By Peter Ungphakorn
POSTED MAY 25, 2021 | UPDATED JULY 24, 2021
The long-awaited revised proposal related to the COVID-19 pandemic, to waive obligations on intellectual property protection, was finally circulated to members of the World Trade Organization (WTO) on May 25.
This will allow the first negotiations to proceed in the WTO’s intellectual property council since the US swung behind the idea of a waiver, if not necessarily in the form proposed. (The council’s official name is the TRIPS Council — for “trade-related aspects of intellectual property rights”.)
A closer examination of the contents shows that a lot may still have to be negotiated. In other words, this is not just about accepting or rejecting the waiver — to waive or not to waive. What is in the text and what is left out are all significant. We can expect some rough times ahead.
(Analysis of the text continues below this box. Click here to skip the box)
THE DISCUSSIONS IN THE WTO
Updated July 1, 6, 14 and 21, 2021
WTO members have indeed struggled to move the issue forward, judging by the WTO news stories on the July 20 and June 8 –9, 2021 formal intellectual property (TRIPS) council meetings, and accounts from trade officials on the informal meetings on June 17, 24, 30 and July 6 and 14 (interspersed with small group meetings from July 5).
All delegations have said they are happy to negotiate the waiver, and by July 14 it appeared their discussions were based on the structure of the draft if not necessarily on the wording in the text itself.
They all said they wanted everyone to have quick and secure access to good quality, safe, effective and affordable vaccines and medicines. They differed on whether the waiver would deliver that and on details of the draft. Proponents complained that countries sceptical of the waiver were not negotiating seriously, according to trade sources.
How much the waiver should cover is one of the sticking points, as expected. Proponents complain that the US is only focusing on patents and vaccines, not all the types of intellectual property in the draft, and not the full range of medical products associated with COVID-19.
So is the proposed wording on how long the waiver should last. On July 6, 14 and 20, the US and others questioned how the proposed duration in the text would match up with WTO rules on waivers (Art.9.4 of the WTO Agreement).
Other issues raised include transparency, how to limit the long term impact of disclosure of trade secrets during the waiver period, how countries would implement the waiver under their different domestic legal systems, “regulatory data”, and technology transfer.
The US has called repeatedly for members to concentrate on proposals that are pragmatic and can quickly gain consensus in the WTO.
Some countries— eg, Chile, Mexico, Norway, Singapore, the UK — say a number of questions remain unanswered, including what happens when these products are traded between countries who apply the waiver differently or one side does not apply it at all, and whether notification would be needed.
Brazil, Chile, Colombia, the EU, Japan, Mexico, Switzerland, UK and US continue to argue that intellectual property protection does help provide access to vaccines and therapeutics. They reject the proponents’ argument that discussions should only focus on the waiver, countering that other issues such as those raised in the EU’s paper are also important.
Members are set to approve another 90-day extension (the third) of the discussion when the General Council meets on July 27–28. This is required under WTO rules for waivers (Art9.3 of the WTO Agreement). The TRIPS Council chair, Ambassador Dagfinn Sørli of Norway, would include the request in a status report to the General Council (see draft below) covering the discussion of both the waiver and the EU’s paper.
The WTO’s summer break is from August into mid-September. There will be no more meetings on the waiver until an informal meeting in September, followed by the next formal meeting on October 13–14, although an earlier one can be held if needed.
As US Trade Representative Katherine Tai warned in her brief announcement on May 5, 2021, when the US was swung behind the waiver: the “negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved”.
India, South Africa and a long list of co-sponsors say the May 25 revision aims to help WTO members move forward in negotiations and to focus on a text rather than general principles.
They say the revision takes “into account the discussions and feedback received”.
But in fact it is a surprising text, not for what it does, but for what it does not do. In many ways it is little different from the original and in one crucial area — how long the waiver would be in place, and how that would be decided — it may make agreement more difficult.
That said, some changes have been made to accommodate some concerns.
A covering note mentions the preamble, which has been updated to refer to the emergence of mutations and new variants, and other issues that have become more urgent since the first version was issued in October 2020.
The cover note says the revision focuses the coverage from the broader “health products and technologies” to specify that these include “a range of products and technologies and intellectual property issues [which] may arise with respect to the products and technologies, their materials or components, as well as their methods and means of manufacture”.
The proposed duration is now specified, instead of the previous “[X] years”. The cover note explains:
The international community is dealing with a novel pathogen, with many uncertainties. For instance, investigation is still underway for effective therapeutics, and there are still many unknowns with respect to vaccines which will have a bearing on the scale manufacturing and supply that will be needed to control the pandemic such as the duration of immunity conferred, effectiveness of vaccines against new variants, and the effect of vaccines on children. In addition, the duration has to be practical for manufacturing to be feasible and viable. These complexities suggest the need for a practical and flexible duration. Hence it is proposed that the General Council assesses the existence of the exceptional circumstances justifying the waiver after a minimum period to determine the date of termination. The proposed language is based on Article IX (4) of the WTO Agreement.
But the actual proposed duration is surprising. If the proponents insist on it, there will almost certainly be no consensus agreement on the waiver.
Assessment: It’s hard to believe this draft was intended to enable quick agreement to waive obligations under the WTO intellectual property agreement. It’s extreme — a blank cheque with some minor tweaks — not a draft than can be quickly settled.
Continue reading or use these links to jump down the page:
IN THE REVISED DRAFT: Preamble | Coverage | Duration | Exemption: entertainment | Least-developed countries | General Council review | No legal challenge
NOT IN THE REVISED DRAFT: Not in: Terms and conditions | Not in: Transparency
WHAT TO EXPECT
Find out more | See also further reading
DRAFT DECISION TEXT
WAIVER FROM CERTAIN PROVISIONS OF THE TRIPS AGREEMENT FOR THE PREVENTION, CONTAINMENT AND TREATMENT OF COVID-19
This provides the context. It lists various events and describes how serious the pandemic is. It pays lip service to preserving incentives for research and innovation but without saying how the waiver would do that other than to refer to balance. It concludes that the waiver is justified without any reference to intellectual property protection being an obstacle.
The General Council
Having regard to paragraphs 1, 3 and 4 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization (“the WTO Agreement”);
Conducting the functions of the Ministerial Conference in the interval between meetings pursuant to paragraph 2 of Article IV of the WTO Agreement;
Noting that the coronavirus disease 2019 (COVID-19) is a new infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-COV-2);
Recalling that on 11/03/2020, the World Health Organization (WHO) declared the 2019–20 coronavirus outbreak to be a pandemic, and it continues to be a very high risk across the globe in all WTO Members;
Noting with concern the threat to human health, safety and well-being caused by the COVID-19 pandemic, which has spread all around the globe, as well as the unprecedented and multifaceted effects of the pandemic, including the severe disruption to societies, economies, global trade and travel and the devastating impact on the livelihoods of people;
Noting with great concern the continuous mutations and emergence of new variants of SARS-COV-2, which also highlights the significant uncertainties and complexities of controlling SARS-COV-2;
Recognising the global need for unimpeded, timely and secure access to quality, safe, efficacious and affordable health products and technologies for all, for a rapid and effective response to the COVID-19 pandemic and consequently the urgent need to diversify and scale-up production to meet global needs and promote economic recovery;
Recognizing also that the COVID-19 global pandemic requires a global response based on unity, solidarity and multilateral cooperation;
Recognizing the importance of preserving incentives for research and innovation, and that these should be balanced with the public health interest;
Noting that, in the light of the foregoing, exceptional circumstances exist justifying waivers from the obligations of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement);
Decides as follows:
Paragraph 1 is a short text, a single sentence effectively in two parts.
1. The obligations of Members to implement or apply Sections 1, 4, 5 and 7 of Part II of the TRIPS Agreement or to enforce these Sections under Part III of the TRIPS Agreement, shall be waived in relation to health products and technologies including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture for the prevention, treatment or containment of COVID-19.
First, the types of intellectual property. Here the proposal is unchanged: copyright (Section 1 of part 2 of the TRIPS Agreement), industrial designs (Section 4), patents (Section 5), trade secrets (Section 7) and enforcement (Part 3).
Almost all the public discussion has been about patents. For example the EU’s line (with a proposal promised and then delivered) is to focus on how to make “flexibilities” in the TRIPS Agreement work. But those flexibilities only exist for patents, not the other types of intellectual property.
One possibility that some experts are discussing is to use the security exception (Article 73), which would apply to all types of intellectual property, and would not need a waiver if it is justified.
Assessment: we can expect some negotiation over this, but it’s unclear how difficult that might be.
Second, the products. The draft now lists “diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components”.
So far, the US has only mentioned vaccines. It “supports the waiver of those protections for COVID-19 vaccines”. Likewise, “New Zealand supports the waiver of IP protections on vaccines.” We don’t know yet what their position is on other products.
Assessment: we can expect tough negotiations over which products the waiver would cover. WTO members may also haggle over how to define “for the prevention, treatment or containment of COVID-19”. This could be under terms and conditions, which are not in this draft (see below).
2. This waiver shall be in force for at least 3 years from the date of this decision. The General Council shall, thereafter, review the existence of the exceptional circumstances justifying the waiver, and if such circumstances cease to exist, the General Council shall determine the date of termination of the waiver.
The new draft proposes that the waiver last “for at least 3 years”. After that, the WTO General Council would decide whether to end the waiver or extend it and if so, what the end date would be.
So, in practice how would the waiver be terminated? By a new General Council decision. But the way this is drafted, that would require consensus agreement to end the waiver. And that means if only one of the WTO’s 164 members wants to continue with the waiver, then it cannot be terminated. Just one country would be enough to block termination.
Assessment: This has absolutely no chance of being agreed. Zero. It simply lengthens the negotiation on the waiver, which is supposed to be needed urgently. So why propose it?
Even if the draft were amended for the General Council to vote on this one issue, it would still be rejected.
3. The waiver in paragraph 1 shall not apply to the protection of Performers, Producers of Phonograms (Sound Recordings) and Broadcasting Organizations under Article 14 of the TRIPS Agreement.
Netflix, Spotify and other streaming services would not be covered. Nor would CDs, DVDs, Blu-ray discs, vinyl records and more, even if they help with treatment for COVID-19. Paragraph 3 excludes performance, recordings and broadcasts from the waiver. Copyright protection on them would continue.
Assessment: this is uncontroversial and is unchanged from the original proposal.
4. This decision is without prejudice to the right of least developed country Members under paragraph 1 of Article 66 of the TRIPS Agreement.
They are not obliged to protect intellectual property under the WTO agreement (currently until 2033), although if they do, they have to follow the agreement’s conditions such as non-discrimination. The waiver would not change that.
Assessment: uncontroversial and unchanged
5. This waiver shall be reviewed by the General Council not later than one year after it is granted, and thereafter annually until the waiver terminates, in accordance with the provisions of paragraph 4 of Article IX of the WTO Agreement.
The General Council (acting on behalf of the ministerial conference) would review the waiver annually, beginning within the waiver’s first year.
Assessment: this is standard and required by Article 9.4 of the WTO Agreement. Unchanged
6. Members shall not challenge any measures taken in conformity with the provision of the waivers contained in this Decision under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994, or through the WTO’s Dispute Settlement Mechanism.
If a country uses the proposed waiver correctly — conforming with it as agreed — it could not be challenged legally under the WTO’s dispute settlement procedures.
Most controversially, that applies even if the accusation is that an agreement has been violated.
Perhaps less controversially, it also applies for an alleged “non-violation” offence. This is known legally as “nullification and impairment” (GATT Article 23) — when another country is deprived of a benefit it expected as a result of negotiations, even though the letter of an agreement has not been violated.
On non-violation challenges, the draft overrides paragraph 3 of a WTO agreement known as the Understanding on Waivers under GATT, which specifically allows non-violation challenges for waivers — any member “may invoke the provisions of Article XXIII of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding”.
Assessment: This is unchanged from the original draft. The precedent is in the 2003 waiver on exporting under compulsory licence, but with one important difference.
In both the 2003 waiver and the COVID-19 draft, non-violation complaints are excluded.
But here, something new has been added: “or through the WTO’s Dispute Settlement Mechanism”, meaning any legal challenge is ruled out. And that could mean there is no way to establish whether a country’s use of the waiver conforms with the waiver’s terms.
When the 2003 waiver excluded non-violation cases, this was not in order to avoid legal challenges, but because there is a long-running debate about whether non-violation cases are valid for intellectual property. Among WTO waivers in general, that provision only exists in the one concerning intellectual property, not other waivers. It was never about shielding countries from being challenged more generally over allegedly violating the terms of the waiver.
On the other hand, apparently this paragraph has not been questioned in the lengthy debates on the waiver in the TRIPS Council. Proponents will argue that this is needed so countries can act fast in an emergency, but will the whole membership agree? Time will tell.
And that ends the draft. But the debate is unlikely to stop there. It’s not just about what’s in the draft. What it leaves out could also be important.
Other WTO members may want some constraints on how the waiver is used. For example, they may want to prevent products made under the waiver from being exported to countries that do not invoke it.
This has happened before with the waiver on compulsory licensing for export.
4. In order to ensure that the products imported under the system set out in this Decision are used for the public health purposes underlying their importation, eligible importing Members shall take reasonable measures within their means, proportionate to their administrative capacities and to the risk of trade diversion to prevent re-exportation of the products that have actually been imported into their territories under the system. In the event that an eligible importing Member that is a developing country Member or a least-developed country Member experiences difficulty in implementing this provision, developed country Members shall provide, on request and on mutually agreed terms and conditions, technical and financial cooperation in order to facilitate its implementation.
Other countries also have to act to prevent the products being diverted to them.
We don’t know yet whether this will become an issue, but past experience suggests some countries will demand some conditions on the use of the waiver.
It would be extraordinary if the waiver ended up without saying countries using it have to share information publicly through the WTO.
It’s a condition of most if not all waivers, and it’s a basic principle in the WTO, reflected in most of its agreements, including GATT Article 10 (goods), GATS Article 3 (services) and TRIPS Article 63.2 (intellectual property).
The 2003 waiver, now an amendment of the TRIPS Agreement, is specific on what has to be notified, as the WTO website explains:
Paragraph 6 system
The “Paragraph 6 system” is often used to refer to the system set up by the WTO to address this problem by creating a new form of compulsory licence specifically for the export of medicines (see further background information). The use of this special compulsory licence requires formal notification to the WTO. There are three types of notification:
1. importing member’s one-off general notification of intention to use the Paragraph 6 system (not required for least-developed country members);
2. importing member’s specific notification of the details of the needed pharmaceutical products and other details required under the Paragraph 6 system;
3. exporting member’s notification of grant of a compulsory licence for export and conditions attached to it.
Supporters of the COVID-19 waiver say conditions like these are “extremely onerous and time consuming”, as India described them in the intellectual property council (October and December 2020):
870. Fourth, with regard to existing flexibilities under the TRIPS Agreement, the same are not adequate to address the fast-changing landscape of COVID-19. Of particular concern for countries with insufficient or no manufacturing capacity is Article 31bis, which is limited to pharmaceutical products, and was not designed to address challenges arising from pandemics of this scale and magnitude. Medical devices like ventilators, dialysis machines etc. that are crucial for combating the ongoing pandemic, may not be covered under the scope of Article 31bis. There is a reason why the Special Compulsory Licensing system has been used only once. Requirements under this System that exporters and importers have to comply with, are extremely onerous and time-consuming, thereby rendering it of no practical utility towards handling the ongoing pandemic.
A number of countries disagree, and the EU has already announced it is preparing a proposal emphasising the use of flexibilities in the agreement. It’s quite possible that there will be lengthy haggling over conditions and transparency too.
But, in any case, some notification will be needed. Any country wanting to use the waiver will need to amend its own laws (assuming they currently comply with the intellectual property agreement). And Article 63.2 says countries have to notify their laws and regulations, along with any changes to these.
2. Members shall notify the laws and regulations referred to in paragraph 1 to the Council for TRIPS in order to assist that Council in its review of the operation of this Agreement. …
All of this suggests the waiver will not be agreed quickly, if at all. The most optimistic expectation is that it might be agreed in some form by the ministerial conference from November 30 to December 3 this year (2021). Some think it will take longer than that, which suggests that even if the waiver is agreed, it might not be ready for this pandemic.
We don’t know:
- whether the proponents have deliberately circulated an extreme position to allow themselves room to give ground and move towards a consensus, or whether they are wedded to their apparent hard line
- what counterproposals the US and others might produce, and what they would contain
The best we can hope for is that counterproposals emerge quickly and all sides negotiate constructively and receptively. Past experience suggests that won’t happen. But as some people keep telling us “there’s always a first time”.
One important point is inescapable. This is not just “yes” or “no” to the waiver or the latest draft.
It’s about what the waiver contains, and that will take a long time to sort out—if it can be sorted out at all. And even then, the impact on vaccines is unclear because copying them is not straightforward.
- The proposed COVID-19 intellectual property waiver: too soon to predict — the impact of the US about-turn
- The WTO’s deadlock over an intellectual property waiver for COVID-19 — Full background and explanation, including links to the arguments and questions asked, and further reading
- One to watch: Bolivia’s bid to import a Canadian COVID-19 vaccine
- Technical note: the one and only compulsory licence for export
All pieces tagged “WTO waiver” are listed here.
DRAFT OF THE CHAIR’S STATUS REPORT TO THE GENERAL COUNCIL
“At the meeting of the TRIPS Council on 15-16 October 2020, India and South Africa introduced document IP/C/W/669, requesting a waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19, which had been circulated on 2 October 2020 and has since been co-sponsored by the delegations of Kenya, Eswatini, Mozambique, Pakistan, Bolivia, Venezuela, Mongolia, Zimbabwe, Egypt, the African Group, the LDC Group, the Maldives, Fiji, Namibia, Vanuatu, Indonesia and Jordan.
“Since the introduction of the document, discussions took place in various formal and informal TRIPS Council meetings. Delegations exchanged views, asked questions, sought clarifications and provided replies, clarifications, and information, including through documents IP/C/W/670, IP/C/W/671, IP/C/W/672, IP/C/W/673 and IP/C/W/674, on the waiver request.
“Since the last status report to the General Council on 5-6 May 2021, the co-sponsors issued a revised proposal on 21 May 2021, which was circulated in document IP/C/W/669/Rev.1. The revised waiver request was presented at an informal open-ended meeting of the Council on 31 May, and introduced at its formal meeting on 8-9 June 2021. Following the arrangement of a text-based process, discussions continued in small-group consultations, at informal open-ended meetings on 17 and 30 June, and 6 and 14 July, and at a formal meeting of the Council on 20 July.
“A proposal for a draft General Council declaration on the TRIPS Agreement and Public Health in the circumstances of a pandemic, issued by the European Union on 21 June 2021 and circulated in IP/C/W/681, has also been discussed in those meetings. Delegations exchanged views, asked questions, sought clarifications and provided replies, clarifications, and information. Disagreement persists on the fundamental question of whether this proposal is the appropriate and most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-related products.
“In the context of the text-based process, delegations held focused discussions on the topics of ‘scope’, both from the perspective of products and of IP rights, on ‘duration’, ‘implementation’ and on protection of undisclosed information. Delegations engaged positively and their detailed substantive exchanges helped clarify various aspects and nuances of positions. While delegations remain committed to the common goal of providing timely and secure access to high-quality, safe, efficacious and affordable vaccines and medicines for all, disagreement persists on the fundamental question of whether a waiver is the appropriate and most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-related products.
“This means that the TRIPS Council has not yet completed its consideration of the revised waiver request. The TRIPS Council will therefore continue its consideration of the revised waiver request, including through small-group consultations and informal open-ended meetings, and report back to the General Council as stipulated in Article IX:3 of the Marrakesh Agreement. The TRIPS Council will also continue in the same manner its consideration of the other related proposals by Members.”
July 1, 6, 14, 21 and 24, 2021 — adding and updating the box on developments in the intellectual property council. July 21 adding the chair’s draft status report. July 24 adding the link to 90-day rule for discussing waivers.
June 5, 2021 — adding a link to the technical paper on the EU’s proposals