Is Waiving IP Protection to Combat COVID-19 Worth the Risk of Stifling Innovation?

Is Waiving IP Protection to Combat COVID-19 Worth the Risk of Stifling Innovation?

The Biden administration recently put its weight behind a push for more sharing of the technology behind COVID-19 vaccines to help speed the end of the pandemic. This positions the U.S. next to many in the developing world who want rich countries to do more to get doses to those in need.

The move comes amid World Trade Organization talks about a possible temporary waiver of its protections that would allow more manufacturers to produce the life-saving vaccines.

United States Trade Representative Katherine Tai announced the government’s position stating, “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.”

Tai’s announcement came hours after WTO Director-General Ngozi Okonjo-Iweala spoke to a closed-door meeting of ambassadors from developing and developed countries that have been wrangling over the issue but agree on the need for wider access to COVID-19 treatments.

She cautioned that it would take time to reach the required global “consensus” to waive the protections under WTO rules, and U.S. officials said it would not have an immediate effect on the global supply of COVID-19 shots.

Challengers — particularly from industry — say a waiver would not be a cure-all. They insist that the production of coronavirus vaccines is complex and can’t be ramped up by easing intellectual property. They also say lifting protections could hurt future innovation.

What’s at stake?

Patents

In normal circumstances, there is a risk that developers of vaccine technology will enforce their patent rights against infringers using it without permission. The legal systems of all technologically sophisticated countries are careful to recognize valid patent rights, as with all legal property rights. Not doing so or waiving this protection could create uncertainty and discourage investment in research and development.

TRIPS (Trade-related aspects of intellectual property rights) waiver

Proposed to the WTO by India and South Africa back in October 2020, a TRIPS waiver would relinquish the obligations of the trade-related aspects of intellectual property rights. According to the WTO, the waiver would “last for a specific number of years, to be agreed by the General Council, and until widespread vaccination is in place globally and the majority of the world’s population is immune. Members would review the waiver annually until termination.

While the recent focus in the media has been on patent rights, the proposed waiver goes much further. It covers all IP rights, including trade secrets, relevant to protecting the vaccine and the optimal manufacturing processes for producing it safely and effectively at an industrial scale.

Overriding rights

Given that patents are state-granted monopolies, the state is usually prudent to reserve the right to override the patentee’s property rights in extraordinary circumstances. As a result, most national patent systems have a mechanism to grant compulsory licenses where the invention can be made available more broadly if public policy or public health demands it.

This begs the question: why don’t the countries requesting access to vaccine patents not merely invoke these provisions? It seems most likely that each country is waiting for the other to make this move – there’s safety in numbers.

Trade secrets

Trade secrets are essential, particularly in biotechnology. The value of a trade secret only exists while the secret is undisclosed. Once the information becomes common knowledge, accessible to all, it loses its proprietary value. Therefore, the proposed waiver will impact this area the most seriously. Enormous investments have been made not only in the development but in keeping secret the optimum manufacturing processes for each of the successful Covid-19 vaccines. Once disclosed, how would a company return to actively protecting its trade secret that isn’t a secret?

The bottom line

Getting control of the pandemic and bringing it to an end as quickly as possible will have enormous global health and economic benefits. It’s hard to disagree with the overriding intentions of making life-saving technology available to all. However, this vital innovation comes at a price, which is paid in the form of research and development invested in by biopharma companies and protected by rules that are hundreds of years old. If these actions devalue the investment companies make in producing critical drugs and delivery mechanisms, then innovation is likely to suffer, and in the long run, that will hurt humankind.

If you have any questions or need advice on IP protection, please email Allan RooneyTim DavisElannie Damianos, or Abbey Docherty or call +1 212 545 8022.

 

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 This article is one of a series intended to de-mystify common legal issues for the non-lawyer and entrepreneur audience – they are designed to foster discussion and is by no means exhaustive. These materials are for informational purposes only. Nothing herein is intended nor should be regarded as legal advice. The distribution of this article to any person does not establish an attorney-client relationship with our firm. Rooney Nimmo assumes no liability in connection with the use of this publication. This bulletin is considered attorney advertising under the applicable rules of New York state. Rooney Nimmo UK is regulated by the Law Society of Scotland and Rooney Nimmo US by the New York rules of professional conduct. All attorneys and solicitors listed in this firm stipulate their jurisdictional limitations. Rooney Nimmo in the USA is a law firm registered as a New York State professional corporation.

 

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