On June 17, the 2022 Ministerial Conference of the World Trade Organization (“WTO”) issued a decision [PDF] pursuant to the Agreement on Trade-related Aspects of Intellectual Property Rights (“TRIPS Agreement”) and allowed certain members to use patented inventions for the production and supply of COVID-19 vaccines in specific circumstances (“Ministerial Decision”).
1. Background on TRIPS and the WTO
The WTO has a mandate to liberalize international trade. To do so, it offers to governments a forum to negotiate trade agreements and to settle trade disputes. The WTO also administers a system of trade rules.
The TRIPS Agreement is one of these trade rules and negotiated trade agreements. It requires WTO members to adhere to minimum standards on patents, copyrights, trademarks, and other rights and to implement these obligations domestically.
2. Early Claims for TRIPS WAIVER
In October 2020, India and South Africa proposed to the WTO to waive the application of certain provisions of the TRIPS Agreement for the duration of the COVID-19 pandemic to facilitate access to technologies, methods and means to produce and export vaccines, diagnosis, medical devices, personal protective equipment to prevent, treat or contain the COVID-19 virus.
In December 2021, India, South Africa, the US and the EU entered closed-door quadrilateral discussions (QUAD) before the WTO TRIPS council to try to reach a compromise. Soon after, on March 15, 2022, a draft waiver was leaked to the public. At the time, many stakeholders in the pharmaceutical industry voiced their concerns regarding a potential waiver of patent protection, advocating in favour of voluntary licensing and transfer agreements, patent pooling, and not enforcing patents during the pandemic.
3. The MC12 Ministerial Decision on TRIPS
The Ministerial Decision is largely consistent with what was proposed in the draft QUAD waiver. The Decision authorizes an Eligible Member State to use of the subject matter of a patent (defined as “ingredients and processes necessary for the manufacture of the COVID-19 vaccine”) to produce and supply COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic. This use may be authorized through executive orders, emergency decrees, government use authorizations, administrative or judicial orders. This authorization is unrelated to whether a Member State already has a compulsory licensing system in place or not.
More specifically, the Decision provides that a user of the subject matter of a patent will not be obligated to make efforts to obtain the authorization from the right holder before using the subject matter of the patent. A Member may also allow any proportion of the products manufactured under the authorization to be exported to Eligible Members. However, Eligible Members must take reasonable efforts to prevent re-exportation of the products and Members must ensure that there are effective measures in their own territory to prevent the importation and sale of the products manufactured. Finally, the determination of adequate remuneration to the right holder may take into account the humanitarian and not-for-profit purpose of specific vaccine distribution programs.
The Decision applies for five years but may be extended due to the “exceptional circumstances of the COVID-19 pandemic.”
Finally, the Decision requires Members to decide within six months whether they will extend the dispositions to cover the production and supply of COVID-19 diagnostics and therapeutics. Other areas of uncertainty remain, such as the definition of “Eligible Member States” which currently includes all developing countries, a status that is self-proclaimed by these states.