Arth Nagpal and Harsh Srivastava

Introduction

On 2^nd October, India and South Africa had submitted a proposal to the TRIPS Council at the WTO in relation to the ‘prevention, containment and treatment’ of COVID-19. It seeks a waiver from the implementation and application of Sections 1 (copyright), 4 (industrial design), 5 (patent) and 7 (undisclosed information) of Part II of the TRIPS Agreement, and their enforcement under Part III from the WTO. If passed, this would relieve all WTO Members of their obligation to grant and enforce the above-mentioned IPR protections for drugs, vaccines, diagnostics and other technologies relating to COVID-19 (‘COVID-related products’) till such a time when “widespread vaccination is in place globally, and the majority of the world’s population has developed immunity”.

While this request has been vehemently opposed by some developed countries (including US, Switzerland and UK) and developing countries (including Brazil), it has garnered the support of a number of other developing countries (including Argentina, Indonesia and Pakistan) and Least developed countries (‘LDCs’) (including Bangladesh, Nepal and Mozambique). Moreover, a number of other countries like China, Chad and Turkey, have expressed a general need for further discussion, even though they have welcomed and supported the proposal (see here and here). 400+ civil societies across the globe have also shown their support for the proposal. A detailed discussion on the proposal can be found here, here and here.

The proposal is not without merit as such a waiver would allow access to affordable medical products, scale-up research and manufacturing and facilitate the supply of COVID-related products, especially to countries with little or no manufacturing capacity, to tackle COVID-19. While we agree with the need for increased access, especially for the developing countries and LDCs, the waiver in its current form is not immune to vulnerabilities. Through this article, we seek to highlight two potential issues that could impact its effectiveness: first, the feasibility of reverse-engineering products without the proprietary information of their creator and secondly, the potential diversion of COVID-related products for non-COVID purposes.

Feasibility of reverse-engineering products without proprietary information of their creator

One of the primary goals sought to be achieved by the waiver is permitting other companies to copy the design, work, or process of the right holder in order to ensure “timely access” to essential medical products. It seeks to do so by allowing other manufacturers to replicate those products without any liability for infringement. However, the companies copying the original product must ensure that the copied product is of similar quality and standard as the original one. For instance, in the pharmaceutical sector, a critical goal of the generic drug companies is to achieve bioequivalence with the original drug. Some of the hurdles that the generic companies would need to overcome to achieve this goal would be decoding the quantitative formula of the original drug, the solid-state characterization of the active pharmaceutical ingredient, and the identification of the manufacturing process (see here and here).

Admittedly, the inventor is obligated to disclose the invention in a clear and complete manner in their patent application (Art. 29(1) of the TRIPS Agreement), however, this disclosure does not necessarily include proprietary data and trade-secrets. While Art. 39(3) of the TRIPS Agreement allows the Member States to disclose “undisclosed test data” or other data relating to the product in cases where it is necessary to protect the public, the same is only applicable to the extent that such data is available with the authorities. However, this data is generally not sufficient to reverse-engineer the product in a short-time period. While there have been instances where vital medical devices were reverse-engineered and 3-D printed in a matter of a few days, the average time for reverse-engineering drugs and other medical equipment along with obtaining requisite regulatory approvals is much longer, taking up to 3 or more years in certain cases.

Although countries can refuse the registration of patents under the proposed waiver, it does not allow the states to force the creator of the original drug to divulge their proprietary information. Generally, medical formulas and manufacturing processes fall under the ambit of such proprietary information. In fact, in relation to drugs and vaccines, it covers genomic information, cell lines and even information about what does not work. Such proprietary information is critical for the generic drug companies to be able to reverse-engineer the drugs. In a time-sensitive situation like the current one, with lakhs of new cases every day, the run-up even to a successful reverse engineering would only come at a time when thousands of lives have already been lost (see here). Thus, even if the waiver proposal is accepted, it would face severe impediments in attaining the objective it seeks to achieve.

Potential diversion of COVID-related products for non-Covid purposes

As mentioned previously, the IPR suspension under the waiver is restricted to COVID-related products for the “prevention, containment or treatment”of COVID-19. Although it is thus limited in its scope and duration, it is pertinent to note that the waiver does not define these terms or the extent of the products’ efficacy required in connection with COVID-19. This would make the ascertainment of products which actually fall under the purview of the waiver imprecise.

The lack of clarity is further compounded by the fact that comorbidities have been known to complicate COVID cases, at times even resulting in the death of the patient. The waiver does not clarify whether implementation and enforcement of IPR on products used for the treatment of the comorbidities is also sought to be waived. Further, the drugs or medical apparatus forming the subject-matter of the waiver could have other non-COVID uses as well and products purportedly manufactured under the waiver for COVID-related use could be diverted for such other uses. For instance, though medical apparatus like ventilators and respirators and drugs like hydroxychloroquine have been critical in treatment of COVID-19, they are also vital for treatment of other conditions. In absence of any anti-diversion measures in the waiver, the manufacturers could divert these products to uses other than those mentioned in the waiver and it might be difficult for the patentees to enforce their IP rights against such unlicensed use.

Moreover, the repercussions of such a waiver in a post-COVID economy ought to be given more thought. The proposed waiver seeks to suspend the obligations of Member States to “implement or apply” the sections on copyright, patents, industrial designs and undisclosed proprietary information. This would inevitably waive the right-conferring provisions in the TRIPS Agreement as well, thereby empowering the Member States to refuse granting IP protections. This, in turn, could potentially spell trouble once the waiver is lifted. For instance, even if the waiver of patent rights is for a limited duration, it will inevitably preclude companies from asserting these rights after the lapse of the stipulated period, since the patentable subject-matter would already be prior-art.

Conclusion

Although the proposal seems to meet the moment, the issues emanating from it need to be addressed before its implementation. The non-feasibility of reverse engineering sans proprietary information, and the potential diversion of COVID-related products for non-COVID purposes raise significant challenges to the effectiveness of the waiver sought.

Instead of waiving the IPR on all COVID-related products, suitable solutions can be categorized into concessions ranging from a complete waiver of rights on specific COVID-related products to flexible payment mechanisms. This can be based on the urgency and extent of their relation with the prevention, containment and treatment of COVID-19 with a provision for modification, based on new discoveries/studies. Indicatively, a basic list consisting of essential COVID-related products can be made for quick implementation, with Member States having the authority to modify this list in consultation with the WHO and their respective drug regulators. This would address the urgent individual needs of Member States during the pandemic without causing undue prejudice to the right holders. Moreover, measures such as labelling, packaging and tracking can be adopted in the waiver itself to ensure clear identification of the purpose for which the product has been manufactured and prevent its diversion.

For COVID-related products which require a complete waiver of IPR, protections must be provided to potential infringers from liability. However, such protection should only prevent the right holders from enforcing their rights during the pendency of the pandemic and should not impact the existence of the right itself. Once the pandemic has been called off by the WHO, given the product will be in the public domain, and thus would not remain exclusive, a mechanism similar to the mailbox facility (Art. 70.4 of the TRIPS Agreement) can be adopted. This would require the infringers to pay an equitable remuneration to the right holder if they wish to continue manufacturing the product in a post-COVID economy.

It is also worth noting that the LDCs, which form a major portion of the countries supporting the proposal, anyway do not have any obligations under the TRIPS till the latter half of 2021, and are hoping to extend the same by another 2 years. Further, even if the waiver is passed, the countries which have higher obligations than those provided under TRIPS by virtue of their investment agreements – for instance longer test-data protection or market exclusivity periods – could still face difficulties in navigating their way around them.

The waiver proposed, in its current form, suffers from some practical challenges that could impede its effectiveness. Notwithstanding the praise it has received, it has been criticised for stifling innovation and progress, with some critics going to the extent of calling it “unnecessary”.  While we would not go so far as to call the measure unnecessary, we believe that it needs to be suitably modified to address some concerns, such as those highlighted in this post.

Arth Nagpal and Harsh Srivastava are 5^th year B.A. LL.B (Hons.) students at the National Law School of India University, Bangalore. They can be contacted here and here respectively.

The authors thank Prof. Yogesh Pai for his invaluable insights on the issue.

Image Credits: The Guardian