Reader in Trade & Maritime Law
University of Buckingham
The multilateral trading system’s functioning was reviewed by the Ministers from Member States during the WTO’s twelfth Ministerial Conference (MC12) was held between 12 to 17 June 2022 in Geneva. The MC12 produced a set of agreements called the ‘Geneva Package’ covering several issues, including a waiver of certain requirements concerning compulsory licensing for COVID-19 vaccines (WT/MIN(22)/30/WT/L/1141). This brief paper is concerned with efforts taken by some Member States of the WTO for the partial suspension of the TRIPS Agreement in relation vaccines during the VOCID-19 pandemic, and its outcome at the MC12.
An unprecedented proposal for partial suspension of TRIPS was submitted by India, and South Africa to the WTO’s TRIPS Council in October 2020 in the wake of the COVID-19 pandemic [(IP/C/W/669) (2 October 2020)]. The TRIPS-waiver proposal sought the suspension of ‘Sections 1, 4, 5 and 7 of Part II of the TRIPS Agreement … [and related enforcement] under Part III of the TRIPS Agreement … in relation to prevention, containment or treatment of COVID-19’. This proposal also covered copyrights, industrial designs, patents, and the protection of undisclosed information, as they related to ‘health products and technologies like test kits, masks, medicines, vaccines, components of ventilators like valves, control mechanisms and the algorithms and CAD files used in their manufacturing’. The proposal had the support of over 100 Member States, over 300 civil society organisations, the WHO, the UNITEAID, the CESCR, the South Centre, etc.
The original proposal pursued a limited period of waiver, i.e., until ‘widespread vaccination is in place globally, and the majority of the world’s population has developed immunity’. At the time of lodging the proposal in October 2020, no vaccine or medicine were invented to prevent the spread or treat the COVID-19 virus. The proposal arose out of concerns prevailing in the developing country Member States about the lack of access to diagnostics, vaccines, medical devices, and other health products. At the time when the pandemic broke out, the global supply of antiviral medicines, and PPEs were limited and not easily accessible. The situation was further exacerbated by nationalist approaches to acquiring antivirals, PPEs, etc. Reports also emerged that major pharmaceutical companies had charged developing country Member States higher prices for COVID-19 vaccines than their developed country counterparts.
The proposal was well received in the developing country Member States, but not amongst the developed country Member States and some policymakers. One of the strongest criticisms to emerge came from a former presiding judge of the WTO’s Appellate Body, James Bacchus. With the election of President Joe Biden, the US stance on the proposal changed from being totally opposed to offering limited support to text-based negotiations with a view to ending the pandemic. The US stance, which was a clear departure from its earlier stance on patent rights, sent out a strong signal that it does not oppose others from waiving patent protection for vaccines. Buoyed by the United States’ stance, a revised proposal was submitted by India, South Africa, and other sponsors on 21 May 2021, which highlighted the then prevailing emergency, necessitating the need for a waiver. The revised proposal garnered more support from both WTO Member States and other organisations. The revised proposal sought for a waiver to ‘be in force for at least 3 years’, which period was to be reviewed by the General Council (per Article IX.3 of the WTO Agreement) to determine if further extension was necessary on the waiver. Despite a renewed support for the revised proposal, the European Union (EU), along with the United Kingdom continued to oppose the waiver. The EU in turn submitted its own proposal, which called for the continued use of available flexibilities under the TRIPS Agreement using Articles 31 and 31bis, without recourse to any waivers.
The EU proposal was not agreeable to most developing country Member States, as it was inadequate and did not propose anything different from the existing position outlined under the TIRPS Agreement. The developing country Member States felt that any consideration of the EU’s proposal would take away the time needed to engage in useful negotiations for any waiver of the TRIPS Agreement. It should be noted that pursuant to paragraph 6 of the Doha Declaration on TRIPS Agreement and Public Health, which was adopted during the Ministerial Conference in November 2001, recognised that WTO Member States with insufficient or no manufacturing capacities in the pharmaceutical sector the right to compulsory licensing and parallel importing. It is well-documented that the developing country Member States come under pressure from developed country Member States, whenever they seek to exercise their rights contained in paragraph 6. One of the arguments presented by the opponents of the TRIPS waiver is their opposition to the elimination of any incentives that are essential for promoting innovations in the pharmaceutical sector.
By June 2021, the Member States of the WTO agreed on text-based negotiations on the waiver proposal alongside the proposal tabled by the EU. The negotiations that followed primarily focused on the scope and duration of the waiver, and the protection of undisclosed information. The MC12 which was originally scheduled take place in November 2021 was postponed to a later date. The EU, India, South Africa, and the United States entered ‘quadrilateral consultations’ in December 2021 to find common grounds to strike a comprised deal. A consensus, or a compromise, was reached by the key negotiating parties sometime in March 2022. Although no details were revealed by the WTO, the draft was leaked to the media.
From the leaked documents, commentators were quick to point out that the Quad Proposal was more in line with the proposal tabled by the developing country Member States than the one proposed by the EU, and that was still far from desirable, and hence unworkable. Besides, the Quad Proposal focused only on patents, and confined to vaccines as opposed to diagnostics and therapeutics, which was much sought after by the developing country Member States. To further complicate matters the Quad Proposal required eligible developing country Member States to i) ‘undertake all reasonable efforts to prevent the re-exportation of the COVID-19 vaccine that ha[d] been imported into their territories under this Decision’, and ii) required the countries seeking authorisation to list all patents covered for the production and supply of a COVID-19 vaccine. Despite its shortcomings, paragraph 3(c) of the Quad Proposal included provisions to support donations to other Member States.
The Ministerial Decision
On 17 June 2022, after much deliberation at the MC12, the WTO Member States adopted the Ministerial Decision on TRIPS Agreement. Most interestingly, it evolved from the Quad Proposal. Unlike the waiver proposed by India and South Africa, which covered four types of intellectual property rights, in addition to other health products and technologies, the Ministerial Decision covers only patent rights and COVID-19 vaccines. Pursuant to paragraph 1, eligible WTO Member States are allowed to
…authoriz[e] the use of the subject matter of a patent required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic, in accordance with the provisions of Article 31 of the Agreement, as clarified and waived in [the Ministerial Decision].
Interestingly, only developing country Member States are eligible to use Ministerial Decision, which is unlike Article 31 and 31bis which is available to all Member States. Paragraph 1 makes available a new waiver of an existing obligation contained in TRIPS Article 31(f), which states that exports under a compulsory licence must be restricted to the non-predominant part of the authorised amount.
The Ministerial Decision uses the phrase ‘subject matter of a patent’ as opposed to ‘patented subject matter’ as used in the Quad Proposal. The rephrasing of the Quad Proposal is consistent with the TRIPS Agreement, as it will obviate any question on whether the Ministerial Decision only covers patented vaccines, or those under consideration for a patent. Footnote 3, which was added to Paragraph 3(c) in the final document of the Ministerial Decision, permits the re-exportation of COVID-19 vaccines in exceptional circumstances, to another eligible Member State for humanitarian and non-profit purposes. Another significant change was the removal of Paragraph 3(a) which required countries seeking authorisation to list all patents involved in the process. Further, Paragraph 9 of the Ministerial Decision provides that such decision is without prejudice to existing flexibilities under the TRIPS Agreement, except with respect of paragraph 3(b) that sets out the new waiver.
Conclusion: The failure to agree
The original proposal tabled by India and South Africa gained considerable support from most Member States of the WTO and civil society organisations, but it did not have the support of the patent rights holding developed country Member States. The rights holding Member States were able to steer the negotiations tactically to ensure it did not produce the desired result of a complete waiver as proposed. The decision taken at MC12 demonstrates that the patent holding developed country Member States backed by the powerful lobby of pharmaceutical corporations still hold sway and can shape the outcome of key multilateral negotiations at the WTO. Although the urgency to save lives, a public good, was on the agenda, it was the need to protect private rights, i.e., pharmaceutical patents rights that won the day, leaving many Member States to feel disillusioned on the credibility of the multilateral forum to take decisive action in times of need. If the waiver proposal had been successful, it would have gone a long way to restore trust and credibility in the WTO. In this battle it was Goliath who prevailed, and not David. Even before the failure at the MC12 some countries have proposed the development of an international treaty on pandemics. The MC12 decision prompts one to look for solutions outside the multilateral order and reshape and reform the WTO as a matter of urgency.
Expert article 3296
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