The True Nature of Danger Behind IP Waiver Proposal

Occasioned by the COVID-19 pandemic, the World Trade Organization (WTO) has been considering a proposal by South Africa and Brazil to empower member states to impose a waiver of intellectual property (IP) rights “related” to vaccines (and likely antiviral therapeutics, diagnostics, and perhaps preventatives). The uncertainty of the scope of the waiver is a consequence of the proposed language, which remains undefined as the agreement is negotiated by WTO member governments, principally the US, EU, China, and South Africa/Brazil.

The details of COVID vaccine production have been set out in various news sources,¹ but these are not disclosed in the detail necessary for commercial production. Most of the “know-how” necessary to implement actual vaccine production involves trade secrets, many of which are not limited to COVID vaccines (for example, producing the lipid nanoparticles in which mRNA vaccines are encapsulated). It is unlikely that most of the countries in favor of the waiver (except India and South Africa) have the technological infrastructure for producing the vaccine. Thus, in the short term, the waiver can be expected to do little to solve the actual problem of vaccinating the world.

Recently, the Biotechnology Innovation Organization (BIO) provided a link to the supposed compromise agreement reached to permit WTO member states to waive patent protection for “subject matter 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.” The proposed waiver sounds patent-centric, but while the waiver states that a member state can permit “use of patented subject matter 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 a footnote the term “patented subject matter” is substantially broadened to include “ingredients and processes necessary for the manufacture of the COVID-19 vaccine.” The rights the waiver gives a member state are expressly not limited to compulsory licenses of patents in the member’s jurisdiction, but include “executive orders, emergency decrees, and judicial or administrative orders” as well as undefined “other acts.” These acts or decrees are themselves not limited to internal use in a member state, but also can include “any proportion of the authorized use to be exported to eligible members and to supply international or regional joint initiatives that aim to ensure the equitable access of eligible members to the COVID-19 vaccine covered by the authorization” (emphasis added; wherein the italicized portion of the proposal is not defined).

Even as patents involved in COVID vaccine preparation are granted, the disclosure needed to reproduce these vaccines is protected by trade secrets. Under the terms of the proposed waiver, the question will be whether the US will compel disclosure of trade secrets owned by US companies or that have disclosed them in confidence to the extent such secrets are part of regulatory filings. The administration’s public position raises the likelihood of an infringement on private property unprecedented in the US.

The efforts being applied globally to develop vaccines, treatments, and better tests and technology in response to COVID have been impressive. IP protection has played an important role in these efforts. Past experience and recent developments suggest that protecting IP for vaccines, therapies, and technologies to fight COVID has had and could continue to have a positive impact and advance the cause of eradicating, or at least treating and preventing, this disease. It would be foolish to ignore these contributions by reducing their effectiveness with the proposed waiver, particularly when the precise scope (with regard to trade secret aspects at least) is either undefined or effectively unlimited. The pandemic has produced a great deal of anxiety about what happens “the next time” there is a pandemic. This waiver raises the very real possibility that we will be less likely to be able to face such a future challenge because those with the capacity, incentive, and economic wherewithal to do so will have left the field to pursue other opportunities.

After this article was written and placed into production, the World Trade Organization approved a modified version of a COVID-19 vaccine IP waiver.

Kevin E. Noonan, PhD, Partner with IP law firm MBHB and the co-chair of its biotechnology and pharmaceuticals practice group

Reference

1. See, e.g., Neuberg et al., “Exploring the Supply Chain of the Pfizer/BioNTech and Moderna COVID-19 Vaccines”; Weiss et al., “A COVID-19 Vaccine Life Cycle: From DNA to Doses,” USA Today, Feb. 7, 2021; King, “Why Manufacturing Covid Vaccine to at Scale Is Hard,” Chemistry World, March 23, 2021; Cott et al., “How Pfizer Makes Its Covid-19 Vaccine,” New York Times, April 28, 2021.