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Info Service on WTO and Trade Issues (Jun22/23) Intense IP Negotiations are Underway, resolution on Eligibility Criteria Outstanding. Geneva (Sangeeta Shashikant): Even as the 12th Ministerial Conference (MC12) is approaching to a close there is no final agreement on the intellectual property text. WTO Member Members are awaiting United States and China resolution on the issue of eligibility criteria with respect to the TRIPS Decision. It remains unclear if there will be any resolution, even as discussions between US and China are underway, according to a diplomatic source. Hence the main outstanding issue in the TRIPS Decision is the eligibility criteria. Ministers are expected to consider and agree to two ministerial documents: Ministerial Decision on the TRIPS Agreement (TRIPS Decision) and the Ministerial Declaration on WTO Response to the COVID-19 Pandemics and Preparedness for Future Pandemics (WTO Response Declaration). The fates of these documents are interlinked. The WTO Response Decision contains a placeholder for the TRIPS Decision. Developing countries have long emphasized that there cannot be a credible WTO Response Declaration without addressing concerns related with intellectual property. Developed countries have persistently sought to limit the scope and application of the TRIPS Decision. They insist on a diluted future commitment to address therapeutics and diagnostics in the TRIPS Decision text as well as to narrow the definition of the “subject matter of a patent” which could result in a limited use of the Decision. Eligibility Criteria Footnote 1 remains bracketed as discussions between US and China are underway to unlock the disagreement. Footnote 1 states: “[For the purpose of this Decision, all developing country Members are eligible Members. Developing country Members with capacity to export vaccines are encouraged to opt out from this Decision.] [For the purpose of this Decision, developing country Members who exported more than 10 percent of world exports of COVID-19 vaccine doses in 2021 are not eligible Members.]” The 10% eligibility criteria is a proposal from the US that would mainly exclude China. In the run-up to MC12, China has said unambiguously that it will opt-out from availing the flexibilities in the TRIPS Decision only on the condition that the particular square-bracketed footnote on 10% eligibility is removed. It is widely known that this approach is unacceptable to the US that appears intent on specifically targeting China for domestic political reasons. Civil society and legal experts have also raised concern about the proposed eligibility criteria. The first bracketed sentence encourages developing countries with production and export capacity to opt-out of using the decision and so then, how will supply be made available? Further this option will embolden developed countries and Big Pharma to increase further pressure on developing countries with capacity to export to stop using non-voluntary licenses under Article 31 TRIPS. The second bracketed sentence about 10% eligibility criteria sets a very negative and harmful precedent in other areas of negotiation in the WTO where developed countries have persistently tried to limit the number of developing countries that may benefit from special and differential treatment in the WTO. It could also potentially exclude other developing countries in future decision on therapeutics, if the same criteria were applied. Both options are discouraging/penalizing developing countries with production and export capacity, said an expert closely following the negotiations, adding that it is a significant departure from the Doha Declaration on TRIPS and Public Health adopted at the height of the HIV/AIDS crisis and the use of non-voluntary license under Article 31 of TRIPS, both of which are applicable to all Members. Therapeutics & Diagnostics Civil society organizations around the world have expressed concern with the limited scope of the TRIPS Decision to vaccines, insisting that the TRIPS Decision should be more comprehensive and also extend to therapeutics and diagnostics pointing to the original TRIPS Waiver proposal (IP/C/W/669/Rev.1) The TRIPS Decision text in paragraph 8 however only commits to addressing therapeutics and diagnostics within 6 months. The UK and Switzerland have been opposed to any definitive commitment to finding resolution within 6 months for therapeutics and diagnostics. They would prefer text that states ‘whether to extend this decision” to cover the production and supply of COVID-19 diagnostics and therapeutics, rather than “on its extension” text contained in the proposal of the Director General on 3 May. Paragraph 8 text states “No later than six months from the date of this Decision, Members will decide [whether to extend this decision][on its extension] to cover the production and supply of COVID-19 diagnostics and therapeutics.” [At the time of publication of this article, there appears to be agreement to retain the text in the Director General’s proposal: “No later than six months from the date of this Decision, Members will decide on its extension to cover the production and distribution of COVID-19 diagnostics and therapeutics.” ] Subject matter of a patent Subject matter of a patent is another area of contention. The EU, UK and Swiss prefer a narrow definition subject to “necessity” test by using terms such as “required” and “necessary” to limit the use of compulsory licensing. Such an approach could potentially impact the production and supply of COVID-19 vaccines which is the objective of the Decision. Options being considered include: “For the purpose of this Decision, it is understood that 'patented subject matter' includes ingredients and processes necessary for the manufacture of the COVID-19 vaccine.” “For the purpose of this Decision, it is understood that 'subject matter of a patent' refers to COVID-19 vaccines; and [includes] ingredients and processes required for the manufacture of the COVID-19 vaccines.” “For the purpose of this Decision, it is understood that 'subject matter of a patent' refers to COVID-19 vaccine, and all processes, ingredients and other products composing a COVID-19 vaccine and used for its manufacture.” “For the purpose of this Decision, it is understood that 'subject matter of a patent' refers to COVID-19 vaccines[; and] [, including] all processes, ingredients and other [components] [products] [substances] [inputs] [elements] [process auxiliaries] [of which a COVID-19 vaccine is composed] [[necessary][required][used] for the manufacture of the COVID-19 vaccine].” The EU is said to be opposed to using the word “other products”. [At the time of publication of this article, there appears to be agreement to retain the text in the Director General’s proposal: “For the purpose of this Decision, it is understood that 'patented subject matter' includes ingredients and processes necessary for the manufacture of the COVID-19 vaccine.” Duration Paragraph 6 of the TRIPS Decision has also been contentious. In paragraph 6, the UK was seeking to introduce a TRIPS-plus element that would terminate any compulsory license with the end date of the Decision with the addition of “so that authorized uses continue no later than”, directly undermining the use of compulsory license as provided for in the TRIPS Agreement. Under Article 31 of TRIPS Agreement, such licenses can be used for production and export (the non-predominant portion) for the duration of the patent term. As the only waiver in the TRIPS Decision is that of Article 31(f) of TRIPS (i.e. waiver of the prohibition to export the predominant portion of production), only this aspect should be time limited. [Paragraph 6: An eligible Member may apply the provisions of this Decision [so that authorized uses continue no later than][until] [3][5][10] years from the date of this Decision. The General Council may extend such a period taking into consideration the exceptional circumstances of the COVID-19 pandemic. The General Council will review annually the operation of this Decision] [At the time of publication of this article, there appears to be agreement to retain the text in the Director General’s proposal with agreed duration of 6 years: “An eligible Member may apply the provisions of this Decision until 6 years from the date of this Decision. The General Council may extend such a period taking into consideration the exceptional circumstances of the COVID-19 pandemic. The General Council will review annually the operation of this Decision.”] WTO Response Decision Meanwhile in the wee hours of the morning, some developed countries attempted to reopen the WTO Response Declaration which in principle, had been agreed to. Previously, UK and Switzerland have called for the deletion of the paragraphs on intellectual property that mostly restates text from the Doha Declaration on TRIPS and Public Health as follows: [12. We recall the Doha Declaration on the TRIPS Agreement and Public Health of 2001 and reiterate that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we reaffirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all. 13. We further reaffirm that Members have the right to use, to the full, the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and Public Health of 2001, which provide flexibility to protect public health including in future pandemics. 14. (Placeholder to recall a TRIPS Waiver outcome.) 23. We underscore the importance of understanding how WTO rules have supported Members during the COVID-19 pandemic, and their role in future pandemics. We affirm the need to review and build on all the lessons learned and the challenges experienced during the COVID-19 pandemic, to build effective solutions in case of future pandemics including on balance of payments, development, export restrictions, food security, intellectual property, regulatory cooperation, services, tariff classification, technology transfer, trade facilitation, and transparency, in an expeditious manner. ] Developing countries present, reminded the developed countries seeking to reopen the text that without any agreement on the TRIPS Decision, there will be no agreement on WTO’s Response to Pandemic.
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