June 13, 2021

Volume XI, Number 164

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When Compulsory Licenses Apparently Just Won’t Do: The US Backs Waiver of Rights to IP Relating to COVID-19

On Tuesday, May 5, 2021, the U.S. Trade Representative Katherine Tai released an unprecedented statement supporting a “Covid-19 TRIPS Waiver.” Specifically, Ambassador Tai stated “[t]he Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines. We will actively participate in text-based negotiations at the World Trade Organization (WTO) needed to make that happen.”

The stock market was unimpressed.

To quote the Talking Heads: “And you may ask yourself, well, how did I get here?’

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) set the minimum standards for intellectual property protection in the world today. Relevant here, TRIPS permits WTO Member states to engage in compulsory licensing as part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting intellectual property incentives.

The term “compulsory licensing” does not appear in TRIPS. Rather, Article 31 of TRIPS permits a Member State to “allow[] for other use of the subject matter of a patent without the authorization of the right holder” as long as “the following provisions [are] respected.”

Two provisions are particularly relevant here.

Article 31(b) generally requires that “such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder.” That requirement, however, “may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.”

Second, Article 31(h) requires that, regardless, “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization.”

TRIPS does not, however, purport to establish a “one size fits all” approach to intellectual property, a fact made clear by the 2001 Doha Declaration. In that Declaration, the WTO stated:

  1. “Each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.”
  2. “Each member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.”

Nonetheless, in October 2020, South Africa and India pushed the WTO for more, demanding that the Council essentially impose a ban on COVID-19 patents. Despite widespread support, that request has stalled. Likely not for much longer. The issue of a waiver—despite the compulsory license provisions of TRIPS—will certainly be the center of discussion at the June 8-9 meeting of the TRIPS Council. With the US backing and support of an India/South Africa-style “waiver” of TRIPS provisions relating to COVID-19, it may just pass.

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 126
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About this Author

Greg Chopskie Intellectual Property Attorney Squire Patton Boggs San Francisco, CA
Partner

Greg Chopskie has extensive experience as in-house counsel to several multibillion-dollar publicly traded life sciences companies. He offers an insider’s knowledge to the development of effective legal strategies and tactics in both domestic and international IP disputes, with a unique capability in and familiarity with Hatch-Waxman litigation. His skillset includes IP portfolio design, due diligence, international commercial transactions, and international competition matters. He is a strategic counselor in all phases of international disputes relating to complex IP...

415-954-0310
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