ANALYSIS OF THE TRIPS COUNCIL MEETING JULY 30,2020

The coronavirus pandemic is slowly, but surely casting the World Trade Organization as a significant platform that could witness systematic efforts at the multilateral level to ensure better access to health products. This could be in the form of more formal deliberations amongst members to find ways to neutralise barriers to intellectual property, and not just patents, but other types of constraints that have affected access to diagnostics and health technologies. This pandemic has already brought into sharp focus, the inability to quickly provide essential diagnostics and medical products as a result of inadequate local manufacturing capacities and the dependence on global value chains.  

A recent meeting of The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) at WTO (July 30,2020), saw wide-ranging discussions on the kinds of barriers faced by countries while responding to the pandemic. It also examined questions on the existing flexibilities in international trade and in domestic laws to improve the access to health products. Specifically, a significant proposal tabled by South Africa was the basis of these discussions.

This story tries to examine whether discussions at the WTO including at the TRIPS Council, can help shape how countries might address the big, urgent questions on the access to health products in the context of the accelerating pandemic of COVID-19. 

Experts believe that the WTO is the only organisation that has the framework to ensure that the rights of all stakeholders are protected, even as “it recognises the legitimacy of government actions to achieve the required balance between private and public goods.” (See below: Q&A with South African delegate, Mustaqeem De Gama on a significant proposal discussed at the meeting, that essentially broadens the scope in understanding the various barriers to effectively addressing the pandemic.)

ISSUES DISCUSSED AT THE TRIPS COUNCIL MEETING

It was under the aegis of this recent meeting that countries discussed the important role the WTO – and the TRIPS Council in particular – play to combat the COVID-19 pandemic.

At the meeting, WTO members discussed the “merit of the multilateral intellectual property (IP) system in incentivizing innovation in medical technologies and research and in enhancing the response of the global community to the COVID-19”, according to an official source.

It seems that countries were somewhat divided on the successes and limitations of the prevailing IP system in addressing the pandemic.

Developing and least-developed country members highlighted the challenge COVID-19 had represented in terms of access to medicines, vaccines and associated technologies. They called for TRIPS to be applied with a focus on the rights to protect public health and promote access to medicines for all. These delegations said that the TRIPS Council must ensure that vaccines and new medical technologies are made accessible and available regardless the level of economic development, and that intellectual property rights (IPRs) are not a barrier, a source said.

These countries believe that the COVID-19 crisis allows for the utilization of TRIPS flexibilities contained in the Doha declaration on TRIPS and Public Health and calls for the removal of complexities in the TRIPS Agreement to improve effectiveness and ensure benefits to members without pharma manufacturing capacity.

According to a source at the TRIPS Council meeting, “Several developing countries joined South Africa in explaining the legal, technical and institutional challenges they face in using TRIPS flexibilities and the lack of domestic manufacturing capacity that makes them dependent on imports to meet their medical needs, particularly in time of crises.” It was pointed out that key goods including protective equipment such as masks, face shields, and hand sanitizers, remain in critical shortage in many countries.

Developed country members are reported to have said that the IP system had demonstrated its value in boosting science and international cooperation against the pandemic, and also in promoting and incentivizing medical technologies innovation and research. Developed countries are of the view that the production of high-quality COVID-19 medicines and treatments has been possible based on a system that promotes collaboration and voluntary knowledge-sharing and licensing, while ensuring intellectual property rights (IPRs) are respected, a source present at the meeting said.

It is understood that developed countries urged other members “to exercise caution and careful deliberation on issues related to compulsory licensing, as they have significant implications that could negatively affect investment, research and development of future treatments and restrict investment into new markets, including investment in new manufacturing facilities,” a source told Geneva Health Files.  

One of the members  pointed out that IP was not a barrier to access COVID-19 technologies. South Africa cited the example of Gilead that has entered into 9 licensing agreements with generic manufacturers from 3 countries for the supply of Remdesivir to 127 countries. “These limited, non-transparent exclusive licenses seem to be an attempt to contain competition by creating an oligopoly. Generic manufacturers globally that can contribute to expanding global supply have been excluded. The lack of transparency, and accountability in the present dire times is extremely worrying and dangerous. It is an indicator of the IP and access challenges ahead of us, that the WTO Members need to address effectively and swiftly,” South Africa said.

While members agreed on the relevance of the TRIPS Council as a forum at the multilateral level, for exchanging information, and coordinating strategies around the pandemic, members agreed on the relevance of the TRIPS Council as a forum at the multilateral there was no agreement in including the issue of the COVID-19 response as a standing item in the agenda of future TRIPS Council meetings. Some members expressed their preference to include it on an “ad-hoc” basis in the light of further developments, sources told Geneva Health Files. (Members also discussed IP-measures implemented as a result of the pandemic. See an earlier post on the same here.)

Other issues considered at the meeting included a new proposal by the LDC Group for a new template for annual reporting on the technology transfer to LDCs under Article 66.2 of the TRIPS Agreement. The article states: “Developed country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country Members in order to enable them to create a sound and viable technological base.”

In addition, South Africa called for efforts “to reinvigorate the 1998 Work Programme on Electronic Commerce” in line with the General Council Decision of December 2019. It suggested that this should be a standing item on the agenda of the TRIPS Council.

THE SOUTH AFRICAN PROPOSAL – IP & PUBLIC INTEREST

A paper titled “Intellectual Property And Public Interest: Beyond Access To Medicines And Medical Technologies Towards A More Holistic Approach To Trips Flexibilities”, tabled by South Africa was discussed at the meeting.

In its proposal, South Africa has essentially tried to broaden the scope in understanding the barriers in effectively addressing the pandemic.

“The use of TRIPS flexibilities to address a public health concern is usually seen as a matter concerning patents. However, the COVID-19 pandemic requires a more integrated approach to TRIPS flexibilities that include other various types of intellectual property (IP) rights including copyrights, industrial designs and trade secrets. The use of TRIPS flexibilities in other areas of intellectual property, beyond patents, is less understood at the national level. In fact, in other fields of IP, national IP laws may not even provide for sufficient flexibilities to address issues of access. A variety of IP rights are relevant in the fight against COVID-19.”: South Africa’s proposal at TRIPS Council, WTO

The proposal notes that the pandemic “created the need to produce essential equipment and medical supplies, there is a growing need to be able to manufacture essential medical devices such as masks, ventilators and other personal protective equipment.”

Given the difficulties around finding a vaccine quickly to fight the pandemic, the proposal emphasizes the need for other “non-medical” approaches to fight the pandemic. “In the absence of prophylaxis through a vaccine and more effective treatments, non-medical measures have been an important priority in dealing with the devastating impacts of COVID-19,”

“Other goods and services that are needed to tackle the epidemic include protective equipment such as masks, face shields, and hand sanitizers. Such equipment and material remain in critical shortage in many countries around the world. Many WTO Members lack domestic manufacturing capacity and would be dependent on imports to meet their medical needs,” the proposal noted. (Read more about the state of play on the trade in medical products in a recent post)

In its proposal, South Africa also highlights the limitation of Article 31bis – a provision in the TRIPS Agreement (as a result of an amendment). Although the provision enables a country to use a compulsory license, in order to export – one of the flexibilities in the TRIPS Agreement – South Africa notes that “the implementation of the Article 31bis mechanism at a national level is very limited and may not achieve its intended objectives.” In addition, many developing country Members may also face legal, technical and institutional challenges in using TRIPS flexibilities, especially those countries that have never utilized flexibilities such as compulsory licenses, the proposal said. (This mechanism, in principle, sought to make it easier for poorer countries unable to manufacture medicines, to import cheaper generics made under compulsory licensing. It was a result of a decision [30 August 2003] that later translated into an amendment of the TRIPS Agreement as Article 31bis. The mechanism waived the condition in Article 31(f) that a compulsory license should be predominantly for the supply of the domestic market.)

In the proposal, South Africa cites some examples from the current crises that show how trade barriers are affecting the access to health products crucial to fight the pandemic.

• Implications for IP on Big Data outside of the health system:

“Smartphones, mobile data, artificial intelligence, databases and algorithms have been used in the COVID-19 pandemic to leverage the detection and control and control of the virus. Different types of IP rights are relevant to protect AI algorithms, some may be protected by copyright and trade secrets while other technology is protected by patents while database rights and trade secrets may also be relevant.”

The proposal cautions, “While these approaches help with efforts to contain the spread of the virus, they can raise issues about the right to privacy and personal freedoms. National security concerns may also arise in the context of Article 73 of the TRIPS Agreement.”

• 3D printing technology

South Africa cited an example of an IP dispute on ventilator valves in an Italian hospital during the pandemic. An existing valve was scanned and 3D printed replacement valves saved lives. The original manufacturer reportedly refused to share blueprints of the device. Despite demand for 3D printed valves, legal and medical constraints prevent such distribution. The proposal also discusses a warning from a law firm highlighting “complex intellectual property issues” surrounding such practices.

The proposal concludes “This case clearly demonstrates the interface between IP and new technologies such as 3D printing and may require a better understand of how a balance may be achieved between rights holders and third parties. More collaborative approaches have been achieved through various pooling mechanisms for access to medicines, this is also true for more generic IP pledges that covers a broad range of equipment, software, network and device applications useful in healthcare, containment, tracking, diagnostics, emergency response and social distancing. Such approaches nonetheless are limited and may require action on the side of national authorities to ensure access to such technologies where pledges or voluntary licenses cannot be secured on commercially reasonable terms.”

• Trade Secrets

Discussing trade secrets as another example in the context of the pandemic, South Africa cites experts and suggests that during the current public health crises calls such protections might be a critical barriers to accessing technologies.

“Trade secrets encompass vast quantities of information needed to discover, test, create, and manufacture diagnostics, treatments, and vaccines. Potential trade secrets include manufacturing processes, test data, medical formulas, and more. For vaccines and other biologic medicines, cell lines, genomic information, and other biological material can also be held as trade secrets. Data about the effectiveness of medicines and vaccines are trade secrets. Even so-called negative information — information about what does not work — can be a trade secret.”

The proposal points out that “Article 39.2 of TRIPS Agreement requires Members to protect undisclosed information which is secret, has commercial value and has been subject to reasonable steps to be kept secret. Both voluntary and compulsory licenses, though common in other forms of IP are unusual in trade secrets.”

Finally, South Africa had suggested a number of questions to guide the discussions at the meeting including:

 1. To what extent are TRIPS flexibilities embedded in areas outside patent protection well understood? If so, how are Members implementing such understandings in their national and regional laws?

2. What are the likely difficulties that Members may face in dealing with a changing technology landscape where embedded IP rights may affect the dichotomy between IP rights as private rights and the public interest dimensions recognised in the TRIPS Agreement?

3. What are the benefits and limitations of initiatives such as voluntary licenses and pledges to access much needed technology to deal with the COVID-19 pandemic?

4. Are there circumstances where trade secrets can be shared more broadly? If so, what are those circumstances? Would national or international health pandemics fall within this category?

ON WHO’S COVID-19 TECHNOLOGY ACCESS POOL

While highlighting WHO’s recent initiative – the COVID-19 Technology Access Pool – a platform which seeks to enable voluntary sharing of information on health products, South Africa is of the view that this will be insufficient to address the needs of the current pandemic.

In a statement at the meeting, South Africa said, “Several voluntary initiatives have emerged since the outbreak of COVID-19 including pledges and voluntary licenses. Some of these are commendable, but these are ad hoc initiatives, simply inadequate to systematically and comprehensively address IP barriers. IP holders of essential technologies may also decide not to participate in such initiatives.”

WHO has called for intellectual property holders to voluntarily license such rights on a “non-exclusive and global basis to the UNITAID-established and supported Medicines Patent Pool and/or through other public health research and development mechanisms, consortia or initiatives that facilitate global and transparent access; and/or voluntary non-enforcement of intellectual property rights, as appropriate, during the COVID-19 pandemic, to facilitate the widescale production, distribution, sale and use of such health technologies throughout the world”.

Soon after it was launched after the World Health Assembly, 40 countries expressed interest. More countries are now expressing interest – including an encouraging number of pharma producing countries, WHO said in an email response to queries.

In its proposal, South Africa notes that “to date no company has committed to doing so. Instead limited, exclusive and often non-transparent voluntary licensing is the preferred approach of pharmaceutical companies, which will be insufficient to address the needs of the current COVID-19 pandemic.”

In response to a question by Geneva Health Files, on the status of C-TAP, a WHO spokesperson said that WHO has been working with key stakeholders to design an operational plan. These include industry and intellectual property experts. This plan is expected to be launched soon.

“Important to note that C-TAP is not a quick fix. It’s a mid-term long-term approach to making a significant improvement in the way we do technology transfer. It’s complementary to other COVID initiatives, eg ACT-Accelerator. And builds on Existing initiatives like the Medicines Patent Pool,” a WHO spokesperson told Geneva Health Files.

WHAT NEXT:

Sources working closely with developing countries in Geneva, on trade matters, told Geneva Health Files that South Africa is “testing waters” to see the response to its proposal at WTO. The discussion generated at the TRIPS Council meeting as a result of the proposal can serve as the basis of further discussion on overall IP barriers in the context of the pandemic, one source familiar with the developments said. When countries share their experiences and perspectives on the barriers they face, it can be put together as evidence to inform future discussions at WTO, possibly for a more concrete proposal, the source added.  The next meeting of the TRIPS Council is scheduled for 15-16 October 2020.

These efforts at WTO, such as those spear-headed by South Africa are in line with the priorities at WHO.

Recall from the COVID-19 Response Resolution, adopted earlier in the year, by the World Health Assembly:

OP9.8 Rapidly, and noting OP2 of RES/74/274 and in consultation with Member States, and with inputs from relevant international organizations civil society, and the private sector, as and regional economic integration organizations as appropriate, identify and provide options that respect the provisions of relevant international treaties, including the provisions of the TRIPS agreement and the flexibilities as confirmed by the Doha Declaration on the TRIPS Agreement and Public Health to be used in scaling up development,  manufacturing and distribution capacities needed for transparent equitable and timely access to quality, safe, affordable and efficacious diagnostics, therapeutics, medicines, and vaccines for the COVID-19 response taking into account existing mechanisms, tools, and initiatives, such as the Access to COVID-19 Tools (ACT) accelerator, and relevant pledging appeals, such as “The Coronavirus Global Response” pledging campaign, for the consideration of the Governing Bodies

Geneva Health Files spoke to Mustaqeem De Gama, Counsellor, South African Permanent Mission, to understand the context and objectives of the proposal considered at the TRIPS Council.

Q&A: Mustaqeem De Gama, Counsellor, South African Permanent Mission

1. What according to you, is the most promising outcome of the recent TRIPS Council meeting?

The discussion at the meeting last week has certainly created a ripple. I believe that this TRIPS Council was different since it was the first time that we discussed in any detail a collective interpretation of flexibilities that goes beyond mere access to medicine and medical technology.  Even these flexibilities are not well implemented in developing countries for a variety of reasons. In short, flexibilities beyond patent based IPRs have not really been discussed much, in the areas of industrial designs, trade secrets and exceptions and limitations with regard copyright. Placing the matter on the table was an important first step, a recognition that other IPRs are important not only in our fight against COVID-19 but also in the context of development and public interest as we are starting to confront the post-COVID economic realities. We all recognise that IPRs are important and must be protected, however these rights are not absolute and are subject to limitation, Article 7 and 8 of the TRIPS agreement reminds us of the balance inherent in IP as private rights that serve an overarching public purpose. Public interest in the fair and honest operation of the system requires that governments take the necessary steps to ensure that they align the recognition and enforcement of IPRs with the protection of public health and socio-economic rights and technological interests.

Issues discussed in TRIPS Council are reflective of broader issues within the WTO that cut across many different agreements. Part of the WTO reform debate, especially for developing countries has been how policy space can be used for countries to industrialize and develop in order to achieve the SDG 2030 goals. 

We believe that there should be a systematic framework to enable issues such as localisation, for example, that have been brought to the fore as a result of the pandemic. It is not that only developed countries that will seek to reduce their reliance on suppliers overseas, but all developing countries must seek to reassess their domestic production capacities. The current crises have shown over-reliance on foreign suppliers are fraught with logistical and supply chain difficulties.

Global value chains have not benefited developing countries the same way as developed countries. The former is on the lowest rung of value chains, often only involved in the assembly component of such production processes. COVID-19 presents us with an opportunity to reassess how to address the challenges we face in a more resilient and inclusive way.

2. How was the response from other member states to South Africa’s proposal on examining flexibilities, beyond just patents, to address the pandemic?

The reaction was overwhelmingly positive, on both sides. Most developing countries echoed much of what is in the proposal and our statement. The idea was really to open up a discussion on those IPRs that are not often spoken about but which could have a significant influence on how we understand the role and function of IPRs in society at large. We observed over the last few years that most developed economies enhanced their trade secrecy laws, much of the movement in recent years has been in the direction of invoking trade secrets as part of a strategy that may not rely so much on patent protection. In this respect, even developed countries agreed that there must be some sort of balance but emphasised the importance of protection and enforcement of IPRs. Whereas our submission does not discount the importance of the recognition and enforcement of IPRs, we do ask whether an appropriate balance has been struck in circumstances where IPRs may become barriers to matters critical to public interest and wellbeing.

While the protection and enforcement of IP rights are important, they are not ends in themselves but means to different ends. There is a need to balance therights of holders with broader public interest imperatives. Access to and the diffusion of technology is essential to foster development.

3. Why do you think, that the WTO may be a more pertinent forum, as opposed to WHO, to push through some of these proposals?

By its very design the WHO is not an organisation that can easily enforce legal rights related to IPRs, this is not the function of the WHO. At best it may propose actions and protocols and work with stakeholders to achieve voluntary mechanisms that are solely at the discretion of participants. In a perfect world, everything is efficient and participants in a system are enlightened so as to ensure optimal outcome for all users. However, we do not live in a perfect world! Since IPRs are based on monopoly rights given to inventors and other right holders, the necessary disclosure is required and the guarantee of compensation is such that it reasonably compensate rights holders for their labour and effort. At every stage of this bargain it is understood that mutual benefit exists only in so far as private rights are not abused or do not become obstacles to legitimate public interest imperatives. We know what happened with HIV/AIDS and what was required bring better alignment between these two dimensions. The WTO is the only organisation that has the framework to ensure that the rights of all stakeholders are protected, it also recognises the legitimacy of government actions to achieve the required balance between IPRs and the public interest.

4. What are South Africa’s plans on taking this proposal forward?

Going forward under the rubric of IP and the Public interest, we intend to broaden the discussion by going into all instances where flexibilities exist and how they have been dealt with through several cases or within the domestic law practices of WTO members. Our interest is to ensure that especially developing country members are aware of these flexibilities and are in a position through IP reform strengthen and incorporate such explicit flexibilities where they do not already exist.

We wish to deepen discussions on several issues in the TRIPS Council and the work on e-commerce. As our proposal on IP and e-commerce illustrates, the is further scope to discuss the implication of IPRs for digital technologies not only in the context of the pandemic but well beyond it. 

While there may not be appetite within the WTO yet towards more open discussions on certain issues, politically it appears that many countries may be interested in such a dialogue on these issues. Any discussion in this context must preserve the multilateral consensus, respect ministerial mandates while avoiding unilateral actions.  

This article reflects a correction – WTO “members” and not “member states”. Since, some members are not sovereign states. Pointed out by a helpful reader.

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