective) that I am not asking.

    A supplementary question to my question: why is it that no one wants to give an answer to my question?

    There seems to be quite a bit of “slippery slope” and changing my question (i.e., “waiver will last forever”) — but the basic point of my question remains — and remains unanswered.

  • [Avatar for Moocow]
    Moocow
    April 20, 2021 06:26 am

    Hi Anon, it’s you again! Ask not what the Waiver can do for you. Ask what you can do for the Waiver. Only then shall you succeed in your quest for an answer.

  • [Avatar for Anon]
    Anon
    April 19, 2021 10:08 pm

    Mr. Katznelson,

    Are you really equating a once in a century world wide pandemic with everyday life essential technology?

    I have asked this many times now and yet to have a cogent answer (from a perspective of the Sovereign, who would seek such), but if waiver is not pertinent in this type of event, what type of event would warrant waiver,

  • [Avatar for BP]
    BP
    April 19, 2021 09:58 pm

    Thanks Ron, not really in favor of a waiver but flaws in WTO/TRIPS have made talk of the waiver a reality, sad. To be clear, lobbyists themselves have given rise to such extreme measures, they screwed US taxpayers as shown by Upland Cotton.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    April 19, 2021 07:40 pm

    BP@1,
    You focus entirely on the messenger and ignore the message on the TRIPS waiver. An attack on a particular IP-intensive industry will get us nowhere. None of your comments address the substance of the article — the effects of a waiver.

    Is it hard to realize that the open-ended “waiver” from TRIPS sought here is a dangerous precedent on a slippery-slope and a fundamental assault on IP rights generally? What will prevent similar IP “waivers” for life-saving technologies in medical devices, diagnostic systems, or technologies used by first-responders? Where is the subject matter boundary here? Why would the same arguments for a waiver not apply to any “essential” technologies? Can one really believe that such confiscatory waivers will not discourage investment in R&D of the very technologies for which waivers are sought?

  • [Avatar for BP]
    BP
    April 19, 2021 11:45 am

    This is certainly a paid-for lobbying piece and the author is transparent about that, thank you. Unfortunately, in the US, lobbying has confounded benefits to people/taxpayers envisioned by WTO/TRIPS. Pharma lobbyists convinced congress to subsidize US cotton farmers and Brazilian cotton farmers, costing US taxpayers hundreds of millions of dollars while leaving market distortions in place, to the severe detriment of others. How is that fair? Clearly, in 1995, WTO/TRIPS did not envision the impact of lobbying/corruption in the US. The Nixon era activities that gave rise to the FCPA and the like are, today, worse and condoned. An unbreakable loop exists where media profits, political parties profit, corporations profit and taxpayers lose (like in Netflix’s “O Mecanismo” on Operação Lava Jato). The author is right to mention “voluntary licensing” but does not elaborate (perhaps in Part II?). Key voluntary licensing deals should be encouraged to reduce practical impediments to rapid production, distribution and delivery of vaccines. The virus and its variants wait for no one.