The “Moral” Waiver of IP Protection For COVID Vaccines: Why The US Proposal Creates More Problems Than It Solves

By Jonathan H. Spadt & Andrew J. Koopman

This month, the Biden administration announced its support for a waiver of intellectual property (IP) protections relating to the production of COVID-19 vaccines.  Few would take issue with the purported goal of such a waiver—speeding access to these life-saving vaccines in nations still deep in the throes of this global pandemic, where demand for vaccines far outstrips their supply.  But in reality, the waiver proposal creates far more problems than it solves, raising disputes under international IP agreements while failing to address the more significant logistical and supply chain obstacles to vaccine access.

As a member of the World Trade Organization (WTO), the United States is party to the Agreement on Trade-Related Aspects of Intellectual Property Rights, called the TRIPS Agreement.  The TRIPS Agreement sets forth minimum requirements to which each member nation agrees with respect to the protection of intellectual property of other members.  Put another way, the TRIPS Agreement compels the US (and other members) to respect and protect the fundamental IP rights of entities of other member nations.  This being the case, the United States cannot implement a COVID-19 vaccine waiver on its own.  Any IP waiver would require broad support among the members of the TRIPS Agreement.

Such support is unlikely at best.  As one might expect, the proposed waiver has popularity among some nations with limited ability to produce or procure COVID-19 vaccines on a commercial or industrial level.  But many other WTO members, including among them the chief members of the European Union, have expressed great concern about the possibility and efficacy of a TRIPS waiver.  Only after the Biden administration’s announcement did the EU even support negotiation on a waiver proposal.  Then, largely as a diplomatic transatlantic outreach, the European Commission stated that it would support a TRIPS waiver discussion at the WTO, while maintaining clear reservations about a waiver’s potential for positive impact on global vaccine access.

At a European Council summit in Porto, Portugal earlier this month, top EU officials pushed back on Washington, expressing doubt that an IP waiver would result in short term increases in vaccine production or distribution.  European Council President Charles Michel stated: “On the intellectual property, we don’t think in the short term that it’s the magic bullet but we are ready to engage on this topic as soon as a concrete proposal will be put on the table.”  French President Emmanuel Macron was more direct, demanding instead that the United States and the U.K. take immediate steps to eliminate bans on the export of vaccines and vaccine supplies, and to donate existing excess supplies.  Macron decried the need for an IP waiver: “If we want to work quickly, today there isn’t one factory in the world that can’t produce doses for poor countries because of intellectual property.”  “The priority today is not intellectual property.  We would be lying to ourselves. It’s production.”

Other EU leaders agree.  “I don’t believe that the waiver of patents is a solution to provide vaccines for more people,” said German Chancellor Angela Merkel, who participated in the Porto summit by video.  “For me, the issue of [waiving] patent protection is not the path that will lead us to more vaccines and better vaccines.”  European Commission President Ursula von der Leyen was likewise critical of the proposed waiver, instead focusing on the impact of export limitations on global vaccine supply.  At the summit’s closing news conference, von der Leyen said: “The European Union is the pharmacy of the world and open to the world. Up to today in the European Union, 400 million doses of vaccines have been produced and 50 percent of them, 200 million doses, have been exported to 90 different countries in the world. So we invite others to do the same. This is the best way right now in the short term to approach the bottlenecks and the lack of vaccines worldwide.”  Belgian Prime Minister Alexander De Croo added, “As Europeans, we don’t need to be schooled. The U.S. hasn’t exported a single vaccine in the past six months. Europe is the one that’s been producing for itself and the rest of the world these past six months.”

The Biden administration’s support for a TRIPS vaccine waiver has received similar pushback at home.  Many intellectual property groups, including the American Intellectual Property Law Association (AIPLA), Intellectual Property Owners Association (IPO), the Licensing Executives Society, Inc. (LES USA-Canada), and the New York Intellectual Property Law Association (NYIPLA), have expressed clear opposition to the TRIPS waiver.  These organizations collectively assert that the waiver proposal discussed at the WTO is erroneous in its portrayal of IP as a barrier to the production of life saving technologies.  The reality, they assert, is that strong IP incentives and reliance have facilitated the effective and successful collaboration that led to the sift development of COVID-19 vaccines in the first place.

In a joint letter to United States Trade Representative Katherine Tai, these organizations noted that they “know of no data to suggest that patents and other IP rights are hindering vaccine development or delivery. The manufacturing of COVID vaccines is a complicated process. Poor quality vaccines being produced by underqualified manufacturers could have extreme negative consequences. We support the continued efforts of vaccine manufacturers to identify, and engage with, new potential partners in order to create even more manufacturing capacity that can increase the availability of, and access to, high-quality vaccines.”  The organizations likewise expressed concern over a negative impact on future vaccine development: “should the proposed TRIPS waiver be implemented, it would have an immediate chilling effect on their continued research and collaboration needed to overcome, for example, new variants of the virus, to create vaccines for children, and to develop better delivery mechanisms.”

Nor is it even a foregone conclusion that the Biden administration has the power to authorize the proposed TRIPS waiver.  Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) has argued that, just as Congress ratified the United States’ entry into the WTO TRIPS Agreement, any waiver of the terms of that Agreement would similarly require an act of Congress.  Thus far, neither house of Congress has acted on any resolution that would relax US IP protections for COVID-19 vaccines.

The reservations expressed by European and US leaders reflect a combination of short term practical concerns and long term policy interests.  Most relevant to the goal of the waiver is the notion that IP restrictions, rather than export controls or logistical factors, represent the primary barrier to vaccine distribution.  At this point, there is little evidence in support of this notion.  In the great majority of nations, no patents have yet issued that would interfere with the manufacture of vaccines.  Even were there such patents, the TRIPS Agreement already provides for the grant of compulsory licenses in the event of a national emergency.  That such a provision has not yet been invoked is itself a blow to the argument that vaccine patents are interfering with vaccine production.

The consensus opinion is that the primary obstacle to vaccine supply across the globe is distribution.  The short term problem of vaccine supply would be more directly remedied not by a waiver of IP rights, but by a willingness of nations with a vaccine surplus and manufacturing wherewithal to share their supply.  Indeed, the Biden administration recently announced that 20 million doses of currently authorized vaccines would be shipped overseas beginning in June, on top of an earlier pledge of 60 million doses of the AstraZeneca vaccine once authorized.  This commitment by the United States to ship 80 million doses overseas, presumably by the end of June, would be a more effective response to pressure from the EU than the Biden administration’s waiver support.

Not to be ignored in any discussion of short term effects is the potential impact a waiver would have on current vaccine manufacture.  Like any product, the manufacture of vaccines is contingent on the availability of raw materials, which are not unlimited in supply.  The waiver of IP rights would in principle substantially increase demand for these raw materials, resulting not only in higher prices but potential interference in the supply chain for established and proven vaccine manufacturers.  There is no guarantee that manufacturers entering the market on the back of a TRIPS waiver would have the ability to produce vaccines with the quality and throughput of current suppliers.

While it is easy to focus on the short term goals of getting vaccines to those in need, it is dangerous to do so without also considering the potential long term impacts of a TRIPS waiver.  Vaccine developers argue that the strong and predictable system of intellectual property protection established by the TRIPS Agreement has promoted the production of vaccines due to global collaboration among pharmaceutical developers.  Conversely, they argue that weakening those rights would not only disincentivize such development generally, but would make it more difficult for the type of collaboration that brought forth these COVID-19 vaccines.

Any waiver of IP protection would necessarily result in decreased certainty and dependability in the global intellectual property system.  Critical to the discussion of a TRIPS waiver is the notion that it is this very intellectual property system that contributed to the rapid development and rollout of COVID-19 vaccines in the first place.  Before there can be a debate on the acceptability of vaccine accessibility, there must exist the very vaccines which save lives in the first place.  The long term costs of an IP waiver are difficult to quantify, but could weigh very heavily against any potential benefits.

Further complicating the issue, it must be recognized that patent rights are not the only form of intellectual property implicated by the proposed TRIPS waiver.  Vaccine production relies just as much on manufacturing know-how, closely held by the companies involved as valuable trade secrets.  Even were other manufacturers free from patent obligations, and in possession of the requisite raw materials, there is no guarantee that all but a few could effectively and safely produce vaccines at levels exceeding the rates currently being manufactured.  The United States has already seen high profile cases of vaccine spoilage, such as the loss of approximately 15 million doses of Johnson and Johnson’s vaccine at a facility operated by Emergent BioSolutions.  It is not difficult to envision additional or more significant losses were vaccine manufacturing opened up to companies with less experience or oversight.

Compelling a waiver of trade secret knowledge would also be an issue of incredible concern.  While patent rights are necessarily limited in time, and frequently compensated through the payment of monetary damages, the same cannot be said of trade secrets.  A trade secret derives its value from not being publicly known—compelling disclosure of a vaccine manufacturer’s trade secret would destroy the value of that intellectual property forever.  Moreover, the know-how associated with manufacturing COVID-19 vaccines is not even necessarily limited to the current pandemic.  Indeed, the trade secrets relied on to safely develop and manufacture COVID-19 vaccines would be expected to extend beyond these vaccines themselves, potentially impacting numerous unrelated pharmaceutical products.  A waiver of such intellectual property rights could have devastating effects on the companies involved.

Supporters of an IP waiver for COVID-19 vaccines undoubtedly have their heart in the right place.  And the importance of distributing these vaccines efficiently and safely cannot be overstated.  But those involved in vaccine distribution look at vaccine export and supply chain hurdles as the chief obstacles to global vaccine distribution, not IP.  Simply put, there is a fundamental lack of evidence that the suspension of IP rights would result in any immediate benefit.  In fact, the opposite may even be true—a reduction in availability and distribution of safe vaccines.  And in terms of a long term impact, there is almost nothing to support the idea that a waiver would increase the likelihood of accelerating the development or production of future vaccines, be it to treat COVID variants or any other health crisis.  The United States’ promotion of such a significant change in policy should be contingent on an evidence-based, compelling, and clear benefit.  Not only is there an apparent lack of such a benefit, but there are instead compelling reasons to maintain the IP protections afforded under the TRIPS Agreement.

As it stands, if the EU rejects the notion that an IP waiver will result in any short or medium term increase in vaccine access, it seems unlikely that waiver proponents will find the support needed for a TRIPS waiver in the coming months.  By then, perhaps the United States and other national vaccine suppliers will have taken more effective action to promote a global rollout of COVID-19 vaccines.

About RatnerPrestia

RatnerPrestia is a law firm expert in all things IP. The Firm handles procurement, enforcement, licensing, commercialization, global strategic IP planning, and all related business aspects of IP. The Firm has attorneys experienced and successful in all relevant U.S. jurisdictions, including the U.S. Patent and Trademark Office, The U.S. International Trade Commission and Federal Courts, both trial and appellate. This expertise extends to all areas of IP protection, including patent, design, copyright, software, trademark, and trade secret protection.

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