In a recent news piece, I argued that while I support the proposal from India, South Africa and other countries for a temporary waiver of TRIPS obligations, my assessment is that as a practical and political, matter, the negotiations over it would end up with a compulsory licensing solution. What would that solution look like?
In a previous post I discussed what the weaknesses were in the TRIPS Article 31 and 31bis system. In this post, I’m going to respond directly to that but in later posts I will also address what this would look like for also encouraging enabling compulsory licensing of copyrights and know-how/trade secrets related to COVID 19 vaccines and treatments.
The approach is governed by two principles:
- Ensuring that the rightholder is remunerated, reasonably and fairly within the constraints of ensuring the public health need is met
- Ensuring the fastest, smoothest, production and delivery of vaccines
Beginning with patents, the proposal would seek to temporarily suspend or amend the application of the following elements of Article 31 and 31bis. The proposed change is in italics.
- Article 31(a) – authorization of such use shall be considered on its individual merits;
- The application of this article should be suspended to allow for patents to be issued related to a product such as a vaccine, even where it involves multiple related or dependent patents. With respect to compensation, the government shall determine value based on the value of the final product and it shall be the responsibility of the patent holder to pay royalties for any dependent patents. A compulsory license can be issued to cover both the domestic and export market simultaneously.
- Article 31(b) – such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly;
- In accordance with the Doha Declaration on TRIPS and Public Health, each country shall be free to determine what constitutes a national emergency and how long it shall last but it shall, at a minimum, last to the extent to which all eligible persons in relevant countries have been immunized against COVID19.
- Article 31(f) – any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use;
- This article should be suspended to allow for the application of Article 31bis, again to the extent that the relevant elements of 31bis are suspended.
- Article 31bis2(b)(i) – only the amount necessary to meet the needs of the eligible importing Member(s) may be manufactured under the licence and the entirety of this production shall be exported to the Member(s) which has notified its needs to the Council for TRIPS
- This article should be suspended to allow firms that receive a compulsory license to produce as much as they can for both domestic use and for export in line with the identified needs of the relevant importing countries. Production can be aggregated to combine multiple orders from multiple countries AND firms should be able to stockpile production for future anticipated orders and needs in line.
- Article 31bis2(b)(ii) – products produced under the licence shall be clearly identified as being produced under the system through specific labelling or marking. Suppliers should distinguish such products through special packaging and/or special colouring/shaping of the products themselves, provided that such distinction is feasible and does not have a significant impact on price;
- This article should be suspended and such identification should only be made available on the relevant purchase orders, regulatory documents and customs forms, which shall be made accessible to patent holders upon request.
- Article 31bis2(b) (iii) before shipment begins, the licensee shall post on a website(7) the following information: the quantities being supplied to each destination as referred to in indent (i) above; and, the distinguishing features of the product(s) referred to in indent (ii) above;
- This article should be suspended and the relevant information should be made available on request from customs and regulatory bodies.
- Article 31bis(4). Members shall ensure the availability of effective legal means to prevent the importation into, and sale in, their territories of products produced under the system and diverted to their markets inconsistently with its provisions, using the means already required to be available under this Agreement. If any Member considers that such measures are proving insufficient for this purpose, the matter may be reviewed in the Council for TRIPS at the request of that Member.
- This article shall remain in operation but under no circumstances shall countries apply it to extending provisional or injunctive measures prior to a final determination of the legality of the importation in the original importing or exporting member.
- Article 31(g) – authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur. The competent authority shall have the authority to review, upon motivated request, the continued existence of these circumstances;
- This article shall be suspended, so that there is certainty for any issued compulsory license and to ensure a viable economic model.
- Article 31((i) – the legal validity of any decision relating to the authorization of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;
- This article shall not extend to availability of provisional or injunctive measures in either the importing or exporting countries prior to a final legal determination by that higher authority
- Article 31(j) – any decision relating to the remuneration provided in respect of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;
- This article shall not extend to availability of provisional or injunctive measures in either the importing or exporting countries prior to a final legal determination by that higher authority
The next post will discuss the trade secret and know-how aspects of compulsory licensing. We should note that the existence of the possibility of compulsory licensing, even at the patent level, will encourage voluntary licensing as well making it likelier that trade secrets and know within that framework.
Cite as Dalindyebo Shabalala “A Compulsory License Option for the COVID19 TRIPS Waiver” IP& (15 April 2021)
Technology, Sustainability & Human Rights 