Context

At the height of the COVID-19 pandemic in October 2020, India and South Africa had tabled a proposal seeking a temporary waiver on COVID-19 related products from the TRIPS. Nearly 18 months later, 164 members of the WTO could not find common ground on the “waiver proposal”.

How will the waiver help?

•  The application and enforcement of intellectual property rights (IPRs) are affecting the timely provisioning of affordable medical products to patients.
• Therefore, India and South Africa argued that therefore, argued that “rapid scaling up of manufacturing globally” was “an obvious crucial solution to address the timely availability and affordability of medical products to all countries in need”, and for doing so, IPRs must be waived for at least three years. 

The EU solution

• The EU had proposed in a submission in June 2021 that “[c]ompulsory licences are a perfectly legitimate tool that governments may wish to use in the context of a pandemic”.
• India and South Africa, the movers of the “waiver proposal”, are among the four countries that found a “compromise outcome”.
• Only vaccines are included: The solution is a severely truncated version of the “waiver proposal” in terms of product coverage, as only vaccines are included.
• Generally, patent laws, including that of India’s, allow for the grant of compulsory licences if patent holders charge high prices on the proprietary medicines in exercise of their monopoly rights.
• Moreover, such licences can usually be granted if efforts in obtaining voluntary licences from the patent holders have failed.
• The EU proposal states there that in case of a medical urgency, as is the case now, this condition will be waived.
• The proposal also provides that WTO members would be able to issue compulsory licences even if they do not currently have the provisions to issue them under their national patent laws.
• Compulsory licences can even be granted using executive orders, emergency decrees, and judicial or administrative orders.

Issues with the EU solution

1] Eligible member criteria

•  The waiver solution can be used only by an “eligible member”, defined as a “developing country member” of the WTO that “had exported less than 10 percent of world exports of COVID-19 vaccine doses in 2021”.
•  This means that Bangladesh, which is still a least developed country, but has a growing pharmaceutical industry, is also excluded.
• Restricting China: The eligibility condition seems to have been introduced to limit China’s expansion in the global vaccine market.
• No concern for India: At the current juncture, India does not have to be concerned with the export restriction clause, as its share in global exports of vaccines was 2.4% as on January 31.

2] Export restrictions in the form of eligibility criteria

• While introducing the above-mentioned export restriction, the solution proposes to waive the obligation under Article 31(f) of the TRIPS Agreement.
• Article 31(f) provides that the compulsory licences issued by any WTO member must be used “predominantly for the supply of the domestic market”.
• But while they have proposed removal of Article 31(f), solution includes a more stringent export restriction in the form of the eligibility criteria mentioned above.

3] Further conditions

• The proposed condition of listing all patents covered under the compulsory licences is not a requirement under the TRIPS Agreement.
• Similarly, there is no obligation to notify the details of licensee, the quantity and export destination under the TRIPS provisions.
• But the EU proposal text proposes mandatory notification.

4] Transfer of know-how is not ensured

• According to the EU, when compulsory licences are granted, the “patent holder receives adequate remuneration”, but “[t]ransfer of know-how is not ensured”.
• This demerit of compulsory licences would make it difficult to scale up production of COVID-19 vaccines, medicines, and medical devices in the developing world, thus constraining their availability at affordable prices.

Conclusion

It must be said that by accepting the “compromise outcome”, India and South Africa could jeopardise their high moral ground.  Consequently, the global community would lose an important opportunity to ensure that vaccines and medicines are accessible to all.

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