COVID-19 patent waiver: EU at odds

Europe has of late been simultaneously dealing with vaccination campaigns, the Delta wave, sun-seeking holidaymakers and a major international cross-border football tournament. But it has also seen some developments relating to the patents protecting COVID-19 vaccines, in particular the possibility of a patent waiver.

How we got here

In October 2020, India and South Africa (along with Eswatini, Kenya, Mozambique and Pakistan) proposed to waive certain provisions of the World Trade Organization’s (WTO’s) Agreement on Trade-Related Aspects of Intellectual Property Rights (known as the TRIPS Agreement). The goal: to vaccinate the world’s population more quickly to fight the COVID-19 pandemic.

Since then, 100 (mainly developing) countries have endorsed the waiver. However, the US Trade Representative Katherine Tai brought discussions to a new level when, on 5 May 2021, she released a statement stating that, while the Biden-Harris administration believes strongly in IP protections, ‘in service of ending this pandemic, [it] supports the waiver of those protections for COVID-19 vaccines.’

The next day, European Commission president Ursula von der Leyen released a statement of support: ‘The European Union is also ready to discuss any proposal that addresses the crisis in an effective and pragmatic manner. That is why we are ready to discuss how the US proposal for a waiver on intellectual protection for COVID-19 vaccines could help achieve the objective’.

On 25 May 2021, 62 WTO members published a revised proposal for a waiver of the TRIPS provisions in advance of the WTO TRIPS Council, which took place on 8-9 June 2021. The proposal specified that the waiver should apply to health products and technologies, including diagnostics, therapeutics, vaccines, medical devices and personal protective equipment used to tackle COVID-19.

Patent waiver – a magic solution?

Ambassador Tai said in her statement that waiver ‘negotiations will take time given the consensus-based nature of the [WTO] and the complexity of the issues involved’. Similarly, Ursula von der Leyen said that ‘in the short run, we call upon all vaccine production countries to allow exports and to avoid measures that disrupt supply chains.’

None of this comes as a surprise, given that all WTO members will have to agree to waive their TRIPS obligations. Furthermore, to implement such a waiver at a national level, countries must renegotiate the complex legal requirements currently hindering production and supply by potentially patent-infringing vaccine producers. Needless to say, this process could take months, if not years.

In addition, from a legal perspective, it is still unclear what exactly a ‘patent waiver’ will mean at a national level. For example, in Germany, would this lead to a waiver of the injunction? If so, what requirements would accompany the waiver? Would the newly introduced proportionality test come into play? And how exactly would all of this differ from the German government’s power to grant an exploitation order or the Federal Patent Court’s power to grant compulsory licences?

Meanwhile, voices raising doubt that an IP waiver will have the desired effect in practice are growing louder – while it could have a negative impact on research and development given IP’s key role as an incentive. In this context, members of the European Parliament’s International Trade (INTA) Committee discussed views on a TRIPS waiver with the European Commission on 25 May 2021 and concluded that, while the EU is willing to discuss the US proposal in more detail, it does not think the IP waiver will help supply the vaccine to more people over the short term. Further, the Commission thought the main obstacles would be shortages of raw materials and export controls rather than IP issues.

Europe in disagreement

It seems the European Commission and the European Parliament are at odds over what to do about patent waivers:

On 4 June, the European Commission submitted a proposal ‘seeking the commitment of World Trade Organization (WTO) members for a multilateral trade action plan to expand the production of COVID-19 vaccines and treatments, and ensure universal and fair access’. This proposal did not include a patent waiver. Instead, it focussed on, among other measures, compulsory licences and limiting export restrictions.

Five days later, though, the European Parliament approved a (non-binding) joint resolution that included an amendment adopted by a very narrow margin. While also referring to compulsory licences, the European Parliament said it still supported patent waivers for vaccines, emphasizing ‘that international trade policy must play a proactive role in this endeavour by… revisiting the global framework for intellectual property rights for future pandemics’ and calling ‘for support for proactive, constructive and text-based negotiations for a temporary waiver of the WTO TRIPS Agreement, aiming to enhance global access to affordable COVID-19-related medical products and to address global production constraints and supply shortages’. Interestingly, Members of the European Parliament voted according to the position of their constituencies rather than their political group.

This disagreement is reflected across the EU27 member states. Germany rejected the proposal for a patent waiver, saying the greatest challenges related to production capacity and quality control rather than IP: ‘The protection of intellectual property is a source of innovation and must remain so in the future’. Portugal, Estonia and Belgium are, as the European Parliament phrases it, ‘reportedly reserved’ as well. Meanwhile, Greece, Italy and France support a waiver. At the G7 leaders’ summit in June, French President Emmanuel Macron once more expressed his support for waiving vaccine patents.

What does this mean for your business?

WTO members have begun discussing the patent waiver proposal, with further negotiations planned over the coming months. However, it remains unclear when a decision will be made, what the agreement will look like and to what extent the European Commission’s alternative proposal on working within the existing legal framework will be included.