Review of the TRIPS Agreement at the WTO: Reforming TRIPS for Global Equity
Newsletter Edition #231 [The Files In-Depth]
Hi,
I am pleased to share that we have published an updated edition of our book: The TRIPS Waiver Negotiations at the WTO: When Intellectual Property Trumped Global Health [ISBN: 9782970162728]. Nearly 700 pages, the volume has about 70 stories published in Geneva Health Files between October 2020, and till about July 2024.
Accompanying the formal book launch, we recently convened a policy dialogue in Geneva on “the Political Significance of the TRIPS Waiver Negotiations”.
The idea of doing this event was to place these negotiations at the WTO in a wider context, and to probe what it can mean for the future, not only for global health, but also in relation to current efforts towards a review of the TRIPS Agreement.
In today’s edition, we bring you experts voices from the discussion we hosted, on what such a review should entail. Later today, WTO members have consultations on how to structure the review over the coming months.
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Priti
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I. ANALYSIS
Review of the TRIPS Agreement at the WTO: Reforming TRIPS for Global Equity
By Priti Patnaik & Nishant Sirohi
There are growing calls to make the intellectual property rules governed by the WTO, more “fit for purpose” to respond effectively to complex crises including health emergencies and climate change. WTO members are discussing a potential review of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), in the light of the policy failures during the COVID-19 pandemic. It has also been 30 years (April 15, 1994), since the Agreement was concluded.
The TRIPS Agreement regulates and enforces the global intellectual property (IP) rules intended to foster innovation. However, recent crises have highlighted its limitation in addressing emerging global challenges, promoting widespread calls for reform. Initiated by Colombia and supported by many developing countries, this review offers WTO member states a timely opportunity to assess how TRIPS can more effectively balance innovation incentives with pressing global health and equity needs.
At a recent policy dialogue organised by Geneva Health Files notable experts and stakeholders in global health proposed numerous recommendations for the review of TRIPS. This story captures some of the key messages and suggestions for reform that was discussed during the event on September 23, 2024 in Geneva.
The discussion on the “Political Significance of the TRIPS Waiver Negotiations” was on the occasion of a book launch. Geneva Health Files has published an updated edition of the book - The TRIPS Waiver Negotiations at the WTO: When Intellectual Property Trumped Global Health. (Available here.)
The speakers at the panel discussion included: Ambassador Guilherme de Aguiar Patriota, Brazil’s Mission to the WTO & other economic organizations in Geneva; Nirmalya Syam, Senior Programme Officer of the Health, Intellectual Property and Biodiversity Programme, South Centre; Sangeeta Shashikant, Legal Advisor, Third World Network; James Love, Knowledge Ecology International; Mustaqeem De Gama, former counsellor at the South African mission to the WTO in Geneva, who authored the TRIPS waiver proposal. (De Gama is currently Head, Legal Governance, IP & Corporate Risk Management, Afrigen Biologics, South Africa.). Below we present excerpts of their remarks.
Later today, the TRIPS Council will continue to discuss the review of the TRIPS Agreement’s implementation under Article 71.1. The consultations are being convened by the TRIPS Council Chair Ambassador Sofía Boza from Chile.
Experts examined and reflected on the limitations and the difficulties in the process of the TRIPS Waiver negotiations. And highlighted why a review of the TRIPS Agreement is important in order to expand the policy space for global health in the context of international trade. Some called for a broader reform of the WTO for better prevention, preparedness and response to health emergencies overall.
The goal of the event was to understand the relevance of these negotiations, not only in the past but also going forward and across forums, including at WIPO and WHO.
Addressing Imbalances in IP and Public Health
The COVID-19 pandemic reinforced the perception that existing IP protections under TRIPS excessively favour private interests, especially of large pharmaceutical corporations, often at the expense of public health.
Reflecting on the relevance of the TRIPS waiver negotiations, Ambassador Guilherme de Aguiar Patriota, Permanent Representative of Brazil to the WTO, noted:
“There is an underlying perception that intellectual property rights have perhaps expanded to a degree where the public interest and private interest balances is no longer easily acceptable by all, especially during an international health emergency that kills people in the numbers that it did with the COVID-19 situation….
The TRIPS Agreement was already born under a perception that developing countries, in a way, caved in to unbalanced demands coming from northern countries and their very large, multinational pharmaceutical companies. It was a sudden change in the regime that was before controlled by WIPO-based treaties. And then, all of a sudden, it crossed the road and came to the WTO. It came under a new, sort of a brand new, much less flexible and [less] forgiving system of obligations and tied to the WTO, and also then a fully functional dispute settlement system. So, there was even an enforcement mechanism that made the rules and the norms much more rigid and imposing upon all members of the global community.
I think what this means is that once the pandemic kicked in, and it demonstrated how serious it was and how unprepared countries were, and how the global trade system and the production facilities were not prepared to respond with the ability that the pandemic required to save lives and to keep people minimally protected and healthy.
I think again, the political circumstances were there that allowed for this proposal by India and South Africa to prosper in a way, because it did prosper, and it did lead to serious negotiations that would not have occurred without the pandemic. And we still have some consequences of that, which is the Pandemic Treaty at the WHO …. they are struggling. But it's a process that only exists because of the COVID-19 health emergency.
Once the emergency sort of fades away, then the political pressure and the outcry also fades away, and then we there's a tendency to get back to business as usual. And then the very strong forces that support this system, the TRIPS IP system, which are very strong because it is a joint action between large multinational companies of the pharmaceutical sector with their respective governments. Usually, they defend the same positions. They are not at all open to any tweaking of the system to make it a little bit more humane, a bit more democratic, a little bit more working to the interest of the public at large, including large segments of the global population that cannot afford IP protected medicines, treatments and diagnostics…”
Enhancing Flexibilities To Prepare For Global Health Crises
Following prolonged negotiations and delayed action, the TRIPS decision adopted at the 12th WTO Ministerial Conference offered only a limited waiver with some clarification of existing rules. This approach proved inadequate for the urgent response demanded by the unprecedented public health emergency, creating significant hurdles for developing countries in accessing COVID-19 medical products.
Mustaqeem De Gama, former counsellor at the South African mission to the WTO in Geneva, who worked on the proposal and, who led the negotiations for the proponents of the waiver, said:
"…. The waiver stands out as a beacon, because from the start, I think, the proponents were adamant that this was not going to be a discussion that would be held within the confines of an organization. We had made the decision that this discussion would be globalized because of the touching points to human rights, for example. It was also the first time that many of the interlinkages between intellectual property and all of the other public policy areas actually coalesced and is presented as an integrated picture.
…I've also heard that the initial proposal was very wide. Yes, of course it was wide. Why was it wide? Because at that time when we brought the proposal, we didn't really know which medical countermeasures, would be effective. There was talk about effective vaccines, but at that time, we didn't have much information.
... [Eventually] this narrowed to the most essential aspects. And so, from that perspective, we were always of the opinion that the waiver should be fit for purpose, should be time bound and should be effective in terms of implementation. … When we did bring the proposal, it was a waiver proposal under Article IX and of course, with all the discussion, it took so long that by the time that we had reached some sort of outcome, the pandemic had already seen almost its end stages.”
Waivers As A Policy Option
Though flexibilities exist in the TRIPS Agreement and Doha Declaration, including - compulsory licensing under Article 31 (TRIPS), and the proviso for a waiver under Article IX (Marrakesh Agreement), the pandemic revealed the ineffectiveness of these provisions. These were burdened by complex procedural and administrative requirements.
Nirmalya Syam, Senior Programme Officer of Health, Intellectual Property and Biodiversity Programme, South Centre, observed:
"I think this is a cause for reflection, actually, that what is supposed to be an emergency measure, a temporary waiver, and is written in the rules, actually took us almost four years to have some sort of an agreement on and which was a compromise leading to a sub-optimal outcome.
This certainly is not what the waiver rules were meant to address, or this kind of an outcome was certainly not what the makers of the WTO agreements would have envisaged. And if we start from that point of reflection, I think we need to look at what the rules say and how far away in practice we have deviated from the rules.
So, if you look at the agreement establishing the WTO, where the rules relating to waivers are enshrined, it essentially says that when there is a proposal that is made in relation to a waiver from obligations under a particular covered agreement, the relevant Council will discuss the matter…to have a first discussion on the matter, and then report the matter back to the General Council or to the Ministerial as the case may be, for a decision, a 90-day period is enshrined.
So, the question to ask is, why was a 90-day period enshrined in the agreement? It was enshrined in order to reach a conclusion in a defined time frame. What we saw in practice was that we ended up in a cycle of TRIPS Council reports coming back to the General Council saying we need essentially more time to come to an agreement and it became a negotiating ping pong. So, this is something that probably needs to be addressed going forward if we are to be better prepared for future pandemics or any other emergency, even in the context of climate, for example.
Is there scope for addressing this? I would say that if you look at the outcome from the 12th Ministerial Conference, which has been reaffirmed in Abu Dhabi in paragraph 4 of the Abu Dhabi Declaration, it clearly states that there is an intent, a commitment, to look at reforming the functioning of the WTO, so not just TRIPS Agreement or TRIPS review as such.
And I say this because the waiver rules are enshrined in the Marrakesh Agreement, it's not specifically a rule in relation to the TRIPS Agreement. There could be potential to look at it in that light, also as moving forward into the realm of the TRIPS review itself.
…. So, in that context, in order to safeguard ourselves from the vagaries of this arduous, long periods, extended negotiations in the next public health emergency, for example, whenever that might occur, god forbid, we would probably need to look at how better to use the rules within the TRIPS agreement itself in the first place. And perhaps use the TRIPS review exercise in order to get to that point.
There could be scope, for example, of looking at it within the realms of Article 30, which allows limited exceptions to be applied, whether waiver type outcomes, without actually negotiating a waiver necessarily. Countries implementing waiver type outcomes from their own volition would be consistent with within the contours of an Article 30 exception because it would be limited, time-bound, in a sense, as long as, for example, a pandemic or a public health emergency lasts… We should look at those contexts when intellectual property rights could be suspended, applications processing could be suspended, or, for that matter, whether a peace clause could be proposed in the TRIPS agreement itself in order to have a built-in sort of waiver in public health emergency contexts.
Of course, you are all aware that in the Pandemic Treaty negotiations there is a proposal that parties should support waivers regardless of what the outcome is. For example, if you get an outcome that parties should agree in the Pandemic Treaty, that they should support a waiver, you would still have to agree to a waiver in the WTO. So, it creates an obligation to support a waiver…. So even if you have that commitment in the Pandemic Treaty that everybody should support a waiver, you would still have to get to that outcome in the WTO, and therefore you need to sort of build in insurances within the system to get there.
(Art 30 Exceptions to Rights Conferred: Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.)
(Both the language on waiver and on the peace clause is still bracketed in the current text of the ongoing pandemic agreement negotiations at WHO.)
Integrating Regional and Global Manufacturing Capacities
The uneven distribution of manufacturing capabilities was a major impediment to equitable access during the pandemic, and experts saw the importance of a review to improve this situation.
Experts said that there needs to be greater freedom to operate for manufacturers to diversify and expand supply options, as the highly concentrated supply chains are unsuitable for addressing public health needs.
Know-How and TRIPS
De Gama from South Africa, added:
“One of the aspects that that is often overlooked in the ministerial outcome is the reassurance on Article 39 (3) on so called know-how, for example, that shouldn't be a barrier. I think in my current position, I do see quite a lot of barriers in terms of access to know-how, but also the kind of concentration of supply capacities.
And if we should have another pandemic, I believe that regionalisation and transfer of capacity to various parts of the world, will essentially ensure that we have a much more fit for purpose platform and the ability to address these. So, from that perspective, I believe that it's important to have discussions about what happens during pandemics, but ultimately, what happens between these pandemics is even more important, and the agreement on rules that are easy to implement and easy to understand would override any political, technical or legal arguments.
...A revised TRIPS [Agreement] should incentivise the regionalisation of manufacturing capacities for critical health supplies, particularly in the Global South. Such a measure would align with the TRIPS Agreement’s Article 7's objectives of promoting social and economic welfare. Such a move would help build resilient supply chains that can meet regional demands in times of crisis.”
(Art 7: The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.)
Review Easing Exports (Re-evaluating Article 31bis)
Experts also see the TRIPS review as an opportunity to improve rules around export of medical products – particularly Article 31bis.
This has of course been a long-running challenge. WTO Members had to work on ways to find a solution for what was called Paragraph 6 of the Doha Declaration on TRIPS and Public Health (2001), that recognised the inability of some countries to make use of compulsory licensing mechanisms for lack of manufacturing capacity. This resulted in the August 2003 decision of the General Council of the WTO, waiving requirements of Article 31 (f) of the TRIPS Agreement, thus enabling a country to export medicines manufactured under a compulsory license to another importing country. The Canada-Rwanda case in 2007 illustrated the problems in using this waiver effectively.
(Even following the amendment, experts point out the territorial and procedural restrictions in making use of these provisions cumbersome.)
Members decided in 2005, to make this waiver a permanent amendment in the TRIPS Agreement. This amendment (Article 31bis) took effect in 2017.
Article 31bis and the TRIPS Decision 2022
Sangeeta Shashikant, Legal Advisor, Third World Network explained how the TRIPS decision improved upon existing rules.
Shashikant explained:
“What we had by June 2022...was very limited, only to vaccines. It was too little and too late…
…But the decision has got good elements for how to approach supply, exports to countries with inadequate manufacturing capacities. I think in terms of procedural elements, it is more feasible. Of course, that decision currently is limited to COVID-19.
So, if you look at 31bis, one of the challenges is that the exporting member will issue a compulsory license, and only the amount necessary in the importing countries will be manufactured, and everything has to be exported. So actually, it's very impractical, because a manufacturer will not have the sufficient economies of scale if the demand is small. A proper manufacturer will be exporting for multiple countries to achieve economies of scale. So, if you look at in terms of practicalities of implementation of 31bis, you'll find that it falls short of what is really required. It's not very practical to operationalise it from a manufacturer's perspective, and that is why it's not really workable.
The 17 June decision is a little bit more flexible in terms of notification and conditions…There is also a footnote for humanitarian purposes…
…A revision of the TRIPS Agreement should enable regional pooling of demand, facilitating economies of scale that make production viable. WTO members should consider refining Article 31bis, focusing on removing barriers that prevent its effective use.”
Review The Double Standards in Using Flexibilities
Critics argue that developed nations exploit TRIPS flexibilities domestically while discouraging similar applications by developing countries. Experts believe that the TRIPS review must examine this.
James Love of Knowledge Ecology International noted:
“At the centre of the negotiation of the TRIPS waiver was, in the beginning, it was quite broad, but as it sort of ended, it was on this issue of whether or not you restrict exports under a compulsory license to a patent, as well as some provisions on know-how. And it was, always been appalling to me that the WTO, as an organisation set up to liberalise international trade and anyone that studies trade knows the heart of justification of trade is that economies of scale and comparative advantage are critical in economic progress and efficiency….
….During the COVID crisis itself a Canadian manufacturer of vaccines had an agreement with the Bolivian government to make a generic version of a vaccine and import it into Bolivia. And Bolivia made its notification to the WTO of its intent to use this provision as an importer, but Canada refused to put COVID-19 on the list. [schedule to issue CLs] ….It was kind of an astonishing decision, actually, that Canada, while they're in the WTO negotiations on the TRIPS waiver, were claiming how great the existing rules were…., wouldn't even acknowledge the COVID-19 was a public health problem right in the middle and the worst part of the pandemic.
…So, part of the problem are the rules, and part of the problem are the implementation of the rules, and the political pressure on countries who try and use them.
One of the things that we'd like to see come out in any kind of discussion about where TRIPS stands right now is how the EU and the United States have used exceptions in the TRIPS agreement in ways that are not being used in developing countries for the most part.
Beginning with a Supreme Court decision involving an online auction house, eBay decision involving patents on online auctions and the widespread use of the government use permissions in the United States. Well, what I think has become quite obvious is the United States completely ignores any restrictions on exports under a compulsory license when those compulsory licenses are implemented under a different the part of the TRIPS, Part III, that deals with enforcement.
In Article 44 of the TRIPS, the WTO rules and the TRIPS, they allow countries to export even 100% of output without prior negotiation or even notification of patent owners, if there's some measure in place to compensate patent orders.
And that is what the US did in over 50 contracts that we have obtained during COVID-19, but over probably thousands of contracts over time, in terms of government use contracts that authorise the use of patent inventions.
This is even for products are not even sold in the United States, like treatments, for example, for diseases of which there is no incidence in the United States. The same thing is true with the so-called eBay compulsory licenses, where a judge can basically grant a compulsory license even when 100% of the production is outside the United States, which we see in some cases.
The EU also, in their new proposed regulation on compulsory license emergencies proposes not only one compulsory license to cover almost 30 different countries at the same time, but they also explicitly are proposing in the regulation that the compulsory license include not only rights on patents, but require people to compel countries to share manufacturing know-how, trade secrets, access to reference products, all sorts of things that are unrelated to the patent.
Importantly, during COVID, the argument against the use of compulsory license was often that you didn't have the know-how to make the overriding the patent useful. And the EU in their own regulation, says you can actually compel everything else that you need. And the Defence Production Act in the United States has the same provisions. The United States allows you to get to compel anything that's necessary to make a product.
So, the US and the EU, they have this double standard. They have like one, one thing that they that they will do themselves, if it's in their interest. Then they want to maintain kind of a narrative in Geneva that ‘these things should never be done, they are not necessary, they won't work’. And that's that what you saw in the TRIPS negotiations”
Expectations from the TRIPS Review
Clearly there are a range of expectations on what the TRIPS review must accomplish.
Brazilian Ambassador Patriota said:
“Review doesn't mean reopening or rewriting, we are clear on that, but it does mean some sort of critical assessment that based on facts or based on measurable benchmarks as to how the supposedly the treaty that's meant to protect innovation and the modern modernisation of technology on a perpetual basis, whether it really does that.
And to what extent do societies that are less affluent have to play a high price for that in terms of lack of access or lack of affordability for all that is produced under the system.
Also, even the innovation side of it, is questionable. If you really put the hard facts on the table, to the extent that protection exceeds the required protection for innovation, then you have an abusive system that, in fact, slows down innovation because it's protects for longer and longer period of times certain existing technologies that are very profitable for the patent holders, and it holds back the entry into the market of newer and better technologies, because they will extend to the maximum degree possible their profits over time, if they can.”
De Gama from South Africa said:
“I think in terms of the review of the TRIPS, we have to understand that, you know, it's an agreement that's been crafted, and there's quite a lot of history behind it. Now, of course, COVID-19 showcased a lot of the practical difficulties. And so, if, I was to say, well, if we limited this review to the TRIPS Agreement, where would it leave us?
To a certain extent, I'm also compelled to look at other parts of the Marrakesh agreement, especially those that relate to Trade Related Investment Measures, for example, because ultimately, what we want is that countries are able to take up autonomous manufacturing capacity, build the supply chain networks and so forth. And as a result, I believe that the TRIPS Agreement read, with all of the other exceptions, it should endeavour to actually deliver, not necessarily on the physical words, but the spirit behind these words…So instead of focusing narrowly only on what IP does, focus also how IP interacts with other disciplines and how these collectively maybe bottlenecks, including, you know, trade restrictive measures where you have supply of reagents, for example…”
Tailpiece: Pandemic Treaty & TRIPS
As the TRIPS Council undertakes this critical review, the recommendations outlined above outline key features to be examined in the prevailing TRIPS Agreement. This review of TRIPS is more than a technical exercise; it is a critical moment to align global intellectual property norms with the reality of emerging global challenges.
Irrespective of the discussions on using TRIPS flexibilities in a Pandemic Agreement, WTO rules will need to speak to new obligations at WHO. This will be difficult to say the least.
Ambassador Patriota said:
“If you adopt the Pandemic Treaty, even if you claim that in light of declared international emergency declared by the WHO Director-General, it would trigger some sort of flexibilities, or a suspension of certain IP related obligations for members to deal with the emergencies…. but it would have to be sort of incorporated into the body of rights and obligations of the WTO. So, it's not enough.
We just ended a treaty at WIPO on a disclosure of origins requirement, and so it is adherence to the treaty, and once the treaty enters into force, will have to comply with that obligation and adopt it in national legislations.
Does it automatically get recognized by TRIPS? No. You have to sort of raise it within the WTO and you require the acceptance of members - a consensus within WTO to cross reference that and to sort of recognise it within the WTO system. So, the different organisations, they are not connected legally in any automatic way. So, it makes things even more difficult.
I think we have a sort of trilateral coordination amongst the Secretariats WIPO, WHO and WTO, they meet often. They have these seminars, but it's not a legally consequential kind of coordination that they cannot change that order of things. So, the organisations and the obligations they are shielded.
Nevertheless, I think the Pandemic Treaty would be incredibly important, if it were to adopt some sort of an agreement to support a waiver. Of course, that would be politically meaningful. But then we do have to do something, take it up within WTO later on.”
GROUP CONSULTATIONS ON THE REVIEW: OCTOBER 9, 2024
WTO members are resuming discussions on the review of the TRIPS agreement at a meeting convened by the TRIPS Council Chair Ambassador Sofía Boza from Chile. During these group consultations on October 9 at the WTO, countries are expected to discuss the format, methodology and timeline for the review of the implementation of the Agreement mandated by Article 71.1 of the TRIPS Agreement.
According to the draft common elements [Restricted document: JOB/IP/79/Rev.1] drawn up by the chair following consultations with countries, key features of a proposed review include using a section-by-section approach guided by the structure of the Agreement; that it should be member-driven, providing information on domestic implementation that would mean sharing experiences, challenges, and best practices.
The chair has proposed that much of the review will be conducted in informal meetings (“normally scheduled back-to-back with the formal meetings of the Council”). Additional informal meetings and consultations with experts are envisaged as needed, and it will be accompanied by an oral report provided by the Chair, according to the document.
This is expected to be a two-year process, in order to provide “enough time for substantive deliberations while also identifying a clear endpoint of the review cycle”, the document said. The review is expected to conclude with a factual report on the process.
The two-year process will involve discussion on guidelines, call for submission of proposed topics, submission of written proposals, sharing national implementation experiences, thematic sessions, substantive discussion of implementation review.
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I wish somebody could summarize what the TRIPs agreement mean in lay people language. I have always had difficulties understanding what the issues are