Recently, a storm has been brewing among member states of the World Trade Organisation (WTO) as a result of inequalities in the sale and distribution of COVID-19 vaccines.
Amid growing calls for vaccine equity, there is increasing pressure to temporarily waive patents for COVID-19 vaccines and other COVID-19-related medical products. At the core of the discussion stands a proposal by South Africa and India to suspend the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for the duration of the COVID-19 pandemic. The United States, Canada, New Zealand and the European Patent Office have pledged support for the proposal. (1)
The rationale behind the proposal is that if patent rights were waived, vaccine production facilities could be established throughout the world, resulting in increased supply and expedited roll-out of vaccines. Therefore, the time taken to reach global immunity would be reduced, a benefit that far outweighs the costs of research and development incurred by the pharmaceutical industry in bringing the vaccines to market.
However, the counterargument is that South Africa and other developing nations can use the mechanisms that already exist in the TRIPS agreement – namely, those enabling the grant of compulsory licences – to overcome vaccine distribution challenges relating to IP rights.
TRIPS agreement and its interpretation
The WTO was established to regulate international trade between nations. The TRIPS agreement establishes multilateral and international standards for the protection and enforcement of IP rights, which exist to prevent:
- the abuse of IP rights;
- practices that unreasonably restrain trade; and
- practices that adversely affect the transfer of technology.
Intellectual property was previously accused of handicapping the fight against the AIDS pandemic. WTO member states subsequently decided that the TRIPS agreement could and should be interpreted and implemented in a manner that supports their rights to protect public health and, in particular, promote access to medicines for all.
WTO member states also agreed that all patent systems should provide for the grant of compulsory licences and that each country should be free to determine:
- the grounds on which such licences are justified; and
- what would constitute a national emergency or other circumstances of extreme urgency.
Relevant South African legislation
South Africa is fully compliant with the TRIPS agreement in this regard. Since 1997 the Patents Act has had compulsory licensing provisions to prevent the abuse of patent rights. The commissioner of patents may grant compulsory licences if the demand for the patented article in South Africa:
- is not being met to an adequate extent and with reasonable terms; or
- is being met by importation and the price charged by the patentee is excessive compared with the price charged in countries where the patented article is manufactured by the patentee.
South African legislation also permits ministers to use inventions for public purposes on conditions that are either agreed with the patentee or determined by the commissioner of patents after hearing the patentee following an application made by the minister. Such power must be exercised in compliance with the law and this often requires that the rights of one party be constrained for the public good. South African legislation provides a process by which the patentee’s rights can be weighed against the benefits.
However, it is thought that no applications have been made by the state for the grant of any compulsory licences or use rights for any COVID-19-related inventions. Instead, advocates of the proposal expect a blanket declaration of non-enforcement of all COVID-19-related intellectual property, with implications that are significant for private entities.
Uncertain ownership rights result in a reluctance to invest. If the IP rights of private pharmaceutical companies are declared broadly unenforceable, without carefully balancing the conflicting rights in each case, the question remains whether such companies would invest in devising solutions to combat the next health crisis.
For further information on this topic please contact Dina Biagio at Spoor & Fisher by telephone (+27 12 676 1111) or email (firstname.lastname@example.org). The Spoor & Fisher website can be accessed at www.spoor.com.
(1) For further information please see the Mirage News website.