Compromise expected in June

A solution to the controversy over a temporary suspension of intellectual property rights protection for COVID-19 drugs, diagnostics and vaccines is emerging. Mid-March, a compromise text on the so-called "patent waiver" went through, and negotiations at the World Trade Organisation (WTO) resumed beginning of May. The European Commission already signalled end of March that it agreed in principle with the proposal, which was drafted after tough wrangling between the EU, South Africa, India and the USA. The controversy over how to increase production capacity for products to combat coronavirus worldwide seems to be coming to an end. 

Suspend TRIPS agreement

The starting point was a request by India and South Africa for a comprehensive waiver of intellectual property rights for COVID-19 vaccines, diagnostics and therapeutics. In order to address the prevention, containment and treatment of COVID-19, several sections of the TRIPS agreement (trade-related aspects of intellectual-property rights) should be temporarily suspended. The WTO agreement set the minimum standards for the protection of, among other things, copyrights, trademarks and trade secrets as early as 1995. The proposal of 2nd October 2020 subsequently received the support of a large number of countries from Africa, Latin America and Asia, as well as a wide range of more than 375 civil society organisations (see here).

EU: patent protection does not solve the problem

On the 10th of June last year, the European Parliament had also called on the European Commission in a resolution to work for a temporary repeal of the TRIPS agreement. This was to improve global access to affordable COVID-19 medical products and address global production constraints and supply shortages (see here).

The request did not meet with the approval of the Commission. Germany, Portugal, Belgium and the United Kingdom also warned against the suspension of patent protection. According to the critical voices, industrial innovation needs a reliable and stable protective framework. Milder means would be available. The European Commission pointed out the need for cooperation and referred to the possibility of chargeable compulsory licences. After all, every technology transfer requires know-how. In other words, knowledge and skills that are likely to be available, in principle in India, the world's largest producer of generic drugs, or even in China. A vaccine factory is under construction in South Africa.

Patent Waiver for vaccines only

The compromise text allows the free use of patents necessary for the manufacture and supply of COVID-19 vaccines – without the consent of the rights holder – to the extent necessary to combat the COVID-19 pandemic. However, the permit only applies to developing countries that have exported less than 10 percent of the world's coronavirus vaccine doses in 2021. The proposal also allows vaccine production to be promoted by means such as judicial or administrative orders. The extension of the solution to therapeutics and diagnostics is to be discussed and decided again after six months.

A compromise that satisfies no one

Advocates of broader global access to COVID-19 medical products strongly criticise the limitation of the compromise proposal to vaccines. Even today, countries could allow the involuntary use of patents under the TRIPS agreement, for example in the case of a health emergency. For industry, the vaccine patent exemption would cost money and undermine incentives for investors should another pandemic occur.

Freeloader China

On 10th May, developing country China also signalled support for the proposal to the WTO, provided developing countries exporting more than ten percent of the world's COVID-19 vaccines were not excluded. For China, this is 32.6 percent! What sounds like a willingness to compromise calls into question central components of the agreement proposal and burdens the further course of the negotiations. WTO members are required to make a final decision on the vaccine issue by the 12th Ministerial Conference mid-June.