Just The Beginning For Patent Waivers? WTO Issues Precedential Decision Sending Shock Waves Throughout the IP World

In March 2020, the world was upended and faced with unimaginable challenges. The COVID-19 pandemic posed threats that had not been experienced in the United States since the smallpox epidemic over 100 years ago. Nations across the globe were forced to act fast in their individual and collective efforts to combat the spread of the disease. Many organizations rose to the forefront of this effort, including the World Trade Organization (“WTO”).

The WTO deals with rules governing trade between nations with a goal of aiding and facilitating the exportation and importation of goods and services.¹ During the COVID-19 pandemic, one specific commodity was highly prioritized: the COVID-19 vaccine. Its rate of production and global accessibility became an issue of much concern to the WTO.

From June 12–17, 2022 in Geneva, Switzerland, the WTO held its twelfth Ministerial Conference (“MC12”) at which ministers from across the globe assessed the functionality of the global trading system.² Co-hosted by Kazakhstan and chaired by Mr. Timur Suleimenov, Deputy Chief of Staff of the Kazakh President, the MC12 conference garnered attention in the intellectual property (“IP”) world as a series of decisions related to the COVID-19 pandemic issued and became what is now known as the “Geneva Package.”³

On June 17, the WTO issued a Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) waiver that allows countries to utilize the core mRNA IP central to production and distribution of the COVID-19 vaccine without authorization from the patent holder. In its Ministerial Decision, the Organization states:

Notwithstanding the provision of patent rights under its domestic legislation, an eligible Member may limit the rights provided for under Article 28.1 of the TRIPS Agreement by authorizing the use of the subject matter of a patent 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 accordance with provisions of Article 31 of the Agreement, as clarified and waives in paragraphs 2 to 6 below.⁴

In effect, this decision virtually strips patent owners of their licensing rights for vaccine-related IP. In defense of the regulation, Director-General Ngozi Okonjo-Iweala said it was necessary to end the “morally unacceptable” inequity for accessing COVID-19 vaccines.⁵

Other advocates for the regulation have reasoned that “[w]e are all unsafe, but we are not equally unsafe.”⁶  According to a study conducted by the Economist Intelligence Unit, many low-income countries will not achieve the World Health Organization’s (“WHO”) goal of 70% vaccination by 2023.⁷ The WTO aims to remedy this “vaccine apartheid” through the TRIPS waiver to increase accessibility of COVID-19 vaccines worldwide.⁸

Conversely, others argue that the need for this waiver has passed. For example, since the fall of 2021, the supply of the vaccine has, and continues to, exceed demand.⁹ Additionally, others point to the more narrowly tailored waivers that have already been granted (until 2034) to those countries arguably in the greatest need of access.¹⁰ In view of these more targeted waivers, some question the need for the additional sweeping protections afforded by the MC12 decision.

While the Geneva Package has resulted in what some perceive as a significant setback to the rights of patent owners, the June 2022 decision may be just the beginning of additional restrictions on IP rights as related to the COVID-19 pandemic.

Patent owners should be aware that TRIPS waivers may extend beyond vaccines to other COVID-19 related methods and treatments. On October 19, 2022, a number of United States Senators from both sides of the aisle wrote Ambassador Katherine Tai, the United States Trade Representative, referencing Paragraph 8 of the MC12 document and seeking clarification on this matter.¹¹ Paragraph 8 states:

No later than six months from the date of this Decision, Members will decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics.¹²

Thus, the decision may potentially expand beyond its initial application, running the risk of injuring intellectual property rights around the globe.

As December 2022 approaches, it will be important for patent owners to closely track this fluid issue and continue to monitor implications.