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Discussion on the extension of COVID-19 IP waiver

At MC12, trade ministers adopted the Ministerial Decision on the TRIPS Agreement, which gives members greater scope to take direct action to diversify production of COVID-19 vaccines and to override the exclusive effect of patents through a targeted waiver over the next five years. It addresses specific problems identified during the pandemic and aims to help diversify vaccine production capacity. It also contains a commitment that no later than six months from the date of the decision (17 June), members will decide on its possible extension to cover the production and supply of COVID-19 diagnostics and therapeutics.

Many members took the floor to welcome the successful outcome at MC12, saying it proved that WTO members can put aside differences and work together to respond to the most urgent health challenges.

A group of developing members who support an extension of the waiver to cover COVID-19 diagnostics and therapeutics circulated a proposal at the meeting including an indicative timeline for the TRIPS Council's next steps in this regard.

These members argued that the waiver on COVID-19 vaccines falls short of their expectation and is not enough to help developing countries comprehensively address current and future health challenges. Equitable access to therapeutics and diagnostics, as pointed out by the World Health Organization (WHO), is critical in helping detect new cases and new variants. They said this waiver extension needs to be discussed with a sense of urgency given the fact that many least developed countries (LDCs) lack access to life-saving drugs and testing therapeutics.

Many developing countries supported the initiative. They highlighted the joint statement made by the three Director Generals of the WHO, the World Intellectual Property Organization (WIPO) and the WTO in June 2021 reaffirming their commitment to intensifying cooperation in support of access to medical technologies worldwide to tackle the COVID-19 pandemic, including vaccines, therapeutics and diagnostics. There was also a shared view that the negotiation process for the waiver extension should be open, inclusive and transparent.

Other members cautioned that more time was needed to conduct domestic consultations on a possible extension of the waiver to therapeutics and diagnostics. Some members also flagged the importance of an evidence-based negotiation as there was no evidence that intellectual property did indeed constitute a barrier to accessing COVID-19 vaccines. Some also reiterated the need for members to fully make use of all the flexibilities that already exist in the TRIPS Agreement (including compulsory licensing) before requesting new flexibilities.

The chair, Ambassador Lansana Gberie (Sierra Leone), asked members that were ready to engage to commence discussing this matter in various configurations. He encouraged members to individually report on progress to the General Council meeting on 25-26 July while some members may need more time to deliberate on the matter, he noted. The chair will inform members how best to structure discussions on this matter going forward, he added.

Members also agreed to continue exchanges under the agenda item of IP and COVID-19 so that the TRIPS Council can keep abreast of new IP measures in relation to COVID-19 and share relevant experience. The Council also decided that the Secretariat will continue compiling and updating all COVID-related IP measures in its document “ COVID-19: Measures regarding Trade-Related Intellectual Property Rights ” to serve as the basis for members' exchanges.

Members noted that this exercise is also in line with the Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics which provides for ongoing analysis of lessons learned and challenges experienced during the COVID-19 pandemic within the relevant WTO bodies.

IP and innovation: IP licensing opportunities

Under an item on IP and Innovation which had been requested by Australia, Canada, the European Union, Hong Kong China, Japan, Singapore, Switzerland, Chinese Taipei, the United Kingdom and the United States, the co-sponsors presented their new submission with a focus on IP licensing opportunities ( IP/C/W/691 , circulated on 23 June).

The co-sponsors highlighted several major ways owners of IP assets can secure a broader reach for their products and services through licensing agreements, which enable IP owners to allow the licensee to make or sell the invention during the licence period. This includes licensing of patents, copyright, trademarks and know-how.

The proponents shared experiences on how to apply different licensing models and build up a friendly ecosystem to foster IP trading. To overcome the knowledge gap and complexity of implementing IP licensing, these countries have developed various toolkits to provide training, online guidelines, contract templates, legal services and dispute settlement so that small businesses and individuals can effectively participate in IP partnerships.

Members welcomed the discussion on IP innovation and IP licensing, with some sharing their domestic practices. WIPO introduced its recent activities in support of IP licensing, including the establishment of an IP and innovation ecosystems sector, the work of the WIPO arbitration and mediation centre, and guidance to help start-ups develop their IP strategy.

Non-violation and situation complaints

WTO members welcomed the decision adopted at MC12 to extend the moratorium on non-violation and situation complaints (NVSCs) under the TRIPS Agreement until the next Ministerial Conference (MC13). The decision tasked members to continue examining possible scope and modalities for NVSCs and to make recommendations to MC13.

This concerns the longstanding issue of whether members should have the right to bring dispute cases to the WTO if they consider that another member's action or a specific situation has deprived them of an expected benefit under the TRIPS Agreement, even if no specific TRIPS obligation has been violated.

This moratorium was originally set to last for five years (1995–99), but it has been extended a number of times since then in the absence of agreement by members on what the scope and modalities could look like if non-violation and situation complaints were to apply to the TRIPS Agreement.

At the meeting, several developing countries suggested continuing the examination of the scope and modalities of such complaints, with the aim of making it applicable to WTO dispute settlement. Some members backed the idea of seeking a permanent solution on this matter while others were concerned that allowing NVSC dispute complaints might jeopardize the flexibilities granted in the TRIPS Agreement.

More information on the TRIPS non-violation issue is available here .

Technical cooperation and capacity building

WIPO briefed the meeting on the WHO-WIPO-WTO COVID-19 Technical Assistance Platform , which offers a one-stop shop to help members and WTO accession candidates address their capacity building needs to respond to the COVID-19 pandemic.

The chair urged members to submit information on their activities in technical cooperation and capacity building as well as incentives for technology transfer by 12 September in preparation for the end-of-year annual review. Members are encouraged to use the online submission system ( e-TRIPS ) to make submissions.

Other matters

The European Free Trade Association was granted observer status for the next Council meeting.

Next meeting

The next TRIPS Council meeting is scheduled for 12-13 October 2022.

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The June 17, 2022 WTO Ministerial Decision on the TRIPS Agreement

Updated Friday, 17 June 2022, 11:30 AM Geneva time.

Early Friday morning, 17 June 2022, the WTO’s 12th Ministerial Conference (chaired by Timur Suleymenov, Kazakshstan), adopted a Ministerial Decision on the TRIPS Agreement (WT/MIN(22)/W/15/Rev.2). The text can be found here .

There were several changes since the June 10 version. The agreement is a limited and disappointing outcome overall that is most accurately described as a narrow and temporary exception to an export restriction, not a waiver.

The Clarifications

There are several so called clarifications in the text on topics, which restate the existing flexibility in TRIPS, sometimes at the risk here of making the provisions seem exceptional, although some developing countries have welcomed them. Among the clarifications, none of which add new legal benefits, are paragraphs 2, 3(a) and 4 of the agreement. The Clarification offered on Article 39.3 of the TRIPS is somewhat helpful, but essentially restates the existing safeguard already part of 39.3. The clarification on paragraph 3(d) and footnote 4 on remuneration do not change TRIPS standards, but will be helpful in national settings, including by the fact that the WTO Ministerial Decision is citing “the Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical Technologies published by the WHO (WHO/TCM/2005.1).” (I am the author of that document).

The TRIPS restriction on exports under Article 31

The TRIPS agreement contains 73 Articles describing various obligations on WTO members as regards the granting and enforcement of intellectual property rights.The original waiver proposal would have provided a clean waiver of 40 Articles in the TRIPS, as regards the manufacturing and supply of any COVID 19 countermeasure. The new considerably scaled back agreement focuses on just one part of the agreement, the 20 word paragraph 31.f which limits exports made under a non-voluntary authorization, often referred to as a compulsory license. The text reads.

(f) any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use;

Article 31.f of the TRIPS is controversial, and often considered an embarrassment to the WTO, because it is designed to limit the economies of scale for products manufactured under a compulsory license, and it also has a very differential impact on countries depending upon their size. For big economies like the U.S., China, India or to some extent Brazil, the impact is less severe than would be for a country like Chile, Ecuador, Portugal, New Zealand, or Thailand, but for every country, it is an odd provision for an organization created to liberalize trade and exploit comparative advantages.

The original TRIPS agreement contains several important workarounds from the 31.f restrictions on exports. Most obviously, Article 31.k of TRIPS waives 31.f, when a compulsory license is a remedy to an anti-competitive practice, which can include, among other grounds, a finding that prices are excessive, or that a patent holder refuses to license a technology on reasonable terms, or that the patented invention is an essential facility, all highly relevant grounds for a vaccine compulsory license.

There is also the possibility to export under Article 30 of the TRIPS, if an exception passes a three step test. The Article 30 approach was strongly supported by health NGOs, generic manufacturers, the World Health Organization (WHO), and several countries in the 2002.2003 negotiations over this issue, and even tested in a 2000 WTO TRIPS dispute case ( DS114 ) relating to the early working of patented inventions, but opposed by the European Union, which favored what is now Article 31bis of the TRIPS.

Arguably the best way to address the export issue is found in the enforcement section of the TRIPS. Under Article 44 of TRIPS, a government or a judicial authority can limit the remedies to infringement to the payment of royalties, including cases where 100 percent of manufacturing output is exported.

In terms of state practice, the Articles 31.k and 44 approaches are the most widely used, by far. (More on the export alternatives here .)

Article 31bis

Article 31bis of the TRIPS was initially adopted by the WTO General Council on August 30, 2003, as an optional waiver of Article 31.f. The core elements of 31 bis are notifications to the WTO, anti-diversion measures, restrictions on eligibility and scope.

31bis applies to drugs, vaccines and some diagnostic tests. It is permanent. It applies to all diseases. 31bis limits the members that can benefit as importers.

In the 19 years since its adoption, the 31bis mechanism has been successfully used only once, by Apotex in Canada for an export of an HIV drug to Rwanda, working with MSF. Apotex indicated it would never attempt to use the mechanism again, giving the complexity and delays they experienced. The Article 31bis mechanism is implemented through national laws, and much of the problems Apotex faced were due to Canadian law and the Canadian government administration of the statute. Few countries have bothered to implement Article 31bis in national statutes, but among those that have, the statutes in India and China offer far more streamlined approaches. India’s version is Section 92a of the patents act, titled “Compulsory licence for export of patented pharmaceutical products in certain exceptional circumstances.” The first two paragraphs in Section 92A of the India patents act read as follows:

(1) Compulsory licence shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory licence has been granted by such country or such country has, by notification or otherwise, allowed importation of the patented pharmaceutical products from India. (2) The Controller shall, on receipt of an application in the prescribed manner, grant a compulsory licence solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as may be specified and published by him.

To date, the India statute has not been tested, but pending compulsory licenses for COVID therapeutics in Latin America may provide timely tests, if any of the cases succeed in the Latin American county.

It is important to note that Article 31bis of the TRIPS is very long, including an Article 31bis, an “Annex to the TRIPS” and and “Appendix to the Annex to the TRIPS Agreement.” The WTO analytical index for 31bis is more than five pages single spaced.

Article 31bis notifications

The Article 31bis notifications requirements are seen as a significant problem, in part because governments have to make notifications to the WTO before the exports take place, and also that the notifications involve quantities, even in cases where the importing country is not certainly how many units to purchase, or when the government is not the sole market for the product.

Governments around the world often see the use of compulsory licensing of patented inventions as politically sensitive, inviting considerable pressure from the United States, the European Union and several of its members and Switzerland. WTO notifications on the prior use of a compulsory license will typically involve several ministers or agency heads, including those working on trade, foreign affairs, health and intellectual property rights, if not heads of state. 31bis requires such notifications from both importing and exporting countries. By, as a practical matter, involving trade and foreign affairs officials, there is a greater opportunity for bilateral pressures to block actions. KEI has worked on multiple cases where importing countries were not willing to make a notification as potential importers without having a committed supplier, and the suppliers could not get their governments to make a notification regarding exporting, without the importing country having made its notifications. All of this has to be repeated for each authorization, which includes specifications of qualities and designations. These were the Rwanda and Bolivia notifications as importers, the only two received by the WTO in 19 years. ( Bolivia , Rwanda ), and Canada as an exporter, the one time an export was actually approved under the 31bis mechanism. ( Canada )

Article 31bis anti-diversion obligations Article 31bis does contain several sections regarding the obligations on importing and exporting countries to prevent the re-exportation of the products. Governments are not sure how burdensome the obligations are in practice, but they do go beyond the obligations included in the pre-31bis TRIPS text, and seem to be conflict with Articles 6 of the TRIPS on the exhaustion of rights. They may also increase the costs to the supplier if they cannot re-export unused products when the forecast demand is not met in one country.

The new Ministerial Decision on the TRIPS Agreement

The new Ministerial Decision on the TRIPS Agreement provides an exception to 31.f export restrictions that is temporary, applies only to vaccines and only to COVID 19, limits which countries and import or export, and contains notification and anti-diversion oblations.

Eligibility for importers and exporters

As noted, Article 31bis provides no limits on which countries can use the exception as exporters, but does limit the eligible importing countries. The 31bis limits on importing eligibility is implemented through an opt-out process, and countries were allowed to opt out as importers in general (37 members have done so, see open letter of April 7, 2020 ), or to declare they would only use the mechanism in emergencies.

The new Ministerial Decision on TRIPS defines eligibility for both importing and exporting in footnote 1:

For the purpose of this Decision, all developing country Members are eligible Members. Developing country Members with existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of this Decision. Such binding commitments include statements made by eligible Members to the General Council, such as those made at the General Council meeting on 10 May 2022, and will be recorded by the Council for TRIPS and will be compiled and published publicly on the WTO website.

While the opt-out language on eligibility is similar to the approach taken in the August 30, 2003 waiver of Article 31.f of the TRIPS, which is now part of TRIPS as 31 bis , there is an important difference. The new agreement limits the countries eligible to import or export.

There is an expectation that all non-developing countries with the current ability to manufacture and export vaccines will opt out. The status of China seems to be addressed in the reference to the May 10 meeting of the General Council, where China expressed willingness to opt out. This is in some ways an astonishing result. The WTO will continue to enforce export restrictions on vaccines from most of the leading vaccine manufacturing countries including many with sophisticated technology. At an NGO briefing during the negotiations, WTO DG Ngozi Okonjo-Iweala seemed to justify this outcome on the grounds that it would be desirable protectionism to achieve the objective of promoting vaccine manufacturing capacity in Africa and other developing countries.

Notifications

The new Decision had marginally less problematic notifications, the most notable improvement is that notifications can be made “as soon as possible after the information is available,” and while it is not exactly clear how different the requirement is, it does seem like an improvement from 31bis.

Anti-diversion

On the anti-diversion language, the new Decision has one notable but perhaps narrow improvement over 31bis, stating that “in exceptional circumstances, an eligible Member may re-export COVID-19 vaccines to another eligible Member for humanitarian and not-for-profit purposes, as long as the eligible Member communicates in accordance with paragraph 5.” NGOs such as TWN have pointed of that the Ministerial Decisions begins by “Noting the exceptional circumstances of the COVID-19 pandemic,” so hard to say how to interpret the “in exceptional circumstances” language here.

The time period is 5 years, which severely limits its usefulness. Paragraph 5 states:

An eligible Member may apply the provisions of this Decision until 5 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.

The exception to the export restrictions will only last 5 years. There are currently no developing country vaccines manufactured under a compulsory license. Moderna is operating under a compulsory license from the United States, but the US will not be an eligible exporter. For the Ministerial Decision to have any use for vaccines, a developing country would have to issue a compulsory license on a vaccine or vaccine input, obtain regulatory approval for that vaccine, and export more than 50 percent of output. Under optimistic scenarios, it could take 2 to 3 years to bring a new COVID vaccine into the market, given the increasing challenges in obtaining regulatory approval not that emergency use authorizations have already been used for multiple vaccines. And that would only give the developer, if they began work today, a few years of sales under the exception. For this reason alone, the Indian government has predicted the Ministerial Decision would not lead to any new vaccine manufacturing. ( June 14, 2022, Statement by Shri Piyush Goyal during the WTO 12th Ministerial Conference at the meeting with co-sponsors of TRIPS Waiver )

“Second, with great difficulty we got the period of 5 years. But, we all know that by the time we get an investor, get funds raised, draw plans, get equipment and set up a plant, it will probably take 2.5-3 years to do that. After that, you will start producing and within 2 years, you will have to bring down your exports to the normal compulsory license level and your capacity will remain idle.”

The Ministerial Decision text will be tied with 31 bis as one of the worst ways to allow exports under a compulsory license. Articles 31.k, 30 and 40 all will dominate. (More on the alternatives here ).

The big pharma industry can be pleased with the precedents on notifications and anti-diversion, which are important to them, as well as the exclusion of most vaccine manufacturers and the 5 year duration.

It is hard to imagine anything with fewer benefits than this, as a response to a global health emergency (other than the earlier negotiating texts for this Decision). The fact that the exception is limited to vaccines, has a five year duration and does not address WTO rules on trade secrets makes it particularly unlikely to provide expanded access to COVID 19 countermeasures.

The pressure this week was to reach consensus in order to make multilateralism look like it works, which seems to have been the main justification for producing this decision.

Silver linings While the text is not expected to impact COVID 19 vaccine equity much or at all, there are some silver linings.

1. In terms of precedents going forward, the texts of notifications and anti-diversion are both much shorter and more usable than 31bis. 2. There is no 31bis requirement to limit imports to countries with no or insufficient manufacturing capacity, a sometimes ambiguous standard oddly unconnected to economic feasibility. 3. The fact that the Decision cites “the Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical Technologies published by the WHO (WHO/TCM/2005.1)” will be useful in national settings. 4. If the decision is extended to therapeutics in six months, it may be much more value, given the supply constraints on therapeutics and the much better regulatory pathway. For therapeutics, even the language on 39.3 will be useful for some countries. 5. It’s not a TRIPS waiver, it’s a useful edit of some problematic elements of 31bis. But it also turns attention back to national governments to do things, and not wait on the WTO.

James Love Twitter: @jamie_love

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December 06, 2022

USTR releases summary of five-month consultation on extending WTO TRIPS decision showing broad divergence of views

WASHINGTON – The Office of the United States Trade Representative today announced support for extending the deadline to decide whether there should be an extension of the World Trade Organization (WTO) Ministerial Decision on the TRIPS Agreement (Ministerial Decision) to cover the production and supply of COVID-19 diagnostics and therapeutics. USTR also announced that it will ask the United States International Trade Commission (USITC) to launch an investigation into COVID-19 diagnostics and therapeutics and provide information on market dynamics to help inform the discussion around supply and demand, price points, the relationship between testing and treating, and production and access.

“Over the past five months, USTR officials held robust and constructive consultations with Congress, government experts, a wide range of stakeholders, multilateral institutions, and WTO Members,” said Ambassador Katherine Tai. “Real questions remain on a range of issues, and the additional time, coupled with information from the USITC, will help the world make a more informed decision on whether extending the Ministerial Decision to COVID-19 therapeutics and diagnostics would result in increased access to those products. Transparency is critical and USTR will continue to consult with Congress, stakeholders, and others as we continue working to end the pandemic and support the global economic recovery.”

Supporters and opponents of extending the Ministerial Decision to COVID-19 diagnostics and therapeutics provided extensive views and arguments. USTR officials also reviewed and analyzed published information, opinions, and analysis. In both cases, the views concern both the system as a whole – whether existing WTO intellectual property protections are an impediment to access to medicines or a critical element of innovation – as well as the specific characteristics of the markets for COVID-19 diagnostics and therapeutics.

The United States respects the right of its trading partners to exercise the full range of existing flexibilities in the TRIPS Agreement, such as in Articles 30, 31, and 31 bis , and the Doha Declaration on the TRIPS Agreement and Public Health, as well as the flexibilities in the Ministerial Decision. These existing flexibilities are available as part of the effort to scale up the production and distribution necessary to overcome the challenges of the ongoing COVID-19 pandemic.

Based on available data and public input, the USITC study will explore key issues such as:

An overview of the products, focusing on WHO-approved COVID-19 diagnostics and therapeutics, including key components, the production process, intellectual property protections, and a description of the supply chain (including the level of diversification in the supply chain);
Information on the global manufacturing industry for these products, including information on key producing countries, major firms, and production data, if available;
Information on the global market for COVID-19 diagnostics and therapeutics, including information on demand and, to the extent practicable, an assessment of where unmet demand exists for key products and contributing factors; market segmentation; and supply accumulation and distribution;
Data and information on global trade in COVID-19 diagnostics and therapeutics, if available, or if not, data and information on global trade in diagnostics and therapeutics generally; and
A brief overview/background of the relevant aspects of the TRIPS Agreement and the United Nations (UN) Medicine Patent Pool (MPP) and a listing of countries seeking to use the Ministerial Decision and those utilizing access to COVID-19 medicines under the MPP.

As part of the Administration’s comprehensive effort to combat the pandemic, the United States supported negotiations that resulted in the WTO issuing the Ministerial Decision on the TRIPS Agreement on June 17, 2022. Since then, USTR officials consulted with Members of Congress and more than two dozen stakeholders, including public health advocates, organized labor, academics, think tanks, companies, and trade associations. USTR has summarized the diverse views heard during the five-month consultation period.

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Analysis of the 12th WTO Ministerial Conference Decision on the TRIPS Agreement

The MC12 TRIPS Decision makes available a new waiver, with respect to COVID-19 vaccines, of an existing obligation contained in TRIPS Article 31(f) that states that exports under a compulsory licence must be restricted to the non-predominant part of the authorized amount. However, paragraph 9 of the Decision explicitly states that it is without prejudice to existing flexibilities under the TRIPS Agreement, except with respect of paragraph 3(b) that sets out the new waiver. This means inter alia that neither Article 31(f), which still allows the non-predominant part of supply under a compulsory licence to be exported, nor Article 31 bis , which incorporates the first waivers given of Article 31(f), are superseded by this Ministerial Decision. Thus, these two options remain open, there being no restriction on products under Article 31 and pharmaceuticals, being the only products covered under Article 31 bis .

It is unclear why instead of further simplifying Article 31 bis , WTO Members chose to add a third option through this Decision on COVID-19 vaccines. The waiver of Article 31(f) contained in this Decision is qualified and is subject to several conditions, as is the case in Article 31 bis . The analysis below will try to throw light on how the Decision differs from existing two options from the perspective of developing country Members. This blog first sets out the features of the MC12 TRIPS Decision that are favourable, or at least neutral vis-à-vis the existing options, and then details those that are less favourable or even more restrictive than the existing options. No claim is made to comprehensiveness.

Features of the MC 12 TRIPS Decision that are favourable or neutral vis-à-vis existing options for compulsory licensing under TRIPS

Alternative instruments to grant use without authorization : It has been clarified in paragraph 2 of the Decision that the “law of a Member” referred to in the chapeau of Article 31 is not limited to legal provisions on compulsory licensing, but also includes other acts, such as executive orders, emergency decrees, and judicial or administrative orders. While use of such alternative instruments may not have been ruled out in Article 31 nor Article 31 bis , this appears to have been a useful clarification for some developing country Members.

No requirement of prior authorisation of right owner : Unlike in Article 31 bis, developing country Members that use this Decision need not require the proposed user in their jurisdictions to make efforts to obtain a voluntary licence under reasonable commercial terms within a reasonable period of time as set out in Article 31(b). In practice, Members implementing Article 31bis did have the flexibility to incorporate very short periods of time to try to obtain such licences.

Notifications required but different: The notification requirements to the WTO for developing country Members that use this Decision, either as importers or as exporters, are set out in its paragraph 5 and the corresponding footnote. Unlike in Article 31 bis , both sets of Members will have to notify the name and address of the authorized entity, the products for which the authorization has been granted and the duration of the authorization. In addition, the quantities for which the authorization has been granted and the countries to which the products are to be supplied must be notified (presumably by the exporting Member) as soon as possible after the information is available. However, unlike in Article 31 bis , importing country Members do not have to notify their intention to be importing Members, nor self-declare (if they are not least developed country Members) that they do not have manufacturing capacity to make these vaccines themselves.

No distinctive marking for exported COVID-19 vaccines: An important difference with Article 31 bis is that exporting developing country Members do not have to require exporters to specifically label or mark their products to distinguish them from originator products. Perhaps, this requirement was removed since there is now an absolute requirement on importing Members to prevent re-exportation (see below). Consequently, exporting country Members do not have to notify the WTO of the distinguishing features of their labelling and marking of COVID-19 vaccines. Since all manufacturers do have to mark and label their exports, the advantage gained may be debatable.

Features of the MC12 TRIPS Decision that are less favourable vis-à-vis existing options to export under a compulsory licence under TRIPS

Use limited to developing country Members : Unlike in Article 31 and Article 31 bis , only developing country Members of the WTO are eligible to use the Decision either as an importing or as an exporting Member. Indeed, developing country Members with existing capacity are encouraged in footnote 1 of the Decision to make a binding commitment not to avail themselves of the Decision. China’s statement in the General Council meeting on 10 May 2022 is taken as one such binding commitment. The reasoning behind this restriction – whether realistic or not – appears to be that since the goal of the proponents of the original waiver proposal (in IP/C/W/669 and its revision) was to encourage local manufacture in developing countries, the Decision should be used more by those that do not currently have manufacturing and export capacity for COVID-19 vaccines. The goal under Article 31 bis differed – it was to supply generic medicines under export compulsory licences to Member countries that lacked manufacturing capacity, irrespective of where these were manufactured.

Stricter obligation on re-exportation : Those developing country Members that do import under this Decision have a binding obligation to undertake all reasonable efforts to prevent the re-exportation of the products manufactured under this Decision. The Decision allows in footnote 3 that, “in exceptional circumstances”, such an importing Member may re-export COVID-19 vaccines to another developing country Member for humanitarian and not-for-profit purposes, as long as such transactions are notified to the TRIPS Council. In contrast, in the terms set out in in paragraph 3 of the Annex to the TRIPS Agreement, this same obligation was heavily negotiated and is qualified. Here importing Members are only obliged to take measures to prevent re-exportation when such measures are 1) reasonable, 2) within their means, 3) proportionate to their administrative capacities, and 4) proportionate to the risk of trade diversion.

No double remuneration exemption: Compulsory licences – whether issued in the exporting or importing country Members – are subject to adequate remuneration under Article 31(h). However, unlike paragraph 2 of Article 31 bis , which exempts the importing Member from paying remuneration once it has already been paid in the exporting country for the same products and quantities, this Decision makes no mention of this “no double remuneration” clause. This means that those importing developing country Members that use this Decision to import COVID-19 vaccines under a compulsory licence are not explicitly exempted under it from paying adequate remuneration, unlike under Article 31 bis . Since importing Members have to change domestic laws to be exempt from paying patent owners, legal certainty on this point is important.

New standard for remuneration: Deviating from language used in Article 31 bis where remuneration has to be based on the economic value of the authorisation to the importing Member, this Decision makes it optional to take into the account the humanitarian and not-for-profit purpose of the specific vaccine distribution programs aimed at “providing equitable access to COVID-19 vaccines in order to support manufacturers in eligible Members to produce and supply these vaccines at affordable prices for eligible Members.” (Emphasis added). Thus, a new standard of requiring a humanitarian, not-for-profit royalty rate, which results in both supporting local production in exporting developing countries as well as affordable prices in importing developing countries, is set in this Decision. It is unclear why footnote 4 was added since the paper referred to therein does not explain how such a balance could be found.

Ambiguity on test and other data protection : Paragraph 4 of the Decision states – as if it is a fact – that it is understood that TRIPS Article 39.3 does not prevent a developing country Member from enabling rapid approval for use of a Covid-19 vaccine produced under this Decision. Article 39.3 in TRIPS itself does not mandate regulatory data exclusivity and allows such data to be disclosed in public interest. Article 31 and Article 31 bis are silent about the relationship between the test data and compulsory licence provisions, giving Members the freedom to suspend any data exclusivity provisions in place to benefit the compulsory licensee. In any case, those Members that have introduced regulatory data exclusivity, pursuant to bilateral/plurilateral Free Trade Agreements, may have less flexibility unless those commitments are amended separately.

No special waiver for Regional Trade Agreements with majority LDC membership: Unlike the provision in paragraph 3 of Article 31 bis that was aimed at benefiting African countries in that they need not notify the WTO of use if it was within a RTA with majority membership of least developed countries, there is no corresponding provision in this Decision. This second waiver of Article 31(f) has never been used but was seen as valuable in those negotiations.

Limited duration of the Decision : Unlike in Article 31 or Article 31 bis where there are no time limits, developing country Members can issue authorisations under this Decision for a period of five years from the date of adoption of this Decision. This period could be extended by the General Council taking into account the “exceptional circumstances” of COVID-19 at that time. Presumably, a limited waiver was warranted for a time-limited pandemic. Even the proponents of the original waiver sought the duration of three years in IP/C/W/669/Rev.1, albeit for a much broader waiver of several TRIPS provisions. However, it is unclear whether the authorisations already issued by this date to private companies/third parties could continue to be valid beyond this date as there appears to be no time limit laid down for such authorisations, other than the logical limit up to patent expiry, just as in the case of Article 31 (except a generic requirement to rescind these once the purpose is met) or in Article 31 bis .

To conclude, this Decision includes provisions that, on the one hand, facilitate use without the authorisation of the right holder for the export/import of COVID-19 vaccines and, on the other hand, either includes those that are stricter or cause more legal uncertainty than the existing provisions, or ignores several existing provisions in Article 31 bis that are favourable for developing countries. Thus, it is legitimate to question whether, on balance, this Decision makes the terms and conditions of waiving Article 31(f) more or less favourable for developing country Members for the export and import of COVID-19 vaccines than those already available inter alia under Article 31(f) and 31 bis . Since these existing legal avenues for export under a compulsory licence remain open, it remains to be seen if the Decision will be acted upon by developing country Members. However, the clarification of points of legal uncertainty may need to be borne in mind when WTO negotiations, which are to be concluded within six months, begin on the inclusion of COVID-19-related diagnostics and therapeutics.

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TRIPS Waivers and Pharmaceutical Innovation

Blog Post by Chris Borges

Published March 15, 2023

By Christopher Borges

On June 22, 2022, the World Trade Organization (WTO) approved a waiver of intellectual property (IP) protections for COVID-19 vaccine patents, previously secured under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The WTO is currently considering expanding this waiver to include COVID-19 diagnostics and therapeutics in addition to vaccines. As the U.S. International Trade Commission (USITC) investigates the implications of this expansion, it is important to understand what this waiver is intended to accomplish, explore whether it will be effective in the short term, and examine the long run impacts on the bio-pharmaceutical innovation system.

What Is the TRIPS Agreement?

TRIPS refers to a WTO agreement incorporating obligations related to IP protection into the global rules-based trading system. Active since 1995, TRIPS requires most WTO members to adhere to minimum rules for the protection of IP — such as patents, copyrights, and trademarks — and enforce these commitments domestically. By agreeing to respect IP protections, member countries receive certain benefits in return. For example, TRIPS allows WTO members to make exceptions to patent rights so long as they are “limited” and do not violate the “normal” use of the patent. States often employ this provision to advance their science and technology base by allowing their researchers to use patented research tools and techniques.

Why Was There a Call to Waive TRIPS IP Protections for COVID-19 Vaccines?

Despite COVID-19 vaccines being the fastest developed vaccines in history, global access to these vaccines remains uneven. The United States first administered COVID-19 vaccines in December 2020, yet, per the University of Oxford, as of March 1st, 2023, only 28 percent of people in low-income countries have received at least one dose of a COVID-19 vaccine.

Most of the vaccines approved for use are developed by firms in the United States, Europe, China, and Russia, but the Western-made mRNA vaccines are the most effective and therefore the most in-demand vaccines on the market. The wealth of Western nations along with the geographic distribution of mRNA vaccine producers enabled them to reserve large vaccine supplies early in the pandemic, effectively shutting out lower-income countries. Low-income countries currently have a 28 percent vaccination rate, whereas the United States had vaccinated 28 percent of its population by March 23rd, 2021.

Citing this disparity, many developing nations called on the international community to waive TRIPS IP protections for COVID-19 vaccines, based on the notion that allowing any company to manufacture the vaccines will boost production and, ultimately, vaccinations. South Africa and India first proposed a TRIPS waiver for COVID-19 vaccines in October 2020, drawing considerable support from over 100 lower-income countries. High-income countries, however, were initially opposed to the waiver on the grounds that it would have an adverse effect on innovation, drug quality, and drug safety. Negotiations continued for nearly two-years until the waiver was ultimately agreed to, with high-income countries easing their objections once they were sufficiently supplied with vaccines.

What Does the COVID-19 Vaccine Waiver Do?

The COVID-19 vaccine waiver suspends certain requirements regarding the use of COVID-19 vaccine patents, such as ingredients and manufacturing processes. With this waiver, states can authorize domestic manufacturers to produce COVID-19 vaccines without the permission of the patent rights holder and, crucially, to export those vaccines to other countries.

The waiver was designed to be a short term action, taken as an emergency measure in the midst of a global pandemic. However, as implementing the waiver required all 164 WTO members to agree, it took nearly two years of deliberation to come to consensus. By the time WTO members agreed to the waiver in June 2022, the response to the pandemic had progressed considerably and over 12 billion vaccine doses had been administered.

Why Are There Calls to Expand the TRIPS Waiver?

The WTO is currently considering if the waiver should be expanded to include the production and supply of COVID-19 diagnostics and therapeutics. This would cover a broad category of products, including products utilized for diseases and conditions beyond COVID-19.

To date, the FDA has approved dozens of COVID-19 therapeutics. Oral antiviral treatments paxlovid and molnupiravir were quickly developed by Pfizer and Merck, respectively, and approved by the FDA in late 2021. Remsidivir, a therapeutic first developed in 2009 by Gilead Sciences, was repurposed to treat COVID-19 after studies concluded that it reduces the risk of hospitalization and death in high-risk patients by up to 87 percent.

The efficacy of these COVID-19 treatments prompted low-income countries and international organizations such as UNICEF to demand an expansion of the TRIPS waiver to include these drugs along with diagnostic tests. To continue combating COVID-19 — the World Health Organization (WHO) reported 70,000 new cases on March 1st — they assert that all medical tools must be made available to the fullest extent.

How Effective Is the TRIPS Waiver? How Effective Would the Expansion Be?

The COVID-19 TRIPS waiver has had minimal impact on overall vaccine access. As of the end of 2022, no country had declared intent to make use of the TRIPS waiver.

Global vaccine demand had plummeted by the time the TRIPS waiver was agreed to. In December 2022, the board of Gavi, a nonprofit that supplies vaccines to low- and middle-income countries voted to stop supplying COVID-19 vaccines to most nations due to lack of demand. This drop in demand indicates that the primary issue impeding vaccinations today is not lack of supply, but lack of distribution capacity. Administering COVID-19 vaccines across a population requires significant healthcare infrastructure which some developing countries lack , such as refrigeration to keep vaccines at low temperatures and a well-trained healthcare workforce. To increase global vaccination rates, efforts should focus on building healthcare infrastructure and distribution capacity, not facilitating additional vaccine production.

Currently, the supply of treatments to COVID-19 far outstrips demand as well. This is largely because secure IP rights have incentivized drug inventors to enter over 140 partnerships with manufacturers worldwide, boosting supply while transferring technology and tacit knowledge to these foreign firms. Secure IP rights assure companies that their inventions will not be stolen in the short-term, thereby allowing them to reveal their secrets and participate in these productive manufacturing partnerships. Expanding the TRIPS waiver to therapeutics would have little added benefit to access.

Further, expanding the TRIPS waiver to therapeutics will disincentivize the creation of new COVID-19 treatments. Biopharmaceutical research is expensive and risky — the R&D process for new drugs costs close to $1 billion on average, and only 12 percent of drugs which enter clinical trials are ultimately approved for use. Companies will simply not invest in creating new therapeutics if they will lose ownership of their IP should their huge and risky investment prove fruitful.

Can the COVID-19 TRIPS Waivers Damage the Biopharma Innovation Ecosystem?

IP rights advocates point out that undermining IP protections will weaken incentives for pharmaceutical companies to innovate. Bio-pharmaceutical research and development (R&D) costs are so high that private capital will not invest without the promise of exclusive rights on the output. While quick government action and spending in the early days of the pandemic accelerated the development of COVID-19 vaccines, the rapid response to COVID-19 was built on the long-term stability of IP protections.

For example, the science and technology behind mRNA vaccines, an essential tool in the fight against COVID-19, was supported over decades by both far-sighted government investment as well as through commercialization drawing on considerable private capital expecting a return. The success of mRNA vaccines was not a slam dunk, yet investors took the risk on the understanding that they would receive substantial returns should the technology prove effective. Throughout this long and risky R&D process, the secure and predictable assignment of property rights allowed universities, government labs, and large and small companies to cooperate effectively to develop mRNA vaccine technology, and, ultimately, deliver vaccines in record time.

By removing IP protections on COVID-19 vaccines and treatments, the WTO is weakening the incentives for companies to invest in financially risky technology in the future as, even if their venture is successful, they may lose IP protections which allow them to recoup their investment.

How Will the TRIPS Waivers Impact U.S. National Security?

Global trends such as climate change, urbanization, and rising meat consumption make future pandemics more likely. It is critical that the United States maintain a dynamic and innovative pharmaceutical industry to combat this threat.

Government action, in partnership with private industry, in the early days of the pandemic accelerated the rapid development and scale up of COVID-19 vaccines. Through a myriad of policies such as pre-ordering millions of vaccine doses, Operation Warp Speed expedited the development and roll-out of vaccines by months, saving thousands of lives.

While quick action played a key role in the overall response, however, a crucial lesson from COVID-19 is that waiting until a pandemic is declared to act will be too late. mRNA vaccine technology was developed over decades and sustained by a dynamic and innovative bio-pharmaceutical ecosystem that connects universities, government labs, and large and small firms in the industry. Because of this large body of pre-existing work, much of which was facilitated through the security and predictability afforded by IP protections, pharmaceutical companies were able to prototype COVID-19 vaccines within days of receiving the viral genome. Further, this ecosystem not only rapidly produced dozens of COVID-19 therapeutics, but also possessed an existing supply of drugs that proved effective in treating COVID-19. Without a long-standing healthy innovation ecosystem, this could not have happened.

TRIPS waivers undermine the U.S. pharmaceutical industry by degrading the IP protections which are essential to the pharmaceutical innovation ecosystem. Less innovation in the pharmaceutical industry means fewer vaccines and drugs in the future, leaving the United States and other nations less prepared for future pandemics and other health emergencies.

Christopher Borges is a research intern with the Renewing American Innovation project at the Center for Strategic and International Studies in Washington, D.C.

The Perspectives on Innovation Blog is produced by the Renewing American Innovation Project at the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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The Proposed TRIPS Compromise Risks Setting Several Bad Precedents

By James Love

On March 15, 2022, STAT published text of a proposed compromise at the World Trade Organization (WTO) to temporarily relax global standards for intellectual property for COVID-19. The original proposal tabled by India and South Africa in 2020 as IP/C/W/669 would have waived 40 articles of the WTO Trade Related Agreement on Intellectual Property Rights, known as the TRIPS.

The proposed compromise would allow for “the use of patented subject matter required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic, in accordance with the provisions of Article 31 of the Agreement, as clarified and waived.” In short, the compromise only waives a single 20-word paragraph in one article: the one dealing with exports under a non-voluntary authorization.

In general, there are no legal benefits to the proposal. Countries can already export a non-predominant share of vaccine production under the TRIPS agreement, with mechanisms that are broader regarding both exports and imports, available regardless of the technology, and permanent.

This note focuses on the practical risks the proposed agreement presents as a precedent.

In this compromise, there is a deliberate effort to create some ambiguity over what is “waived” and what is “clarified,” particularly for persons without technical expertise in the WTO’s TRIPS rules. I would put the provisions impacted by the text into two categories:

Provisions that restate existing TRIPS rules as they relate to Articles 31 (“Other Use Without Authorization of the Right Holder”) and 39 (which concerns “Protection of Undisclosed Information”).
Article 31.f of the TRIPS. The text waives this provision on exports under a non-voluntary authorization, subject to limitations on geography (eligible countries are defined as developing countries minus China), disease (COVID-19), technology (vaccines only), time (temporary, with the time period to be determined later), and conditions, including new obligations to list patents, notify the WTO and provide details of the use of the waiver, and obligations to prevent re-exportation of products, even when the exports would be lawful in the importing country .

I have discussed the problems with the obligation to list vaccine patents here , and described the waiver proposal as worse than four other existing exceptions in the TRIPS for exports here .

The risks the proposal presents are twofold, (1) the normalization of several TRIPS+ conditions on non-voluntary authorizations that collectively are restrictive, burdensome, and protectionist, and (2) the risk that the “clarifications” of existing flexibilities in the TRIPS are a special case, only for emergencies, COVID-19, vaccines, or this temporary mechanism.

Bad precedents from proposed limitations and conditions on non-voluntary authorizations

Requirement to list the specific patents . The new obligations for listing of patents were not included in the original TRIPS for good reason. The United States, the United Kingdom, and many other countries do not have this obligation in their government/Crown use statutes, and in the case of complex biomedical inventions, where patent landscapes are often subject to non-disclosure agreements, changing over time, and controversial as to their scope, relevance, and validity, it is a consequential and objectionable requirement. More on this topic here .

Notifications to the WTO. The requirement for detailed notifications to the WTO forces health authorities to engage Ministers of Trade and Foreign Affairs. This requirement can be a deal breaker in the many countries where different philosophies and missions clash, and where raising the authorization to a trade issue might increase the fear that non-voluntary authorizations have a global political cost.

Anti-diversion obligations . The anti-diversion obligations undermine legitimate parallel trade, when the products are otherwise legal in the importing country. Such obligations are unnecessary when a government is keen to acquire vaccines that are both affordable and scarce, and when the vaccine manufacturer has the ability to enforce intellectual property rights, if any, in importing countries. Article 6 of the TRIPS states that “the exhaustion of intellectual property rights” is left to “each Member free to establish its own regime for such exhaustion without challenge,” a topic that was front and center of the 1998 to 2001 litigation between drug companies and South Africa. The proposed compromise text, which only applies to developing countries, would be applied even when the compulsory license was used on a single input of vaccine. Vaccines are particularly vulnerable to infringement claims from third parties, such as the patent on use of biodegradable lipids that Alynlam claims is infringed by Moderna for its mRNA vaccine, and this would also be an issue if a compulsory license was granted for the patents on the CPG 1018 adjuvant that is used in the Baylor vaccines. If this becomes a precedent extended to treatments for cancer or other cases, it would more broadly undermine Article 6 of the TRIPS.

Geographic restrictions on both imports and exports . There are no restrictions on which countries can export under a compulsory license in the TRIPS agreement. The only restrictions on which countries can import in the TRIPS agreement are found in the amendment Article 31bis, which gives WTO members the option to “opt out” of the special 31bis mechanism as importers, either for emergencies or more generally. The proposed compromise is more restrictive than the TRIPS in that the only countries that can import or export are developing countries, less China. Any restrictions on exports during a pandemic are problematic, particularly when the biggest problem is the exact opposite, the blocking of exports of COVID-19 countermeasures. The geographic restrictions on imports in 31bis have been criticized as protectionist, because they prevent manufacturers from benefiting from economies of scale, which could mean they would have to charge higher prices or forego production altogether. It is unlikely that the current compromise proposal will even be utilized, if adopted, but the text is not unimportant if it further normalizes restrictions on the exports under a compulsory license to higher income countries, even when a product is not infringing in either country.

The notion that certain TRIPS flexibilities are exceptional to the COVID-19 crisis

There are several provisions in the proposed compromise which only restrain existing flexibilities in the TRIPS. For example, the proposal states that:

Governments can forgo prior negotiations with patent holders,
A country “may issue a single authorization to use the subject matter of multiple patents” for a vaccine,
Actions can be taken through legislative acts, executive orders, emergency decrees, and judicial or administrative orders,
Remuneration “can take account of the humanitarian and not-for-profit purpose of specific vaccine distribution program” and “existing good practices in instances of national emergencies, pandemics, or similar circumstances,” and
Nothing in Article 39.3 of the Agreement shall prevent a Member from taking measures necessary to enable the effectiveness of any authorization issued as per this Decision.

All of these clarifications of existing flexibilities in the TRIPS may provide the illusion of comfort for the COVID-19 pandemic, but they also run the risk of being later held out as an exception, not so much in a legal sense, but in a consequential political sense. One previous example of this occurring is from the first paragraph of the 2001 Doha Declaration on TRIPS and Public Health, which states, “We recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.” This clause is frequently used to claim that the access-expanding paragraphs 4 through 7 of the same declaration only applied to “HIV/AIDS, tuberculosis, malaria and other epidemics,” including the paragraph 5 “clarifications” of flexibilities in compulsory licensing and parallel trade.

Concluding comments

It is possible that there will be no actual COVID-19 vaccine cases where the proposed compromise will be useful at all, given its temporary nature, the existing flexibilities in the TRIPS, and the superior alternatives already available for exporting under a compulsory license. That said, the proposal introduces precedents that will be used to justify further narrowing of TRIPS flexibilities, and risks that the most neutral clarifications of existing flexibility will be spun by drug companies and their advocates in producing countries as special, rather than general, and not be used outside of an emergency or COVID-19, or for anything other than vaccine.

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TRIPS Waiver

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) sets out minimum standards all member states of the World Trade Organization (WTO) must provide to protect intellectual property rights on novel innovations. In order to enhance global, equal access to medical products against Covid-19, in October 2020, the governments of India and South Africa proposed a so-called TRIPS Waiver.

The objective of this original TRIPS Waiver proposal was to ensure that certain obligations of the member states to protect intellectual property on Covid-19 related innovations, would be temporarily removed upon adoption by the WTO. Through this ceding of important intellectual property barriers, pharmaceutical companies that do not hold the patent rights can be allowed to use, produce and sell Covid-19 related innovations too – without fear of legal repercussions.

The proposal provoked both support and opposition. That it was also received with considerable acclaim is evident, as 65 WTO member states were co-sponsors while 105 other members expressed support. The opposition mainly came from the pharmaceutical industry and higher-income countries, where access has been significantly less of a problem due to their financial power and the residence of pharmaceutical companies within their territories.

The conflicting views resulted in a long time of discussions and negotiations. Finally, on 17 June 2022, during the 12th WTO Ministerial Conference (MC12), the Ministerial decision on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, aka the TRIPS Waiver, was a fact.

The decision entails a strongly watered-down version of the original TRIPS Waiver drafted by India and South Africa. It only covers vaccines and no other Covid-19 related medical products. This will be up for reconsideration within six months after the decision. Instead of the originally proposed waiving of 35 TRIPS provisions, the decision only waves one provision, Article 31 (f), allowing the export of vaccines under a compulsory license. Lastly, the duration of the decision is limited to five years.

Has resparked the discussion on what level of intellectual property protection is desirable for medical products in health crises.
The discussions at WTO level can be considered as a recognition of inadequacy of TRIPS in pursuing affordable access for all.
WTO decision could accelerate up-scaling of global production capacity of Covid-19 vaccines in countries experiencing intellectual property barriers and (plan to) produce vaccines for domestic use and export most of them.
WTO decision does not stimulate structural change.
WTO decision does not address transfer of know-how and technology needed to safely and effectively scale-up production in the fastest way possible.
WTO decision is limited to vaccines and thus does not include other key medical products, such as treatments and diagnostics.
WTO decision is not a proper recognition of intellectual property rights as a barrier for increased production capacity of key medical products.
WTO decision can be considered as a prioritisation of economical interests of high-income countries over global health equity.
There is a risk that the decision will function as blueprint for pandemic accord negotiations, compromising meaningful provisions to achieve equitable access to medical products in future frameworks.
Free Trade Agreements some countries have concluded, may hinder the full impact of the WTO decision.

The entire TRIPS Waiver negotiation process was a manifestation of shared dissatisfaction with TRIPS. As such, the negotiations provided fertile ground to rethink the agreement in light of access to health innovations.

However, the result of the negotiations is nowhere near the objectives determined by India and South Africa. The WTO decision barely waives provisions and merely repeats or clarifies existing options for overriding patents by compulsory licensing. It neglects essential aspects for improved access to medical products, has a limited duration (five years) and only covers vaccines and no other key medical products.

Another important aspect to note is that solely addressing patents is not enough. To be able to manufacture and market (for instance) vaccines, with assured quality built in, it is a neccessity to acquire much more information than included in patents. Information on processes, machineries, quality contol standards, etc. is vital to assure products that meet safety and effectivity requirements and have them marketed timely. This requires transfer of technology and know-how, but this is rather difficult to enforce (through, for example, compulsory licensing or waiving TRIPS provisions) and is likely to be more effective on a voluntary basis.

The WTO decision shows that commercial interests of high-income countries have prevailed over the objective to support equitable access to Covid-19 innovations. The initial proposal by India and South-Africa aimed at improving the power imbalance between governments and pharmaceutical companies, but also between high-income countries and low- and middle-income countries. The WTO decision does not contribute in any substantial way to either goal.

Nonetheless, some national governments are expected to may benefit from the WTO decision. Among them are those that are confronted with existing or potential intellectual property barriers, which are (planning on) producing vaccines for domestic use and export the majority of them. It would be highly beneficial to expand the scope of the decision to diagnostics and therapeutics too.

Text of the WTO decision (June 2022)

Devex article ‘WTO finally agrees on a TRIPS deal. But not everyone is happy’

Text of the first proposal for the TRIPS Waiver (October 2020)

Text of the revised proposal for the TRIPS Waiver (May 2021)

VIEWPOINT Protecting Public Health through Technology Transfer: The Unfulfilled Promise of the TRIPS Agreement

Volume 24/2, December 2022, pp. 211-214 | PDF

Ellen ‘t Hoen

The scrambling for access to COVID-19 vaccines by developing countries has reignited the debate on the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and its effects on public health and health-related rights.

In such debates, the TRIPS Agreement is often cast as “the big evil.” There is no denying that when the TRIPS Agreement was adopted in 1995, it ushered in intellectual property (IP) norms and standards derived from wealthy nations with robust industries. These norms and standards were suitable to expand the global protection of the IP assets of these industries. However, TRIPS was ill-suited to the needs of developing and least-developed nations, representing the majority of the WTO’s membership. In 2002, the World Bank estimated that the implementation of the TRIPS Agreement by developing countries would amount to more than US$20 billion in income transfers from developing countries to technology-creating nations—particularly the United States, Germany, and France. [1] The promised trade-off from the TRIPS Agreement was that the higher levels of IP protection would lead to technology transfers from high-income to lower-income countries and that the benefits of this technology transfer, creating research and industrial activities in lower-income countries, would outweigh the cost of expanded levels of IP protection. Article 66.2 of the TRIPS Agreement stipulates that high-income countries “shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country Members in order to enable them to create a sound and viable technological base.”

Disputes around access to HIV medicines in the late nineties and early 2000 first called the TRIPS promise into question: medicines were accessible in wealthy countries, but IP protection meant that treatment prices were often several times the per capita income if they were available at all in the lower-income countries hardest hit by the disease. It was not until patent barriers were cleared away that low-cost generic medicines became widely available where they were needed most. More recently, the unsuccessful attempts by vaccine producers—most of them in developing countries—to access the intellectual property, manufacturing know-how, and technology needed to produce COVID-19 vaccines may have confirmed the view that the TRIPS Agreement primarily serves the rich to the detriment of the poor. [2]

The right to health, including access to medicines and vaccines, is firmly rooted in international human rights law and some domestic constitutional law. [3] However, this right is hard to realize and enforce when medicines and vaccines are predominantly available from private corporations that hold monopoly rights to those products. As a result, those companies determine when, where, and at what price the products are made available.

While this is the reality of today, the stated objective of the TRIPS Agreement in fact focuses on creating societal benefits for all and supporting the transfer of technologies. In particular, articles 7 and 8, which lay out the objectives and principles of the TRIPS Agreement, deserve more attention.

Article 7 acknowledges that the protection and enforcement of IP should benefit society as a whole, not only rights holders. It describes the IP system as a social policy tool rather than a means to gather and hold on to assets. It refers explicitly to technology transfer and dissemination of technology. Article 8 acknowledges countries’ rights to take measures to protect the public interest and specifically public health. It further states that measures may be needed to prevent abuse by IP holders and to prevent practices that restrain trade or adversely affect technology transfer.

The Doha Declaration on the TRIPS Agreement and Public Health, adopted by the WTO Ministerial Conference in 2001, confirmed this right and spotlighted compulsory licensing (the authorization to use patents without the consent of the patent holder against an adequate remuneration) to ensure access to medicines for all, further strengthening the hand of governments to intervene when patents are a barrier to accessing medical products. [4]

While TRIPS articles 7 and 8 and the Doha Declaration do not explicitly refer to human rights, they are crucial provisions for the realization of the right to health. [5] For example, the Doha Declaration states that the TRIPS 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.” This paragraph echoes article 12 of the International Covenant on Economic, Social and Cultural Rights, which requires that states take steps necessary for the full realization of the right to health. The importance of taking the Doha Declaration into account when interpreting the TRIPS Agreement was confirmed by a WTO panel in the Australia – Tobacco Plain Packaging case. [6] This ruling offered important encouragement for pro-public health interpretation and implementation of the TRIPS Agreement.

The TRIPS Agreement provides ample scope for WTO members to intervene in private IP rights on public interest grounds, to protect public health, or to respond to an emergency in international relations such as a pandemic. [7]

In the past, countries have resorted to compulsory licensing, including government use of patents, to allow the supply of generic antiretroviral medicines for the treatment of HIV. Since 2001, the TRIPS Flexibilities Database—a resource that tracks when TRIPS flexibilities are proposed or executed—has documented 80 instances of compulsory licensing for public health in 43 countries. [8] Thirty-four least-developed country (LDC) members of the WTO have used the special provision for LDCs that allows them not to grant or enforce pharmaceutical product patents. [9] The WTO has 35 LDC members.

In 2021, all of the 10 new instances of compulsory licenses concerned products to prevent or treat COVID-19. This underlines the value of being able to get around IP protection when public health is at risk. Of course, compulsory measures come into play only when voluntary measures are not sufficient, which was the case for COVID-19 vaccines. Collaboration with the World Health Organization’s COVID-19 Technology Access Pool, a voluntary mechanism for sharing IP related to pandemic countermeasures established in May 2020, was rejected by COVID-19 vaccine companies.

Compulsory licensing is also at the core of the WTO Ministerial Decision of June 17, 2022, on the TRIPS Agreement in the context of the COVID-19 pandemic, often referred to as “the TRIPS waiver.” [10] The decision reiterates members’ rights to authorize the use of the subject matter of patents needed for the production and supply of COVID-19 vaccines, without the consent of the patent holder. The decision further waives the TRIPS requirement that a compulsory license of vaccine technology be predominantly for the supply of the domestic market, so that equitable access can be achieved across countries. But since compulsory licensing extends only to patents and not to other forms of IP that are essential in vaccine production, such as manufacturing know-how, the utility of the decision for vaccines will likely be limited. Discussions are now ongoing at the WTO to extend the decision to COVID-19 therapeutics and diagnostics, which are more suitable technologies for compulsory licensing.

Tension between protecting IP and protecting the human right to health remains. The COVID-19 pandemic and the inability of developing-country manufacturers to obtain IP, know-how, and technology needed to produce COVID-19 vaccines through voluntary measures illustrates the need for a more forceful implementation of the measures the TRIPS Agreement offers to rebalance IP and human rights. If vaccine companies had agreed to collaborate with the COVID-19 Technology Access Pool to share IP, provide manufacturing know-how, regulatory information needed to obtain marketing authorization, and technical assistance, eligible producers in various countries would have been able to start producing and supplying COVID-19 vaccines. Instead, vaccines were first supplied within the wealthy nations that held the technology to produce them. The subsequent hoarding of vaccines by those nations might have cost a million lives. [11]

In 2015, the then United Nations Secretary-General Ban Ki-moon established the High-Level Panel on Innovation and Access to Health Technologies to “review and assess proposals and recommend solutions for remedying the policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health in the context of health technologies.” [12] The eight recommendations of the panel regarding the protection of intellectual property center around the use of TRIPS flexibilities, which can be implemented within the current TRIPS framework. However, the panel also warned against the pursuit of stricter levels of IP protection in bilateral and regional trade talks. Specifically, the panel recommended that countries refrain from demanding that their trading partners implement IP obligations that go beyond TRIPS. The recently leaked draft IP chapter of the UK-India free trade agreement is evidence that high-income countries continue to seek to erode TRIPS flexibilities implemented in national law. [13] The lack of transparency around such trade negotiations means that democratically crafted national legislation is changed in closed-door trade negotiations. Considering the important role of the Indian pharmaceutical industry in the supply of low-cost medicines, applying stricter IP rules that are not required under WTO law will have consequences far beyond India alone.

The panel further recommended that public financing for research should require that the research results be shared and that IP be licensed, including through patent pools, to promote technology transfer and enable broad access to innovations.

The pandemic treaty that is currently being negotiated at the World Health Organization is an opportunity to remind the international community about the objectives and principles underlying the TRIPS Agreement and to see them put into practice for more equitable management and sharing of IP, know-how, and knowledge needed for pandemic preparedness and response. In October 2021, Medicines Law & Policy held an expert working group meeting that formulated seven recommendations for the pandemic treaty that are consistent with international human rights law. [14] One of the recommendations is to mandate technology transfer for government-funded research and to incentivize or mandate it for privately funded research on pandemic countermeasures.

The lack of equity in access to COVID-19 vaccines makes us wonder what would have happened if governments had taken measures to ensure the sharing of health innovations and the knowledge needed to make them. The World Health Organization’s pandemic treaty negotiations offer a new opportunity to put technology transfer and sharing of IP at the heart of global pandemic preparedness and response for more equitable and rights-based access to medicines for all.

Ellen ‘t Hoen, PhD, is a lawyer and public health advocate with a focus on pharmaceutical and intellectual property policies, and director of Medicines Law & Policy, Amsterdam, the Netherlands.

Please address correspondence to the author. Email: [email protected].

Competing interests: None declared.

Copyright © 2022 ‘t Hoen. This is an open access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/4.0/), which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original authors and source are credited.

[1] World Bank, Global Economic Prospects and the Developing Countries (Washington, DC: World Bank, 2001) .

[2] G. Krikorian and E. Torreele, “We Cannot Win the Access to Medicines Struggle Using the Same Thinking That Causes the Chronic Access Crisis,” Health and Human Rights Journal 23/1 (2021).

[3] L. Forman, “‘Rights’ and Wrongs: What Utility for the Right to Health in Reforming Trade Rules on Medicines?,” Health and Human Rights Journal 10 (2008); K. Perehudoff, B. Toebes, and H. Hogerzeil, “Essential Medicines in National Constitutions: Progress since 2008,” Health and Human Rights Journal 18/1 (2016).

[4] Fourth WTO Ministerial Conference, Doha Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/2 (2001); E. ‘t Hoen, “TRIPS, Pharmaceutical Patents, and Access to Essential Medicines: A Long Way from Seattle to Doha,” Chicago Journal of International Law 3 (2002).

[5] C. Correa, “Interpreting the Flexibilities under the TRIPS Agreement,” South Centre Research Paper 132 (2021).

[6] T. Romero, “Public Health and Plain Packaging of Tobacco: An Intellectual Property Perspective,” South Centre Research Paper 108 (2020).

[7] Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1896 U.N.T.S. 299 (1994), arts. 27, 30, 31, 31bis, 44.2, 66, 73(b)iii; South Centre, “A Public Health Approach to Intellectual Property Rights: Public Health Related Flexibilities in the TRIPS Agreement,” https://ipaccessmeds.southcentre.int/wp-content/uploads/2018/12/Public-Health-Related-Flexibilities-in-the-TRIPS-Agreement.pdf; F. Abbott, “The TRIPS Agreement Article 73 Security Exceptions and the COVID-19 Pandemic,” South Centre Research Paper 116 (2020).

[8] Medicines Law & Policy, “The TRIPS Flexibilities Database, http://tripsflexibilities.medicineslawandpolicy.org; E. ‘t Hoen, J. Veraldi, B. Toebes, and H. Hogerzeil, “Medicine Procurement and the Use of Flexibilities in the Agreement on Trade-Related Aspects of Intellectual Property Rights, 2001–2016,” Bulletin of the World Health Organization 96/3 (2018).

[9] Fourth WTO Ministerial Conference (see note 4), para. 7.

[10] World Trade Organization, Ministerial Decision on the TRIPS Agreement (June 17, 2022).

[11] H. Ledford, “Covid Vaccine Hoarding Might Have Cost More Than a Million Lives,” Nature (November 2, 2022).

[12] United Nations, Report of the United Nations Secretary-General’s High-Level Panel on Access to Medicines: Promoting Innovation and Access to Health Technologies (New York: United Nations, 2016).

[13] Bilaterals.org, “UK-India FTA: Draft Intellectual Property Chapter” (April 2022), https://www.bilaterals.org/IMG/pdf/uk-india_fta_ip_chapter_dated_april_2022_68_.pdf.

[14] K. Perehudoff, E. ‘t Hoen, K. Mara, et al., “A Pandemic Treaty for Equitable Global Access to Medical Countermeasures: Seven Recommendations for Sharing Intellectual Property, Know-How and Technology,” BMJ Global Health 7/7 (2022).

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Covid-19: wto ministerial decision on trips agreement fails to set rules that could save lives.

Responding to today’s ministerial decision by the World Trade Organization (WTO) on the TRIPs Agreement, Tamaryn Nelson, Amnesty International’s Researcher on Economic, Social and Cultural Rights, said:

“More than two years into the Covid-19 pandemic and the WTO still hasn’t made the changes needed to ensure everyone has access to life-saving health products when they most need them. Under the terms of this decision, hundreds of millions of people in developing countries will likely continue to be denied access to many of these products.

“This decision is unlikely to make a significant difference in global access to Covid-19 vaccines right now. And the fact that the WTO decided to postpone by six months the decision around extending the agreement to cover diagnostics and therapeutics – at this stage of the pandemic – demonstrates how the WTO is out of step with reality.

“This decision is not only a hollow response to Covid-19, but it sends the message that intellectual property rights outweigh the rights to health and life. After more than 18 months of discussion, the WTO has missed an opportunity to use its power to set global trade rules that save lives, setting a worrying precedent for international cooperation in future public health emergencies.”

The WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement sets out minimum standards for many forms of intellectual property (IP), such as copyrights, trademarks, patents, undisclosed information (including trade secrets and test data) and anti-competitive practices.

As IP rights can create barriers to timely access to lifesaving health products the TRIPS Agreement includes safeguards known as “flexibilities” so states can amend their laws and take certain measures to address public health emergencies, such as issuing compulsory licenses that would allow a company to produce a lifesaving drug without following IP rules.

The Covid-19 pandemic has raised questions about whether the “flexibilities” are effective to address the world’s urgent needs, given that they usually apply on a country-by-country, case-by-case, and drug-by-drug basis and have onerous reporting requirements.

In October 2020, India and South Africa requested a temporary waiver (IP/C/W/669) to intellectual property protections that would allow countries to produce versions of Covid-19 products more easily. Despite receiving support from more than 100 countries, this draft has stalled due to opposition from a small number of wealthy states.

A new draft ministerial decision spearheaded by the WTO Director General (WT/MIN(22)/W/15) but largely based on proposals from the European Union, was discussed and eventually adopted at the WTO’s 12th Ministerial Conference (MC12) held from 12 to 17 June 2022. Rather than waive intellectual property protections, it provides some clarifications to current “flexibilities” and a narrow exception to an export restriction on Covid-19 vaccines for the duration of five years.

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The COVID-19 TRIPS Waiver and the WTO Ministerial Decision

Posted by Peter Yu | Jul 7, 2022 | Academic Resources , Coronavirus , Multilateral Fora

Author: Peter Yu

Abstract: In October 2020, India and South Africa submitted an unprecedented proposal to the WTO, calling for the partial suspension of the TRIPS Agreement to facilitate the “prevention, containment or treatment of COVID-19.” Although this proposal immediately received considerable support from other WTO members, civil society organizations and individual experts, it faced strong opposition from some developed countries—most notably the European Union, the United Kingdom, Switzerland and, to some extent, also the United States.

By December 2021, it was quite clear that the COVID-19 TRIPS waiver proposal would not receive enough support to achieve consensus within the WTO membership. Around that time, the European Union, India, South Africa and the United States, with the support of the WTO, launched quadrilateral consultations to find a compromise solution. The “Quad proposal” that was eventually developed through these high-level consultations became the blueprint from which WTO members developed a new ministerial decision at the Twelfth WTO Ministerial Conference in Geneva in June 2022. This decision allowed WTO members to manufacture COVID-19 vaccines—and, if subsequently approved, also other COVID-19 health products—without the authorization of the relevant patent holders.

This chapter traces the TRIPS waiver debate from the submission of the original proposal by India and South Africa in October 2020 to the final adoption of the Ministerial Decision on the TRIPS Agreement in June 2022. The chapter further evaluates the strengths and weaknesses of this newly adopted decision, comparing it with the earlier TRIPS waiver proposal. It concludes by offering suggestions for future actions that WTO members on both sides of the waiver debate could take to help combat the COVID-19 pandemic.

Citation: Yu, Peter K., The COVID-19 TRIPS Waiver and the WTO Ministerial Decision (June 30, 2022). IPR IN TIMES OF CRISIS: LESSONS LEARNED FROM THE COVID-19 PANDEMIC, Jens Schovsbo, ed., Edward Elgar Publishing, 2023, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4150090 or http://dx.doi.org/10.2139/ssrn.4150090

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