The Contested Space of Intellectual Property Rules in a Pandemic Agreement: Terms of Technology Transfer & the Unease with the Peace Clause [INB9]
Newsletter Edition #89 [Treaty Talks]
Hi,
Among the competing priorities dominating the attention of negotiators in Geneva working on a new Pandemic Agreement, crafting obligations on technology transfer to address Pandemic Prevention Preparedness and Response, has been one of the toughest tasks.
In this edition, we focus on the discussion around technology transfer and examine why this has been so contentious.
Countries continue to make simultaneous progress across different provisions in these negotiations. We are striving to bring you snapshots of some of these discussions as they evolve.
I was asked recently why our coverage has been focused on these negotiations and why the Pandemic Agreement is such a big deal. For one, there is fair amount of reader interest on these matters. Second, some of these unresolved issues have legacy status in global health. That countries are sinking their teeth into these intractable policy choices in the context of treaty-making makes it incredibly important. These matters go beyond the legal instrument in question, and will have an impact in other fora, and in capitals.
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I. ANALYSIS: PANDEMIC AGREEMENT NEGOTIATIONS
The Contested Space of Intellectual Property Rules in a Pandemic Agreement: Terms of Technology Transfer & the Unease with the Peace Clause
The governance of intellectual property in health emergencies caused much grief during the pandemic of COVID-19, when countries struggled to agree on the trade response in swiftly addressing the access to medical products. The pandemic petered out, even as countries, as members of the World Trade Organization, ultimately failed in articulating such a response. Since then, the discussion has moved to the WHO, as countries are working to put in place legal mechanisms around Pandemic Prevention Preparedness and Response.
As the UN’s only technical agency, and as the nucleus of global health policy-making, WHO has been seen as an important venue for safeguarding health from commercial interests.
IP in global health has been one of the most polarizing policy matters that has cleaved countries on this issue. In the context of current discussions, efforts are on, to not only reaffirm existing commitments to preserve policy space, but to also strengthen language. A spectrum of obligations in the Pandemic Agreement seek to protect this policy space – but we do not know yet if such efforts will ultimately feature in the final text.
As one of the most debated provisions in a new Pandemic Agreement, the issues of production and technology transfer, have seen sustained interest, and yet consensus has so far alluded WHO member states given the implications of intellectual property in the governance of Pandemic Preparedness Prevention and Response.
The conditions for technology transfer have dominated much of the negotiations with many developed countries suggesting the use of “Voluntary and Mutually Agreed Terms”. Developing countries prefer tougher terms in the context of health emergencies. Activists caution against obligations that would make status quo worse, while the industry, and other stakeholders, prefer voluntary terms.
The overall push is for empowering all regions and in diversifying production for better preparedness during emergencies, in trying to put in place long-term strategies to improve access, going beyond the immediate concerns on availability and affordability of medical products.
In the draft Agreement, Article 10, 11 govern production, technology transfer and related IP issues, respectively. In this story, we examine some of the key elements in these provisions and how they are being dealt with. We base this analysis on discussions on the text as on May 7th 2024.
ON PRODUCTION & TECHNOLOGY TRANSFER
One of the more progressive provisions under discussion in the Pandemic Agreement, is one on production that experts say will be significant in recognizing the importance of diversifying manufacturing and production in an international instrument.
We have reported earlier, on how negotiators from developing countries, and others, have nurtured a series of provisions to establish a link between production, technology transfer, and supply chain, to address an end-to-end system to ensure access to medical products during emergencies. Article 10 on production, for example, the foundation of subsequent articles.
Implications of “VMAT” [Voluntary, Mutually Agreed Terms]:
Outside of the Pathogen Access Benefit Sharing provisions, that is centre stage in these negotiations, Article 11 on technology transfer and related IP issues is one of the most crucial provisions in the Agreement.
The thrust of the provision is for countries to boost transfer of technology with a view to enabling sustainable and geographically diversified production. Countries are divided along the ways this goal can be accomplished. The provision addresses licensing, transparency, and using existing policy options in other international instruments including the WTO TRIPS Agreement.
At the heart of the disagreement are the terms of technology transfer – where developed countries have been keen on qualifying this with Voluntary and Mutually Agreed Terms [VMAT].
In the long, much debated discussions on the TRIPS Waiver discussions, developing countries often pointed to the limitations of a voluntary approach at the height of the pandemic. (See also this recent statement from Moderna in April 2024: Statement on Kenya Manufacturing Facility)
Access to medicines experts and activists, have clarified that a WHO agreement should not prevent countries from taking steps including those that are regulatory or mandatory in nature to ensure the access to medical products when voluntary approaches do not work. They argue that enshrining VMAT in a Pandemic Agreement could be interpreted in a manner that could dissuade countries from using mandatory approaches that have been recognized under the TRIPS Agreement, and are referred as TRIPS Flexibilities. They also point out that mandatory approaches have been incorporated as preferred policy options both in the U.S. and in the EU – who are among the fiercest proponents of VMAT in these discussions.
We learned that in a bid to find compromise language, Brunei suggested “without prejudice” to qualify the VMAT insertion. See below, emphasis in bold, ours.
We share excerpts of the text at the conclusion of the discussions on May 7 2024. These do not reflect country positions. The text has been seen by Geneva Health Files:
1. Each Party shall, in order to enable the sustainable and geographically diversified production of pandemic-related health products [for the attainment of the objectives of this instrument], and taking into account its national circumstances:
(a) Promote and otherwise facilitate or incentivize transfer of technology, skills and know-how on [voluntary and mutually agreed terms, without prejudice to other measures a Party might take,] for pandemic-related health products, in particular for the benefit of developing countries [and for technologies that have received public/government funding for their development], through a variety of measures such as licensing, capacity building, relationship facilitating, incentives or conditions linked to research and development, procurement or other funding, regulatory policies, and/or fiscal policies;”
See note by Knowledge Ecology International, a key stakeholder in these discussions, advising countries on legal aspects of access to medicines. The six references to “mutually agreed terms” in the WHO pandemic agreement negotiating text, where KEI evaluates “the extent to which the use of the term can and predictably will be used to discourage developing countries from considering measures which have a regulatory or other mandatory character, even when strong mandates are used in higher income countries.”
The note explains: “The phrase "mutually agreed terms" generally refers to conditions or stipulations that have been specifically negotiated and accepted by all parties involved in a contract or agreement. However, when certain terms are mandated by statute, they aren't technically "mutually agreed" in the purest sense, because the parties are required to adhere to these terms regardless of their personal agreement or preference.”
The note lists statutes in the U.S., and regulations in the EU to this effect. It asks “Why are so many references to mutually agreed terms attached to technology transfers? The U.S. government, the European Union and other parties to this negotiation do not and will not limit their options to only those purely voluntary measures that can be described as “mutually agreed terms,” and it would be irresponsible for any government to do so, in the context of pandemic preparedness and response.
The references to “mutually agreed terms” are included in the text to promote a harmful and inequitable double standard and a predictable pretext for bilateral pressure when a developing country attaches conditions to funding or procurement agreements, regulatory approvals or other measures that powerful commercial interests oppose.”
On the access to know-how:
On other elements in Article 11, in her analysis, Ellen ‘t Hoen, points out the importance of the access to undisclosed information and know-how “in enabling compulsory patent licences to work effectively.” “Granting pandemic related compulsory patent licences could be rendered ineffective without this access. Powers therefore have to be in place to guarantee that access can be obtained in a non-voluntary way during a pandemic if voluntary agreement fails,” she has said. (See: The last mile: A few suggestions for the WHO Pandemic Agreement’s last two weeks of talks.)
Status of the text under negotiation on this:
“Encourage [seek to ensure] manufacturers within its jurisdiction to [voluntarily] share information [which they deem appropriate] during pandemics, [as appropriate] , and in accordance with national law and policies, that is relevant to the production of pandemic-related health products with appropriate third parties, [when the withholding of such information prevents or hinders those parties] who [lack the know-how needed] do not have the information for the urgent manufacturing of [pharmaceutical] such products that is necessary to respond to the pandemic.”
"The reason why the MAT and VMAP language is appearing everywhere recently is that the US, EU and pharma in particular are trying to shut down compulsory measures on know-how. They have given up pretending TRIPS does not allow compulsory licensing of patents, but they are trying to make know-how protected from compulsory measures. However, but the USA and the EU clearly also see their own legislative framework as allowing mandates on know-how sharing,” James Love of Knowledge Ecology International told us.
THE SIGNIFICANCE OF AN AMENDMENT IN NEW YORK
While these discussions continue in Geneva, a significant development relevant to these provisions, took place in New York last week, when member states overwhelmingly pushed back against an amendment brought by Switzerland to a UN General Assembly Resolution on Global health and foreign policy: addressing global health. Switzerland wanted to insert “on voluntary and mutually agreed terms” after “transfer of technology and know-how”.
“We are grateful to Switzerland for bring this amendment. Now there is a clear communications from member states to push back against this langauge.” a developing country negotiator from Asia told us at WHO this week.
Also see a KEI report on the discussion that reveals voting on this.
Here is a press statement on the discussion in New York:
“…The Assembly also adopted some other texts, among which was the draft resolution titled “Global health and foreign policy: addressing global health challenges in the foreign policy space” (document A/78/L.62), as amended. By the text, the 193-member organ urged Member States to continue to consider health issues in the formulation of foreign policy.
Introducing the draft, the representative of South Africa emphasized that “no single country can overcome a global pandemic on its own”. The text, therefore, addresses international efforts to strengthen global health and recognizes that the supply of health products and access to relevant technology must be secured for all countries. Additionally, he said that the text urges for timely, equitable and unhindered access to safe, affordable, effective and quality medicines, vaccines, diagnostics and therapeutics — especially during health emergencies.
Some delegations, however, proposed revisions to the text. The representative of Belgium introduced an amendment to operative paragraph 22 (document A/78/L.64), stating that although the word “unhindered” is not a taboo, European Union delegations “cannot accept false narratives about sanctions, intellectual-property rights and possibly other unnamed issues behind opaque formulations that are then used against us in other discussions”. He therefore asked for this term to be deleted, adding that his delegation will disassociate from it if the amendment does not pass.
Introducing another amendment (document A/78/L.65) was Switzerland’s representative, who — despite joining consensus on large parts of the text — disassociated from preambular paragraph 29 as it “seriously undermines the protection of intellectual-property rights by omitting the caveats on the transfer of technology and know-how”. She therefore proposed including the caveats “on voluntary and mutually agreed terms” in that paragraph…”
Protecting the Peace Clause:
There is also disagreement on the “peace clause” in Article 11, where developing countries are seeking assurances that that they will not face pressure in light of using TRIPS flexibilities. See below the text in bold that is in brackets suggesting a lack of consensus.
Reportedly some developed countries are denying that developing countries have been under pressure – contrary to documented instances in the past.
“The Parties that are World Trade Organization (WTO) members reaffirm that they have the right to use, to the full, the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and Public Health of 2001, which provide [flexibilities][flexibility] to protect public health including in future pandemics. [, and that they fully respect the use of the TRIPS flexibilities by WTO members] [, that is consistent with the TRIPS Agreement]. These Parties respect the use that is consistent with the TRIPS Agreement of [this flexibility] [these flexibilities]. and fully respect the use of those flexibilities. by WTO members [and shall respect their use by WTO members,] [and shall not exercise any direct or indirect pressure to that effect.]”
Implications of Tech Transfer Language in a Pandemic Agreement and the Risk of Investor Disputes
Activists also caution that negotiators must put in language in the Pandemic Agreement to insulate states from being dragged into disputes. KEI suggests, “Negotiators should include language in the Pandemic Agreement that provides assurances that nothing in the agreement creates an obligation on parties that can be construed to create a claim in an investor-state dispute settlement (ISDS) mechanism.”
In a note, KEI draws a potential scenario:
“Depending upon how ultimately stated, restrictions on state actions to force the transfer of technology may lead to actions by private investors through an Investor-State Dispute Settlement (ISDS) arbitration or an investment court system (ICS). If a country has agreed to limit measures on technology transfer to mutually agreed terms in a World Health Organization (WHO) treaty or agreement, and then implements compulsory measures that contradict these terms, the situation could potentially lead to an ISDS claim under a different agreement, such as a bilateral investment treaty (BIT) or a free trade agreement (FTA) that includes ISDS provisions.
The key issue is whether there is a contradiction between the country’s obligations under the proposed WHO agreement and its obligations under another treaty which includes ISDS provisions. Investors might argue that the compulsory measures violate the agreed terms of technology transfer, and are contrary to the investor’s reasonable expectations of the protection of its technology. The investor would need to demonstrate that the host country’s actions constitute a breach of the treaty’s exclusive reliance on mutually agreed terms, and that as a consequence, more compulsory measures represent a direct or indirect expropriation, on the grounds that the compulsory measures directly impacted the value of its investments.”
Tailpiece:
Developed countries continue to stall any references to temporary suspensions on IP rules during emergencies. For the moment, developing countries continue to push for the language - albeit weakened.
The language on “waiver” stands as follows:
Each Party shall [consider] supporting, within the existing framework of relevant international and regional organizations, appropriate time-bound measures to accelerate or scale up the manufacturing of pandemic-related health products, to the extent necessary to increase, [on non-commercial terms], the availability [and adequacy] [and sustainability] of affordable pandemic-related health products during pandemics.
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