- David Vance
Tripping over IP Waivers
Or is it tripping about IP Waivers? You might have heard that the US is now supporting the use of IP waivers concerning COVID-19 treatments (with vaccines being the main focus). This is in response to India and South African, who, on 2 October 2020, submitting a request to the WTO for a WAIVER FROM CERTAIN PROVISIONS OF THE TRIPS AGREEMENT FOR THE PREVENTION, CONTAINMENT AND TREATMENT OF COVID-19. While this waiver has failed to be passed, countries are continuing to argue for it, the US now included. TRIPS is the Agreement on Trade-Related Aspects of Intellectual Property Rights that was signed into law in 1994 as a part of the World Trade Organization (WTO). In essence, the IP Waiver would allow countries who are a party to TRIPS to avoid violating the TRIPS agreement if IP rights were violated by the manufacture and/or importation of COVID-19 vaccines.
There are quite a few problems with the IP Waiver movement, three of which are a failure to acknowledge how long it takes to negotiate waivers, a failure to identify IP related to COVID-19 vaccines, and a failure to acknowledge that manufacturing (know-how) is far more important than IP or patent rights. The first problem needs little elaboration. Negotiating waivers will take months to define and clarify what is encompassed by the waiver and then more months for countries to ratify the waiver. The second problem seems to suggest that the US backing of IP Waivers is more window-dressing than substantive. Why are we spending time on waiving rights to non-existent IP? This also begs the question of why waivers are needed. Countries sue countries for IP violations under TRIPS. Couldn't the US just say that no suits will be brought? The answer is yes they can. Regardless of how realistic that is, the first two failures pale in comparison to the third. The primary and most important issue is vaccine production. Vaccines such as Pfizer's or Moderna's are incredibly complex and require substantial, unpatented, undisclosed know-how along with modern facilities and very specific starting materials. Unlocking IP rights will have not suddenly give countries the ability to produce vaccines. There is no recipe book waiting to be opened. Martha Stewart cannot help here.
I think the recent open letter from Pfizer's CEO provides a very honest look at the real problem. For example, the letter points to the issue of vaccine starting materials as the primary limitation on vaccine production.
Currently, infrastructure is not the bottleneck for us manufacturing faster. The restriction is the scarcity of highly specialized raw materials needed to produce our vaccine. These 280 different materials or components are produced by many suppliers in 19 different countries.
Open Letter from Pfizer CEO So how does waiving IP rights help this? Well for the Pfizer vaccine and almost certainly the Moderna vaccine, a waiver will do nothing, except perhaps disrupt the current raw material supply chain. That can't possibly be helpful. In my opinion, the conversation should never have been focused on IP Waivers, but rather on manufacturing. A conversation that seems to garner little attention. As an aside, I would respectfully suggest that the doomsday responses to IP Waivers are a bit of an overreaction. Yes, there could be a major disruption of investment if IP Waivers were put in place. But, doesn't that feel like a bit of a stretch? One would expect the USTR (and the WTO as a whole) to negotiate an appropriately defined waiver to address the current pandemic without negatively affecting business investment, at least beyond 2021. Again, I think that instead of overreaction we could dismiss IP Waivers due to limited efficacy and focus on the critical importance of maintaining current vaccine production and also enhancing production as quickly as possible.