Welcome to the Roundtable, a forum for incisive commentary and analysis
on cases and developments in law and the legal system.
on cases and developments in law and the legal system.
By Kanishka Bhukya
Kanishka Bhukya is a 2nd year B.A./LL.B student at the National Law School of India University.
As the Covid-19 pandemic unfolded, a major concern that emerged was the negative impact of intellectual property barriers on the global supply of critical medical components, including vaccines and personal protective equipment. For example, early on in the pandemic, Gilead Sciences set a negative precedent by patenting antiviral medication Remdesivir, used to treat Covid-19.  As a result, various interest groups have lobbied governments to waive Gilead's Remdesivir patent in order to make it more affordable, but they have been unsuccessful.
Following a series of similar events, such as the Netherlands-Roche dispute over the lysis buffer solution, a group of developing and least-developed countries (LDCs) – led by India and South Africa – have come up with a landmark proposal to waive certain sections of the World Trade Organization’s (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement . The proposal sought to waive four categories of IP rights – Section 1 (Copyright), Section 4 (Industrial Design), Section 5 (Patent) and Section 7 (Undisclosed Information) of Part II of the TRIPS Agreement for at least three years.
This was designed to ensure quick and affordable access to diagnostics, vaccines, personal protective equipment and other medical devices for developing countries . However, this proposal has faced stiff resistance from a few developed countries and the European Union . Ultimately, a waiver of the TRIPS Agreement is the best way forward for ensuring equitable access to vaccines and other critical medical components to combat Covid-19. First, this article assesses the legality of such a waiver. Second, it will present the developed countries' arguments against the proposed waiver and lastly, explain why their proposal to use compulsory licensing as a pandemic response is not a feasible alternative.
Article IX.3 of the Marrakesh Agreement establishing the WTO (hereafter referred to as the WTO Agreement) provides for the waiver of obligations imposed on a member country by the WTO Agreement under “exceptional circumstances." Sub-clause (a) of the same article requires the waiver garner support of three-quarters of the members. Article IX.3 (b) states that the TRIPS council will have jurisdiction over a proposal for a waiver concerning the TRIPS Agreement. Moreover, Article IX.4 states that a decision taken by the Ministerial Conference granting a waiver must explicitly state the “exceptional circumstance” justifying their decision, the terms and conditions governing such a waiver, and the time period of the waiver.
The WTO has granted a collective waiver only twice. The first instance occurred during the Kimberley Process Certification Scheme, when a group of African diamond producing countries aimed to suppress trade in these so-called blood diamonds by requiring participants to ensure trade in rough diamonds occurs only when such shipment is accompanied by a Kimberley Process Certificate. The WTO facilitated a waiver from certain General Agreement on Tariffs and Trade (GATT) obligations concerning the measures they had adopted to prohibit the trade in “blood diamonds.”  This also occurred during the General Council meeting in 2003, when the WTO council decided to waive LDC’s and other developing countries which did not possess the manufacturing ability to produce medical drugs from Article 31(f) and 31(h) of the TRIPS Agreement .
Although the WTO Agreement does not provide a concrete definition of the term "exceptional circumstance," it appears to imply that the power of waiver intends to legalize those measures taken during a concrete emergency situation that would otherwise be in violation of the WTO law . The Covid-19 pandemic, which caused significant social and economic devastation, unquestionably qualifies as an "exceptional circumstance." As nations continue to face newer strains and waves of Covid-19, it has become increasingly important to find ways to increase the supply of vaccines and other medical components in developing and least-developed countries. With the current IP restrictions in place, it is nearly impossible to do so. As a result, there is a compelling legal case for the waiver of specific TRIPS provisions.
Developed countries argue that the request for a waiver is superfluous as the TRIPS Agreement encloses several flexibilities which can be used in the event of a public health exigency. One such important flexibility is “compulsory licensing.” A compulsory license “is a license issued by a government of a country to a third party to produce a patented medicine without the patentee’s permission.”  However, it would be incorrect to conclude that this flexibility would be adequate in dealing with the Covid-19 pandemic. Therefore, “compulsory licensing” is not a viable option, and instead, the WTO must waive Intellectual Property protection for Covid-19 related medical components.
Article 31(f) of the TRIPS Agreement says that the option of compulsory licensing must be predominantly used for the domestic market of the member issuing the license . This signifies that generic medicines produced under compulsory licensing cannot be exported. For that reason, compulsory licensing is not beneficial to lower- and middle-income countries with minimum or no manufacturing capabilities. However, the WTO did recognise this problem in August 2003, passing a resolution waiving the obligations imposed on its members by Article 31(f) and 31(h) of the TRIPS Agreement . This allowed members to export drugs that were manufactured under compulsory licensing to other countries. The TRIPS Agreement was later amended to include Article 31bis, which gave a permanent effect to the 2003 decision .
While it is widely believed that this amendment has solved the problems of middle and low-income countries, the process remains cumbersome. The case-by-case approach or the product-by-product approach is touted as “prohibitively complex.” For example, Article 31bis provides that the exporting country has to ensure that the medicines are easily identifiable, the medicines are exported to that country only, and the medicines only produce the amount required by the importing country. The importing country also needs to notify the TRIPS Council. For example, when Rwanda decided to import the patented HIV/AIDS drug TriAvir from Canada, many issues emerged. The reform of national laws and the cumbersome process have delayed the delivery of drugs by many years. Furthermore, it was discovered that the generic manufacturer had very little incentives to pursue compulsory licensing because it is not cost effective to produce for merely one importing country, and Canada's imposition of a maximum period of two years was insufficient to recover the investment. 
Another problem with compulsory licensing is the constant chest-thumping by developed nations towards countries issuing a compulsory license. For example, when India issued its first compulsory license to allow for a less expensive version of a cancer drug, there was a global outcry from multinational pharmaceutical companies and the US government. Even though the TRIPS Agreement does not say that this provision can be used only during a public health emergency, the US government said otherwise and applied relentless pressure on India. Despite the UN’s call for governments to refrain from explicit or implicit threats and strategies that undermine the right to use TRIPS flexibilities, some developed nations undermine their use through free trade agreements and bilateral pressure .
Past precedents and growing evidence indicate that IP has become a barrier to equitable access to Covid-19 medical components. While the European Union aims to stockpile vaccines far in excess of its population, LDCs in Africa and Asia struggle to obtain even the bare necessities. Although it cannot be said that a TRIPS waiver alone will ramp up the supply of Covid-19 medical components around the world, it could be a significant step toward achieving the goal of equitable vaccine distribution. We have seen how unnecessarily complex the process of compulsory licensing can be. One method to scale up the production of vaccines is by increasing the institutional capacity in middle and lower-income countries and removing the systemic bottlenecks along with the TRIPS waiver.
 Namboodiri, Sreenath. “Opinion: Trips Waiver Proposal and Challenges Ahead.” The Week, May 31, 2021. https://www.theweek.in/news/biz-tech/2021/05/31/opinion-trips-waiver-proposal-and-challenges-ahead.html.
 PTI. “TRIPS waiver for COVID-19: WTO chief urges proponents to submit revised proposal soon to start talks” The Economic Times. May 7, 2021. https://economictimes.indiatimes.com/news/economy/foreign-trade/trips-waiver-for-covid-19-wto-chief-urges-proponents-to-submit-revised-proposal-soon-to-start-talks/articleshow/82456865.cms?from=mdr.
 Thiru. “WTO TRIPS Council (October 2020): South Africa issues clarion call urging support for TRIPS waiver proposal.” Knowledge Ecology International. October 16, 2020. https://www.keionline.org/34235.
 Feichtner, Isabel. “The Waiver Power of the WTO: Opening the WTO for Political Deliberation on the Reconciliation of Public Interests.” Jean Monnet Working Paper 11/08. Crossref, https://jeanmonnetprogram.org/wp-content/uploads/2014/12/081101.pdf.
 Urias, Eduardo, and Shyama V. Ramani. “Access to Medicines after TRIPS: Is Compulsory Licensing an Effective Mechanism to Lower Drug Prices? A Review of the Existing Evidence.” Journal of International Business Policy, no. 4, Springer Science and Business Media LLC, Sept. 2020, pp. 367–84. Crossref, doi:10.1057/s42214-020-00068-4.
 World trade organization. “Compulsory licensing of pharmaceuticals and TRIPS.” World Trade Organization. https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm.
 Gour, Praharsh. “Wishful Thinking? Analyzing India and South Africa’s Joint Statement to Waive Key Provisions of TRIPS – Part I.” SpicyIP. October 20, 2021. https://spicyip.com/2020/10/wishful-thinking-analyzing-india-and-south-africas-joint-statement-to-waive-key-provisions-of-trips.html.
 Hestermeyer, Holger. “Canadian-made Drugs for Rwanda: The First Application of the WTO Waiver on Patents and Medicines.” American Society of International Law. November 28, 2011.
The opinions and views expressed in this publication are the opinions of the designated authors and do not reflect the opinions or views of the Penn Undergraduate Law Journal, our staff, or our clients.
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