07 Mai 2021

Three Crises and One Waiver

The debate on the waiver of the international patent protection regime for Covid-19 vaccines, fueled by the surprising support of the United States and the opposition of the German government, entwines three major crises of our time: the Covid-19 crisis, the crisis of the WTO, and the crisis of intellectual property. The first is about public health, the second about international economic law, and the third about IP law. There is no shortage of people who have both expertise and strong opinions on one or two of these. Only few can offer equally competent opinions on all three, and certainly not us.

Covid, vaccines, and the Global South

Which is why we have called Jayashree Watal. She has been working for more than three decades on the patent-protection v. access-to-medicine dilemma, was in charge of that topic for 18 years at the WTO secretariat, had negotiated the compulsory licence clause into the TRIPS agreement in 1989/90 on behalf of India, and now is a professor at the Georgetown University School of Law in Washington D.C. Who knows if not she?

It’s obviously true, she says: „Vaccine equity is not happening. With the best of intentions or efforts, but it’s not happening.“ But will a waiver of intellectual property rights, in and of itself, improve vaccine equity? „No. It won’t. That’s clear.“

Manufacturers of generic medicaments in the Global South are capable to reproduce a patented molecule – say, an HIV medicament – or certain biologic products. But to produce a modern mRNA or vector vaccine in large quantities without the cooperation and guidance of the company that has originally developed it is a different matter. If a country waives that company’s intellectual property rights, it will be less likely, not more, that it will readily cooperate. „A waiver helps to keep generic manufacturers safe from patent litigation. But they won’t even get to that stage without the cooperation of the inventors.“ On top of that, not all that you need to produce these vaccine generics is patented and, thus, disclosed in the patent application. Much is protected against competitors not via patent law but by keeping it secret. „You can’t force the company that hold these secrets to pass it on to you.“

So why does India, along with South Africa, push so vehemently for a waiver? „Indian generic manufacturers want to produce these products“, Jayashree Watal says. „Of course they do. Every company wants a slice of this hugely profitable pie that is Covid-19 vaccine products. But what they want is voluntary licences.“ The proposal of India and South Africa can be seen as an „indirect attempt to put pressure on the original manufacturers to cooperate. Whether it works or not is another matter.“ What the proposal, at any rate, will definitely not achieve is speeding up the Covid-19 vaccination rate in India or other parts of the Global South.

The permanent crisis of the WTO

One way to distribute vaccines globally and equitably would be to establish an „International Pandemic Fund“ as proposed by Jayashree Watal. Largely (pre-)financed by the EU and the USA, such an organization would provide money and expertise and, with a speedy decision-making process and without much ado, would distribute the necessary goods where they are needed. According to Watal, setting up this body would be possible in the short term and could already be used in the multilateral fight against this very pandemic.

It would be great, of course, if an „IPF“ existed and worked in practice. In the past, by the way, it is important to remember that it was the WTO which used to be the envy of all other multilateral legal regimes because it worked so well. It is not only its 60 or so agreements, which regulate the rights and obligations of members in great detail, that set it clearly apart from many other areas of international law, which are rarely codified this extensively. The „jewel in the crown“ of the WTO, however, is undoubtedly its dispute settlement mechanism, which is not only compulsory but also provides an appeals process and offers effective means – at least compared to other international legal systems – to enforce decisions. Whether the WTO can live up to the expectations that some appear to place in it to fight this pandemic seems unlikely, as the WTO has been in crisis for years. The major problem may be the organization’s decision-making process: decisions are usually taken by consensus, including any possible TRIPS waiver. So all it would take is but one of the 164 members not going along, and the waiver would remain nothing but a fancy idea. It would not be the first time that the decision-making process by consensus turns out to be a major impediment.

++++++++++Advertisement++++++++

Call for application – 12 doctoral research positions

The International Doctorate Program „Business and Human Rights” (IDP B&HR) invites applications for 12 doctoral research positions (4-year contracts) starting 1 Nov 2021. Funded by Elite Network of Bavaria the IDP B&HR establishes an inter- and transdisciplinary research forum for excellent doctoral projects addressing practically relevant problems and theoretically grounded questions in the field of business and human rights. Research in the IDP B&HR will focus on four distinct areas:

  • Global value chains and transnational economic governance
  • Migration and changing labour relations
  • Digital transformation
  • Environmental sustainability

The IDP B&HR will be affiliated with the Universities of Erlangen-Nürnberg, Bayreuth and Würzburg.

Applicants need an excellent university degree at master’s level in a relevant discipline (law, management, sociology, political, or information science) and are expected to have very good English proficiency.

Applications must be sent in a single PDF document by 15 June 2021 to humanrights-idp@fau.de. The full call can be found here.

++++++++++++++++++++++

That this system of decision-making is susceptible to crisis to began to emerge some 20 years ago – in an organization that began its work just over 26 years ago. In 2001, negotiations began on the Doha Round, which was intended to strengthen the interests and needs of developing countries in the world trading system. The negotiations were supposed to be concluded by 2005. They have not been concluded to date and are considered to have failed. Then, in late 2019, a key part of the WTO system was crippled. The U.S. administration, then still under Trump, had blocked the appointment of the new members of the dispute settlement’s Appellate Body. Since then, whenever members appeal first-instance decisions of the panels they appeal into the void.

Despite being hailed as a rule-based system, the WTO decision-making process by consensus is essentially a political-diplomatic one that is still based on the GATT, the WTO’s predecessor. It may be sovereignty-friendly, but it is cumbersome, if it is at all workable with such a large number of members. The fact that treaty changes are usually negotiated as packages and that the „all-or-nothing“ approach applies in addition to the „all-or-none“ principle, does not help. This is also reflected in the contracts. They are a relic of the late 1980s and early 1990s. Whoever searches for the term „digital“ in the core agreements will be disappointed.

So is the WTO inevitably dying a slow death because of its inability to act? Not necessarily. Already during the debacle surrounding the appointment of the Appellate Body members, Ernst-Ulrich Petersmann pointed out that decisions in the voting procedure under Art. IX:1 of the Marrakesh Agreement are possible: If consensus cannot be reached, a majority vote is taken. With „Merkel’s Kriegserklärung“ against the suspension of patent rights, these voices have already re-emerged. So far, WTO members have not made use of this possibility, and it would be a kind of disruption of the system. But perhaps it is time to think more profoundly about whether decision-making by consensus is still suitable to solve the problems that have paralyzed the organization to a large extent. For the moment, at least, it seems that the WTO does not have much to lose anyway.

Property as a right of exclusion

In these times, the narratives traditionally used to justify the right to the exclusive exploitation of tangible and intangible goods tend to be found somewhat unpersuasive by a rising number of people, whether in rental housing, academic publishing or software development. In the case of pharmaceutical patents, the narrative is that no manufacturer will take the risk of investing in costly research and development and take the risk to fail along the way if any competitor can just come along and copy what they did without paying any of costs involved. This is perfectly plausible for ordinary drugs that doctors prescribe and pharmacies sell. But for state-funded and operated vaccination campaigns? Products that are pre-ordered, paid for and distributed by the state?

In general, it is not easy to see why a pharmaceutical company would need a monopoly as an additional incentive to enter into such a risk-free deal. It is even more difficult to understand why this exclusivity shou