Global IP Policy Should Shift to Promote Patent Sharing

By Imron Aly & Ahmed MT Riaz
May 16, 2021

“The TRIPS waiver simply allows countries the option to suspend patent enforcement to encourage COVID-19 vaccine production, which makes sense for those countries where current investment has not resulted in vaccine access.”

https://depositphotos.com/61369901/stock-photo-perspective-word-on-a-puzzle.htmlPresident Biden recently announced his support for easing patent rules surrounding COVID-19 vaccines and other COVID-related intellectual property in the wake of growing crises in India and South Africa. Despite President Biden’s public support, easing the international patent rules requires a unanimous decision on the part of the World Trade Organization (WTO), which is still uncertain. However, with the United States’ announcement, the European Union (EU) will also reportedly consider the issue.

Predictably, major pharmaceutical companies, including the three pharmaceutical manufacturers with vaccines approved for use in the United States — Pfizer, Moderna, and Johnson & Johnson —have lobbied against easing patent rules. But, given the uniquely global reach of the pandemic and the practical barriers to the production and distribution of vaccines on a global scale, it would be a mistake not to provide patent infringement waivers. What is the need? What is the legal issue? And will it make a difference?

The COVID-19 Crisis

According to the Centers for Disease Control and Prevention (CDC), about 580,000 people in the United States have died as a result of the COVID-19 pandemic. At its January 2021 peak, about 280,000 people in the United States contracted the disease daily, and in February 2021, nearly 5,000 people died in a single day. Notably, the worst days of the pandemic came after initial availability of the first vaccines in December 2020. Thankfully, since then, the rate of infections and death has steadily decreased.

The prognosis is not so hopeful, however, in some of the world’s developing nations. India is in the midst of being decimated by the disease. The Indian government reports more than 300,000 new infections per day ? a world record — which accounts for nearly half of all new cases in the world. Yet major news outlets relay that experts believe these numbers are underreported and represent a mere fraction of the country’s actual rate of infection.

In South Africa, a new variant of the virus has emerged, which, according to the World Health Organization, contributed to record case numbers in the region. New COVID-19 cases are also on the rise in Kenya, Ethiopia, Egypt, Libya, and Tunisia. While the global fatality rate has been decreasing, officials in Africa warn about rising fatality rates in the continent, saying that of the 55 countries they monitor, 21 are now reporting fatality rates above the current global average of 2.2%.

These countries complain that access to vaccines has been denied. They further assert that they could attempt to build up their own vaccine manufacturing programs, but for intellectual property concerns—in particular, international treaties that require member countries to enforce patent rights. While there are more significant barriers to vaccine entry and effective distribution beyond patent protection issues, the question is whether allowing countries to stop patent infringement enforcement would remove at least this one obstacle.

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International Treaties and Intellectual Property

The vast majority of countries worldwide are subject to the 1995 Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. The Agreement includes many intellectual property terms and requirements, so that there would be mutual implementation of IP rights around the world.

TRIPS requires that “patents shall be available for any inventions, whether products or processes, in all fields of technology” and “members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement.” In short, members have to allow companies with patents to sue companies for patent infringement, to recover damages or even block using the patented technology.

Last year, South Africa and India led the way by officially requesting waivers under the TRIPS provisions, so that the patent protections could be temporarily suspended to address COVID-19 concerns. Their rationale is that the pandemic is an issue that affects the entire world, and that suspending intellectual property enforcement will free up resources and capabilities. The vaccine technology patent-holders naturally oppose the TRIPS waivers, arguing that they spent vast resources to invent patented techniques and international law should preserve the rules in place to protect those patented inventions.

The waiver request was rejected by G7 countries last year, including the United States. Now, however, with the Biden administration’s bold move and the EU expected to confirm its consideration soon, there is momentum to reconsider. India and South Africa plan to resubmit the waiver request in time for the next WTO meetings later in May and on June 8-9.

What Happens If Waivers Are Granted

In an ideal scenario, the world should be developing global policy that meets parallel goals of profit in return for investment and saving lives, particularly for globally transmitted disease. This issue arose in connection with the AIDS epidemic. At that time, TRIPS Agreement members attempted to solve the problem by so-called “compulsory licenses,” where the government could require patent owners to license their technology to others at a low rate. Though a contested issue, it remains as part of the TRIPS program and has been amended over the years. And with typical small molecule drugs, which represent most tablets and capsules available today, taking away patent protection would be like flipping a switch and allowing many more companies to make many more drugs. But patents are only one part of a very complicated scenario, and the proposed patent infringement waiver is unlikely to make more than a marginal impact on the current crisis.

Because vaccine development and the technology for the currently available vaccines are quite complex, some believe the patent waiver would not make any difference without available, regulated facilities that could quickly manufacture approved, safe vaccines. That’s a somewhat short-sighted view, though, because it assumes that no one would invest in or hire talent to develop vaccines in developing countries — or that government programs would not require such development — but for the patent issues that abound. But patents alone are only one part of a very complicated scenario, and the proposed patent infringement waiver is unlikely to make more than a marginal impact on the current crisis for a number of reasons.

The actual manufacture of vaccines is more intricate than making typical pharmaceutical products like tablets or capsules with small molecule drugs. For example, constraints on access to the technology necessary to finalize vaccine testing to ensure it meets necessary quality criteria provides an additional barrier for smaller pharmaceutical companies. As a result, developers, especially small biotechnology companies, are compelled to partner with large manufacturers such as Pfizer and Johnson & Johnson in order to bring products to market.

Moderna’s mRNA-1273 COVID-19 vaccine is purportedly covered by U.S. Patent 10,064,959. That patent discloses a method of synthesizing a synthetic messenger ribonucleic acid (mRNA) that issues a message and triggers the body’s innate immune response. The body makes antibodies that can later identify the coronavirus and destroy it. While the patent is to that concept, it is not an instruction book on how to run a manufacturing facility; that still takes tremendous know-how that is not publicly or easily available.

Even with the know-how and the physical processing capability, still among the more critical obstacles have been the availability of basic raw materials (e.g., buffers, resins, sodium chloride), consumables (e.g., single-use bags, tubing, sterile filters), and fill/finish (e.g., vials, stoppers). These materials are essential, and even before the current pandemic, biological manufacturing equipment and supplies shortages had been an issue.

Still, one thing is for sure: there is no incentive even to build a new vaccine program in a developing country, which could see lower profits than other countries, and face greater overhead cost and risk of patent infringement lawsuits. Maintaining the current patent protection policies serves as an impediment to the progress of world health and solutions to future pandemics. Patent protection exists to incentivize innovation in exchange for teaching the world how to do so in a published patent. That exchange is meaningless, however, when the world cannot benefit — whether in the short term or long term — without access to the technology to practice a patent’s teachings. This is not for lack of infrastructure, as countries like India have the capacity to grow and build quickly, but rather for lack of cooperation. This is particularly true for the companies who obtained substantial government funding to develop their vaccines, without any reciprocal obligations to meet government or international objectives.

Companies that oppose the waiver know that there is unlikely to be serious competition overnight. Instead, their concerns may be more along the lines of what comes next: will every new drug program be subject to free usage without patent protection?

These concerns are unfounded based on the current proposal, which is limited to COVID-19 and has taken substantial international efforts and official international law amendments. Even with the waivers in place, this is not a situation where companies can make cheap versions abroad and then import them into the United States to compete with more expensive patented versions; the United States will continue to enforce its patent laws. The TRIPS waiver simply allows countries the option to suspend patent enforcement to encourage COVID-19 vaccine production, which makes sense for those countries where current investment has not resulted in vaccine access.

Let’s Learn From This Experience

Without a global policy, the world will inevitably repeat the same experience it has suffered over the past year. Instead, we must recognize that global intellectual property policy is a part of a global health policy that promotes the sharing of technological know-how, addresses manufacturing and supply obstacles, and establishes equitable profit and sharing principles for life-saving drugs that affect the world. These are not one-country issues, as the past year has reminded us. Other more common life-saving drugs, like insulin, also need to be discussed because of the vast need for them and ever-increasing costs.

The patent waiver should be implemented, not only for public health, but also for overall economic growth in sectors far beyond pharmaceutical companies that make vaccines. Notwithstanding the fall in pharmaceutical share prices in the wake of President Biden’s announcement, a waiver of the patent protections for COVID-19 and future infectious diseases will ultimately benefit the global economy. It is difficult to forget that a year ago, supply chain interruptions affected distribution worldwide. Lockdowns, which will continue in the absence of robust vaccine policies, will continue to impact global industries like airlines, tourism, and real estate.

Learning from the experience of the past year, the world should implement policies including promoting the sharing of technologies that may assist to stave off and limit the impact of future pandemics. The intellectual property waiver makes common sense, is limited in scope, and is the right thing to do.

Image Source: Deposit Photos
Author: iqoncept
Image ID: 61369901 

The Author

Imron Aly

Imron Aly is co-leader of Schiff Hardin’s Intellectual Property Group and co-chair of the firm's Hatch-Waxman and Biosimilars patent litigation team. A trial lawyer who serves as lead counsel on dozens of client issues, Imron’s practice focuses on patent infringement litigation and other IP matters.

Imron Aly

Ahmed MT Riaz is an intellectual property attorney at Schiff Hardin. He provides client counsel and support in connection with patent and trademark enforcement and defense. His practice includes Hatch-Waxman Paragraph IV disputes and patent troll issues.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 20 Comments comments. Join the discussion.

  1. Anon May 16, 2021 7:07 pm

    This article misses in so many ways.

  2. xtian May 17, 2021 8:23 am

    “That exchange [for teaching the world how to do so in a published patent] is meaningless, however, when the world cannot benefit — whether in the short term or long term — without access to the technology to practice a patent’s teachings.”

    So the author admits patents waivers won’t do a thing. He just disproved his own premise of the article. And in the same sentence, the author is advocating for appropriation of IP.

    Then, the author dismisses the camel’s nose under the tent: “their concerns may be more along the lines of what comes next: will every new drug program be subject to free usage without patent protection?”

    I suggest the author re-read his own text, particularly the first-quoted passage and ask himself whether these countries will constrain themselves to not asking again for a waiver to combat the next pandemic. I think not.

  3. Moocow May 17, 2021 9:33 am

    Yes, I’m confused too. Maybe the authors’ position is too nuanced for me to understand. Patents must be waived but they aren’t the issue? A long-term solution is needed so let’s implement a short-term IP waiver? I don’t quite understand what the post is saying.

  4. Curious May 17, 2021 11:09 am

    Moderna’s mRNA-1273 COVID-19 vaccine is purportedly covered by U.S. Patent 10,064,959.
    Is there an Indian counterpart to that application? Is it allowed? Will it ever be allowed? Put differently, how is this patent impacting the ability of anyone in India from developing their own vaccine.

    While this article makes some, IMHO, good points that a waiver isn’t going to be the end of the world for pharma companies. The point still remains is that this waiver does little to impact the current crisis.

    Nothing is stopping companies in India (or any country for that matter) from developing their own pharmaceuticals and patenting them in India, the United States, the EU, wherever. This is part of TRIPS.

  5. Anon May 17, 2021 11:20 am

    Curious (or not so, as the case may be), it has been well pointed out that “patent only” waiver is really NOT the thrust of the India/South Africa effort (or of the Biden Administration’s ‘Equity’ driver that is at point in the current goings-on).

  6. Jacek May 17, 2021 1:42 pm

    The outcome? Trade secrets will flourish from now on.

    Legal Verbal description of a Patent quite often doesn’t transfer details needed for implementation.
    Everybody knows how to make an atomic bomb but how many of us can do it at their kitchen table.
    How many elements has Covid 19 vaccine? 290? or more.

    “The patent waiver should be implemented, not only for public health but also for overall economic growth in sectors far beyond pharmaceutical companies that make vaccines.” – I am sorry, but it is Laughable!!! Big tech and Chinese Infringers, I am sure, plan a celebration.

    What about the rest of the US (Inventors)?
    I am sure we will switch to better-paid activity.
    I, for example, plan to be a pirate in the Caribbean.

    If you throw together a mix of legends, assumptions, and misrepresentations and talk in volumes and very fast, you may mislead many, not only yourself.

  7. Curious May 17, 2021 2:08 pm

    well pointed out that “patent only” waiver is really NOT the thrust of the India/South Africa effort (or of the Biden Administration’s ‘Equity’ driver
    Then please point out to me where the Biden Administration has indicated they want to go further than a “patent only” waiver.

  8. Anon May 17, 2021 2:20 pm

    Curious- you are kidding, right?

    Asked and answered – and even providing a second helping:

    https://www.ipwatchdog.com/2021/05/10/assessing-damage-covid-technology-giveaway/id=133383/

  9. Pro Say May 17, 2021 4:09 pm

    “Global IP Policy Should Shift to Promote Patent / IP Stealing”

    There. Headline fixed.

    And yet again I say:

    Easy to give away that which belongs to another.

  10. Curious May 17, 2021 4:24 pm

    You mean you’ve got nothing more than the statement which I reproduced on May 11th @14 in that article?

    That same statement reproduced below:
    “This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures. The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines. We will actively participate in text-based negotiations at the World Trade Organization (WTO) needed to make that happen. Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved.

    “The Administration’s aim is to get as many safe and effective vaccines to as many people as fast as possible. As our vaccine supply for the American people is secured, the Administration will continue to ramp up its efforts – working with the private sector and all possible partners – to expand vaccine manufacturing and distribution. It will also work to increase the raw materials needed to produce those vaccines.”
    If that is all you got, then say so. If there is more, then cite something different. BTW, citing to the IPWatchdog article is next to useless as I have little idea as to precisely what you are referring. As I implicitly tell examiners all the time, I don’t like guessing.

  11. Anon May 17, 2021 7:46 pm

    Curious,

    Your lack of curiosity has turned into a sullen and willful blindness.

    I have led you to the well — a well far more informative than your paltry attempt to limit your understanding.

    The rest is up to you — but be aware, you are the loser if you chose to continue to clench tight your eyes.

  12. Anon May 17, 2021 8:54 pm

    By the way, I am not citing the article, but merely linking to it for you to read the comments below the article — the comments that give you the answer you refuse to see.

    No guessing required.

  13. Ron Katznelson May 17, 2021 9:00 pm

    The authors of this article and their choice of its title create obfuscations –- this waiver request is not about mere patent rights.

    Curious, “Then please point out to me where the Biden Administration has indicated they want to go further than a ‘patent only’ waiver.
    You are confusing “vaccine only” with “patent only.” The former is what the Biden Administration meant to say. Read again what you quoted from the USTR and pay attention to the terms used:

    “The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines. We will actively participate in text-based negotiations at the World Trade Organization (WTO) needed to make that happen.”

    The Biden Administration said nothing about “patent protections” –- it clearly intends a much broader waiver –- “intellectual property protections.” This is because a “Patent only” waiver means very little to the countries seeking the waiver because it gets them nowhere. In order to manufacture safe vaccines under leading-edge technologies they need much more than patent rights. The scope of the IP waiver is broad. Beyond patents, the waiver would also include appropriation of trade-secret-protected-manufacturing know-how, data, recipes for biologic resources, cell lines, formulas, media, procedures, copyright and industrial designs. To get safety approvals and ensure quality control, these countries will also compel “sharing” of regulators’ data on manufacturing methods, and entry to industrial complexes to access additional information, data, and biologic resources. In other words, this waiver would be a confiscatory technology transfer.

  14. Pro Say May 18, 2021 9:43 am

    Thanks Ron for yet again shining the bright light of truth into darkness.

    Biden’s tech transfer proposal is — were his administration to attempt to enforce it — clearly unconstitutional.

    The holders of this tech will, and indeed must for the good of both themselves and America, fight like h.e.l.l. to keep that which is theirs.

    With a strong conservative majority, SCOTUS will not let the Biden admin get away with this.

  15. Curious May 18, 2021 10:12 am

    I have led you to the well — a well far more informative than your paltry attempt to limit your understanding.
    You dodged the question … as is all-too-typical. Is it impossible for you to give a straight answer?

    Beyond patents, the waiver would also include appropriation of trade-secret-protected-manufacturing know-how, data, recipes for biologic resources, cell lines, formulas, media, procedures, copyright and industrial designs.
    You conflate waiver of “intellectual property protections” with confiscatory tech transfer. They are not one and the same.

    This is why I have little patience for either side of this debate — both are acting like ‘chicken little’ claiming that the end of the world is nigh. One side wants technology that they don’t have the capability/capacity to make. The other side thinks the Indian or South African government is going to send their secret police into Pfizer’s manufacturing facilities in the US to take “trade-secret-protected-manufacturing know-how, data, recipes for biologic resources, cell lines, formulas, media, procedures.”

    The waiver being talked about is little more than a grand gesture that has little real-world impact. As contained within the statement, “Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved.” Translated, it means that we will delay actual implementation of any kind of waiver for as long as it takes until this issue dies down. In the mean time, the US will look good in the world’s eyes by agreeing to this waiver. Once Pfizer, Moderna et al. expand their production facilities and start shipping vaccines to countries on the lower-end of the economic spectrum, this whole issue will be out of the spotlight and the waiver can die on the vine in the WTO.

    Do you see Pfizer and Moderna publicly fighting tooth and nail against this proposed waiver? I don’t. Why? Because they also recognize the public relations aspect of this waiver and what little impact it will have on them. This is from an article dated May 4th:
    [Pfizer] announced it will increase vaccine production capacity to 3 billion doses for 2022, and is still taking in commitments for this year. Pfizer estimates its 2021 capacity is 2.5 billion doses, of which 1.6 billion have already been committed.
    I read somewhere that Pfizer will be selling them to India at cost. This also doesn’t take into account that there are other vaccine makers out there and new vaccines being approved. By the end of 2021, the world is going to be flooded with vaccines and this waiver will have long been forgotten — as it was intended to be all along (at least by those who ostensibly agreed to support it).

  16. Anon May 18, 2021 10:14 am

    Mr. Katznelson – well said (and reflective of the points that I have been making for some time now). I appreciate that others are seeing the pieces in play.

    Pro Say,

    smh – I do wish that you would pay attention to the legal terms of art that you toss around in reckless abandon. There is nothing “clearly unconstitutional” with what amounts to be a government taking. Governments, including ours, have a fully Constitutional path of taking – and Takings Law addresses the details. Your entreaty to a conservative majority SCOTUS is simply – and as deeply – misplaced.

    It is an entirely different discussion as to SHOULD our government engage in any such takings.

    That discussion should be entered into with eyes fully wide open.

    And THAT is why I have been relentless in my postings on this topic. Several (including Ron here and Dr. Noonan over at PatentDocs are showing that they DO see the non-patent IP ‘land grab’ on the table. It is NO accident that the two nations in the world attempting to bolster their own Sovereign’s ‘generic pharma’ base (India and South Africa) have been the two pushing hardest for the WIDE SPREAD IP waiver. It is also why I have been persistent in pointing out the Biden Administration “Equity” platform as problematic IN supporting that very same wide spread IP waiver. The notion of “Equity” as a purely political driver is very much in play here – and far too many are still pretending that “Oh, Pharma has such power that they would never let any such thing happen.”

  17. Pro Say May 18, 2021 2:28 pm

    “reckless abandon”

    Chuckles my good friend Anon. Chuckles.

    Didn’t think I’d have to to state the obvious on a legal blog, but here you go:

    It’s at least implicit in Biden’s “proposal” that he’s willing to take all the IP (as Ron explains) of the innovators . . . and give it to others . . . but without paying the innovators . . . the untold billions . . . their IP is actually worth.

    It is a gov taking without compensation that is unconstitutional.

    Capiche?

  18. Anon May 18, 2021 6:48 pm

    but without paying the innovators

    That is an assertion that cannot be made — given that any details (within which the Devil would be found) are simply not available yet.

    As I said, your pronouncement as is cannot stand. If indeed Biden would have so declared that the taking would be in fact an improper taking, I would most likely have beaten you to the punch.

  19. Anon May 18, 2021 7:10 pm

    Further, Pro Say, Biden has not been shy about simply ramping up the printing presses to pay for whatever….

    (Not sure what trillion dollar mark this puts us at, but you can be damm sure that there was zero reflection on any balancing contemplated with ever paying this — or any of the other items — back: https://www.wsj.com/articles/treasury-secretary-janet-yellen-calls-for-reform-of-corporate-tax-system-11621346462 ).

  20. Anon May 19, 2021 6:40 pm

    And a “next one” of

    https://www.wsj.com/articles/elizabeth-warren-tells-the-truth-11621195472

    Raises the anticipation of the inevitable full bore cognitive dissonance of those with both Liberal Left and Big Pharma proclivities.

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