The South Centre organized on 11 October 2022 a public webinar on the future of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to discuss whether a reform of the Agreement and/or authoritative interpretations of some its key provisions are needed. The webinar was organized in light of the outcome of the 12th World Trade Organization (WTO) Ministerial Conference regarding the request for a waiver of certain TRIPS obligations for the Covid-19 pandemic.
The webinar was moderated by Dr. Viviana Muñoz-Tellez, Coordinator of the Health, Intellectual Property and Biodiversity Programme of the South Centre. The panelists reflected on the limitations and opportunities existing within the current framework, and what further actions could be taken under the WTO rules to promote access to medical technologies for a sustainable and equitable future. The recording of the session is available here: https://www.youtube.com/watch?v=hmgUYHGyK1Y.
Professor Anne Orford, Melbourne Laureate Professor & Michael D Kirby Professor of International Law, University of Melbourne, made a presentation based on her 2022 Annual Kirby lecture on international law, entitled ‘Why it’s time to terminate the TRIPS agreement’ (available here: https://www.youtube.com/watch?v=jQGQe5_-j1M). She argued that it is time to talk about terminating the TRIPS Agreement, stressing that the Agreement established a novel and deeply flawed global regime of monopoly rights.
Prof. Orford explained that patents create property rights and give the owner control over the physical production of material objects resulting from those inventions for a limited period. States had designed patent laws to achieve many goals: enabling spread of useful knowledge, access to commodities, to promote invention. A balance in the law could be achieved by requiring that the patent actually be worked or exploited in the territory and ensuring that the invention is published clearly so that others can really manufacture it. Many European countries refused to grant patents on pharmaceuticals until the 20th century, and most did with shorter periods than 20 years, and required the patent to be exploited in the country of grant. In addition, countries such as India and Brazil also excluded such patents, leading to the development of successful pharmaceutical industries. Indeed, countries in the process of industrialization always limited protection of foreign technologies in the 19th century. Subsequently, we see the internationalization of the debate and the creation of the World Intellectual Property Organization (WIPO), which currently administers many intellectual property (IP) treaties. But these agreements were largely unenforceable and maintained the compromise between the private interest of the patent owners and the public.
The United States, working explicitly with Pfizer and other corporate stakeholders, and with the support of the European Commission and Japan, aimed to introduce a new US-style IP system at the global scale. The TRIPS Agreement is one of the most important outcomes of that effort. It links IP to the new enforcement mechanisms of trade disputes. It provides for compulsory minimal standards of protection, including patents for a period of 20 years, which are longer than most countries back then (if they had such protection at all). It required measures for enforcing those rights and no requirement for working the patent in the country. Therefore, it created a mechanism to ensure exclusive rights over importing markets. It was all very controversial during the negotiations, in particular with the concerns on public health.
This context led to the discussion on flexibilities of the TRIPS Agreement. However, attempts to utilize them have been refrained by threats of disputes at the WTO as well as investment and other agreements. In addition, cumbersome and lengthy negotiations with patent owners are needed to use some of such flexibilities. The Covid-19 pandemic provided many examples of that. The TRIPS waiver proposal originally tabled by South Africa and India was also blocked by a group of developed countries.
Countries signed the TRIPS Agreement for three main reasons, she argued: (i) they needed to do so to accede to the WTO, given the single undertaking / broader packaging during the Uruguay Round; (ii) the creation of the dispute settlement body and the Appellate Body, to which the Members agreed to submit to; (iii) the inclusion of TRIPS flexibilities as part of the Agreement. These reasons no longer exist, and the current context has radically changed the circumstances of States’ obligations. Accordingly, under the international law principle of the fundamental change of circumstances in the context of which a treaty is negotiated and adopted (rebus sic stantibus), there is room for its termination. Ideally, all States would agree to terminate the TRIPS Agreement, but other options do exist. For example, the Energy Charter Treaty (ECT) is under scrutiny, and European States are now thinking about decarbonization and to withdraw from it.
Prof. Orford noted that despite the idea of termination being seen as a threat to the rule of law, enabling change is part of what lawyers do. International law actually provides instruments for reform, and the systemic blocking of the use of flexibilities, entangled with the inability of the WTO to address public health, provides in her opinion the grounds for termination of the TRIPS Agreement.
Professor Siva Thambisetty, Associate Professor of Law, London School of Economics (LSE), noted that the TRIPS is ‘more than just an agreement’. Even if it is legally terminated, it will continue to have wide-reaching implications. In this sense, it is ‘immune’ to termination. In such regard, she made three comments:
1. TRIPS and International IP are a mode of moral argumentation. This is a shorthand for a cluster of ideas, formal rules, norms, assumptions, and values, often lumped together in a way that protects them from normative and empirical scrutiny, turning them into deeply entrenched practices. Two examples can be made: (i) equation of the moral basis of property with moral arguments for intellectual property; and (ii) the equation of the public interest with the patent holder’s interests. In both cases, these ideas protect IP from scrutiny and criticism.
2. Inability to internalize notions of harm. IP does not link harm to failures to account for those who are rendered invisible: those who suffer from lack of access to essential medicines are not directly related to the IP rights. This is a high degree of immunity for change. When there is no recognizable crisis, it becomes increasingly difficult. Therefore, the efforts to linking prices to patents are important to materialize such harm.
3. Collaterization. International law increasingly relates to IP in different fora (e.g., traditional knowledge and the proposal for a disclosure requirement in patent applications). But in practice, there is a hierarchization between agreements, whereby the TRIPS Agreement is treated as superior. Collaterization arises when IP issues are always deferred to WTO or WIPO as the best fora for its discussions, or when there is inertia, maintaining old practices. This is a feature created by the TRIPS Agreement.
To conclude, Prof. Thambisetty mentioned two strategies in addition (or perhaps alternatives) to the idea of termination of the TRIPS Agreement. Firstly, a focus on private ordering in regional agreements [i.e., a governance conducted by private contracts and other instruments at a regional level]. IP enables an exclusive leverage to make social choices and generate socio-economic relationships around the technology (which is known as ‘configuration power’). Not enough attention has been laid out to this private sector’s self-organizing capacity, which goes beyond IP rights themselves. Pooling mechanisms (both demand and supply pooling), as well as pool responsive regulations between countries may address governance problems.
Secondly, increase what Prof. Thambisetty deemed ‘micro-processes’ of law-making [i.e., the adoption of TRIPS flexibilities via legal and policy tools at the national level] . Examples include the Section 3(d) of the Indian Patent Law, which adopts a high threshold of patentability criteria, the research exception in the patent law of South Africa, which may have allowed African scientists to reverse-engineer Moderna’s Covid-19 vaccine, and the participation of the regulatory agency (ANVISA) in pharmaceutical patent application process in Brazil. These concrete micro-processes have an important impact in injecting public values into IP law.
Fatima Hassan, Founder and Director, Health Justice Initiative (South Africa), argued that both the HIV and the Covid-19 crises showed that the WTO is not ‘fit for purpose’, with little transparency and a lot of secrecy in negotiations. Recalling a submission by South Africa in July 2020, prior to their October 2020 waiver proposal, she highlighted that the response to the pandemic required TRIPS flexibilities, but even these would not be sufficient in a broader context of socio-economic crisis, food and financial crisis and job losses. In the IP sphere, the issue went beyond patents and included copyrights, industrial designs, and trade secrets. In addition, there are legal, technical, and institutional challenges in using TRIPS flexibilities – including trade and political pressures. In this context, technology access pooling mechanisms, including the World Health Organization (WHO) Covid-19 Technology Access Pool (C-TAP), based on voluntary cooperation, and the COVAX facility established as partnership between the WHO, the Gavi and the vaccine industry, were limited and insufficient. The limited and often non-transparent licenses between pharmaceutical companies and governments cannot address the needs of the pandemic, she said.
Regarding the negotiation of the TRIPS waiver proposal, Ms. Hassan described how it received wide support but was promptly gaslighted by a block of countries in the European Union, United Kingdom, Switzerland and the US. She further noted how the EU counterproposal to the TRIPS waiver was based on a (limited) use of compulsory licensing – a tool which many countries, including the EU, had historically advocated against in previous contexts, including during the HIV/AIDS crisis. The outcome of the TRIPS waiver negotiations ultimately mirrored what a small number of developed countries wished for (in the case of the US government, a decision limited to vaccines) and which actually curtailed rather than truly supported global access to Covid-19 vaccines (with the silver lining of no export limitations). Timely access did not occur in the Global South, and most countries didn’t and continue not to have access to therapeutics. As of now, there are still ongoing negotiations on whether to expand the waiver to diagnostics and therapeutics, but with little expectations. The mismatch between the original proposal and the current status shows a lot about the TRIPS, she added.
Consequently, Ms. Hassan argued that such negotiations and the unprecedented power of a few pharmaceutical companies and rich countries are distorting democratic traditions both at the international and national levels. To exemplify, she noted how in practice a country will not take measures to safeguard public health if they risk jeopardizing trade relations, negotiations in fisheries and agriculture, etc. She described the TRIPS and WTO systems as creators of an unfair deal-making process in which there are winners and losers; sometimes, some can get in the ‘best’ scenario what is actually a bad deal. As such, she argued that the way TRIPS functions, it is centered on the power of pharmaceutical corporations, and therefore the WTO in the way it is currently structured is not fit-for-purpose. There is overall, and beyond the WTO, a deference to monopolies’ power and to the idea that innovation needs to be rewarded by extracting as much power and profits from it.
To conclude, Ms. Hassan noted that the world remains in a perilous situation for access, which has enabled the commodification of life-saving technologies. It’s a quite radical configuration and we will continue to be in the same situation for years to come, noting that however we cannot continue with such a level of lack of transparency and secrecy.
Nirmalya Syam, Senior Programme Officer – Health, Intellectual Property and Biodiversity Programme, South Centre, began by noting that while TRIPS flexibilities are there and that the Doha Declaration clearly stated that countries can fully use them, their utilization involves political and economic considerations. For example, a pharmaceutical company would need to decide whether to seek a compulsory license (CL) or not taking into consideration its own commercial ramifications – it may have value chain relationships with global pharmaceutical companies and be deterred to use a CL. Developed countries also exert pressure to restrict or impede cases of implementation of the TRIPS flexibilities. This political pressure takes place, for instance, via unilateral coercive measures such as the US Special Section 301, and the recent similar reporting mechanism launched by the EU. In addition, dispute settlement challenges (including challenges under investment agreements) may deter the use of flexibilities and of laws that define their scope.
In that context, Mr. Syam made comments with respect to specific flexibilities, noting that it is important to look at how to implement them as well, raising attention to how the interpretation of the TRIPS Agreement may provide much more leeway to developing countries:
- Rigorous examination of patent applications. As noted by the South Centre in multiple occasions, this is the most important flexibility. If you can screen out egregious patent applications which are filed via rigorous examination, you have less problems afterwards and less need for post-grant exceptions such as compulsory licenses.
- Compulsory licensing. This crucial policy tool requires streamlined procedures for their issuance, which is dependent on which institutions are involved in the process, who can apply for a CL, what are the royalties to be paid to the patent holder, what are the grounds for the issuance of a CL, whether a separate declaration of public interest is needed, among others.
- Parallel importation. One deterrent is the theory of consent, according to which it is only permissible to undertake parallel imports if the product was put in the relevant market under consent of the patent holder (e.g., under a voluntary license). This is not required in the TRIPS Agreement, and nothing restrains countries from adopting a more expansive theory of parallel importation. Some countries do that and allow for parallel importation of products put on the market by third parties – Pakistan even refers to those made available via CLs. This issue has been discussed at the recent Global Forum organized by the South Centre.
- Exception to Patent Rights ingrained in Article 30, TRIPS. Even if you apply the so-called three-step test (as done, for instance, in the WTO Canada Patent case) to interpret exceptions to patent rights, this test can be applied flexibly - this test may enable a legitimate local production by third parties of patent-protected products for exportation.
- Non-violation and situation complaints, to which there is a moratorium at the WTO. These refer to the possibility of bringing complaints to the WTO even without a direct violation. The interpretation by the US and Switzerland has been that such complaints would already be possible under the TRIPS, but this is a literal reading of the text which should be refuted. Many scholars have argued that in relation to TRIPS, a national deference standard should be applied. For example, Article 17.6 of the Agreement on Antidumping adopts a national deference standard for interpreting disputes related to antidumping. When the WTO agreements were adopted, the understanding was that this provision would be given consideration in further agreements – this discussion never really happened.
- Enforcement of flexibilities. Remedies and measures should be put in place, but perhaps one important issue is how to enforce the flexibilities. One of the barriers for such enforcement are unilateral coercive measures and TRIPS-Plus measures in free trade agreements (FTAs). A provision for Parties to restrain from adopting such measures or pushing developing countries to adopt them could also be given consideration to.
Question and Answers (Q&A) Session
During the Q&A Session, concrete ideas on how to move forward and actions to promote a more balanced global IP system were discussed. Some emphasized the role of local domestic campaigns, others noted that new interpretations of the TRIPS Agreement could generate relevant test cases for the future. Revision or amendment of the TRIPS can be brought to the WTO General Council or the TRIPS Council under existing rules (Article 10 of the WTO Agreement), in addition to the termination in the light of fundamental new circumstances (under Article 62 of the Vienna Convention on the Law of Treaties). The issue of sustainable manufacturing of essential products was raised as a legal and political necessity.
In addition, some speakers noted that human rights mechanisms lack the enforceability and the capacity to shape property rights which the TRIPS Agreement has. Accordingly, there is overall little expectation on the potentials of human rights law vis-à-vis IP, since there is a de facto power hierarchization which overvalues IP. Still, the need to revisit property rights is crucial – and this has taken place in the past (e.g., when slavery was abolished, as enslaved individuals were considered property). Furthermore, we need to look at the instances where human rights arguments have been used to protect IP rather than promote access – for example, Pfizer argued that a compulsory license request in the Dominican Republic would be a violation of its human right to property rights, misguiding what human rights seek to protect.
Other areas for further exploration that were mentioned include transparency requests concerning pharmaceutical R&D costs, disclosing the contracts signed between pharmaceutical companies and governments, and rethinking the clinical trials model conducted in the Global South without guarantee of access to those technologies later. Finally, a revamping of other fora apart from the WTO, such as the United Nations Economic and Social Council (ECOSOC), the United Nations Conference on Trade and Development (UNCTAD) and the WHO, are necessary as to create new avenues for a coalition of developing countries.
 This session was a follow-up to the South Centre’s 2021 World Trade Organization Public Forum working session (https://www.wto.org/english/forums_e/public_forum21_e/pf21_session_e.htm?session=474), which kick-started a discussion on the future of the TRIPS Agreement after the Covid-19 pandemic. Its recording is accessible at: https://www.youtube.com/watch?v=wVsJElxsY1k&list=FLAr5LWEkWFNYSUdLj28seZQ&index=7
 See: WTO Ministerial Decision on TRIPS - WT/MIN(22)/W/15/Rev.2. Available from https://www.wto.org/english/news_e/news22_e/trip_13oct22_e.htm
 For a background material to the presentation, please see: Thambisetty, S., McMahon, A., McDonagh, L., Kang, H., & Dutfield, G. (2022). Addressing Vaccine Inequity During the Covid-19 Pandemic: the TRIPS Intellectual Property Waiver Proposal and Beyond. The Cambridge Law Journal, 81(2), 384-416, available from: https://www.cambridge.org/core/journals/cambridge-law-journal/article/addressing-vaccine-inequity-during-the-covid19-pandemic-the-trips-intellectual-property-waiver-proposal-and-beyond/7F2A8FB2EA5395265DAB44A3BC2BE223.
 See: COMMUNICATION FROM SOUTH AFRICA - INTELLECTUAL PROPERTY AND PUBLIC INTEREST: BEYOND ACCESS TO MEDICINES AND MEDICAL TECHNOLOGIES TOWARDS A MORE HOLISTIC APPROACH TO TRIPS FLEXIBILITIES, IP/C/W/666. Available from: https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=265148,265149,265156,261161,260992,260986,260928,260916,260917,260876&CurrentCatalogueIdIndex=2
 See: South Centre Second Global Forum on Intellectual Property, Access to Medicines and Innovation report at https://us5.campaign-archive.com/?u=fa9cf38799136b5660f367ba6&id=25974cb295
 See Canada – Patent Protection of Pharmaceutical Products – Complaint by the European Communities and their Member States – Report of the Panel (WT /DS114/R).
 See Correa, C., Correa, J (2022). MANUFACTURING FOR EXPORT: A TRIPSCONSISTENT PRO-COMPETITIVE EXCEPTION. South Centre Research Paper 155. Available from: https://www.southcentre.int/wp-content/uploads/2022/05/RP155_Manufacturing-for-Export-A-TRIPS-Consistent-Pro-Competitive-Exception_EN.pdf.
Author: Vitor Ido is Programme Officer of the Health, Intellectual Property and Biodiversity Programme of the South Centre.