At the 12th WTO Ministerial Conference (MC12), trade ministers adopted the Ministerial Decision on the TRIPS Agreement, which confirms the right of members over the next five years to override the exclusive effect of patents and provide greater scope to take direct action to diversify production of COVID-19 vaccines through clarifications of existing flexibilities and a targeted waiver.
The Decision also contains a commitment that, no later than six months from the date of its adoption (17 June), members will decide on its possible extension to cover the production and supply of COVID-19 diagnostics and therapeutics.
Ambassador Gberie invited delegations with concrete positions on what the TRIPS Council should decide to submit and circulate in writing text-based proposals (position papers, outlines, detailed drafts, or fully formulated decisions) so that these documents contribute to guiding the discussion.
The chair reported he had established a schedule of meetings aiming at helping members find convergence. Three additional rounds of informal discussion at the TRIPS Council are being convened on 2 November, 16 November and 6 December, with the possibility of calling members for another meeting on 15 December, two days before the deadline. In the meantime, this agenda item of the TRIPS Council will remain open in order to resume in formal mode before the 17 December deadline to potentially take a decision.
Ambassador Gberie said he was encouraged by the engagement and the efforts made by delegations in the meetings and consultations held since the previous formal TRIPS Council on 6 July, where members formulated questions and provided detailed responses, but noted that time is passing quickly and, therefore, members will have to focus on concrete steps very soon.
If upcoming discussions do not translate into concrete text-based options, a more intense consultative process could be established to drive the process forward, said the chair.
A total of 29 members took the floor on this issue to welcome the successful outcome at MC12 as proof that WTO members can bridge differences and collaborate to respond to the most urgent health challenges of our time. In the discussions, three different approaches emerged.
A group of developing and least-developed country (LDC) members who support an extension of the Decision to cover COVID-19 diagnostics and therapeutics favoured a blanket approach of the extension to therapeutics and diagnostics and stressed that the current COVID-19 IP waiver decision should be adopted “as is” without adding any further language or definition which would imply new negotiations.
These members emphasized that the pandemic is far from over and noted that equitable access to therapeutics and diagnostics is critical in helping detect new COVID-19 cases and variants. These delegations said that this extension is more urgent than ever, as many least developed countries (LDCs) lack access to life-saving drugs and testing therapeutics.
A group of developing and developed members expressed their readiness to advance the discussions but insisted on seeing evidence of where and how intellectual property (IP) constitutes a barrier to access to therapeutics and diagnostics before considering an extension. These members 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.
Some of these members reported they were in the process of conducting domestic consultations and gathering information on the use of COVID-19 diagnostics and therapeutics, as well as on other related issues, such as supply, production, demand, and distribution of these products.
A third group saw merit in engaging in a discussion about including a definition on what constitutes therapeutics and diagnostics, or establishing a list of the products that would be covered by such an extension. These members questioned whether such a definition would be in accordance with the national legislation of each member and asked for clarity on what the approach would be with regard to double-use products, given that some COVID-19 diagnostics are also used to diagnose influenza.
In its capacity as an observer, the World Health Organization (WHO) asked WTO members to ensure coherence in addressing public health concerns. Underlining that not only vaccines are important to fight the pandemic, WHO stressed that the “test and treat” strategy is vital for the response to COVID-19 and noted that many developing countries and LDCs are facing challenges to access affordable diagnostics.
The WHO referred to the successful trilateral cooperation with the World Intellectual Property Organization (WIPO) and WTO aimed at strengthening the capacity of policymakers and experts in the organizations' members and in WTO accession candidates to address the pandemic and to achieve equitable access to COVID-19 health technologies.
During the TRIPS Council meeting, the three organization announced they will hold a joint virtual workshop on 28 October on “Innovation and access to diagnostics for COVID-19 and beyond”. The event will be the third in the series of trilateral workshops which the Directors-General of the WHO, WIPO and the WTO have organized within the existing collaboration framework.
Under the agenda item on IP and COVID-19, members expressed their readiness to continue exchanges so that the TRIPS Council can keep abreast of new IP measures in relation to COVID-19 and share relevant experiences.
Exchanges will continue to take place on the basis of the updated Secretariat compilation of COVID-19 related IP measures and any proposals submitted within the context of paragraph 24 of the Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics. The Declaration mandates the TRIPS Council to continue or initiate work to analyse lessons learned and challenges experienced during the pandemic, including on the basis of proposals submitted by members.
The TRIPS Council will also look at communications from members submitted under paragraph 5 of the MC12 TRIPS Decision. This paragraph requires members “to communicate to the Council for TRIPS any measure related to the implementation of this Decision, including the granting of an authorization” as soon as possible after the adoption of the measure.
The WTO Secretariat informed members that no communications under paragraph 5 of the Ministerial Decision have been received to date.
IP and innovation: Finance for start-ups
Under an agenda item on IP and Innovation requested by Australia, Canada, Chile, the European Union, Japan, Singapore, Switzerland, Chinese Taipei, the United Kingdom and the United States, the co-sponsors presented their new submission with a focus on the role of IP in raising finance for start-ups (IP/C/W/692, circulated on 29 September).
The co-sponsors highlighted in their paper that the first step in the innovation process — having a good idea, developing an innovative product and then protecting the IP — is often easier than the second step — raising the funds necessary to bring the invention to market, particularly for young inventors and start-ups. A well-managed IP portfolio can greatly help innovators overcome this challenge as it signals to potential investors that there is substantial value in the new project. These young companies obtain more funds and grow faster than those without intellectual property.
In addition to protecting intellectual assets from “free riders,” IP rights can be a useful means of raising money, especially for start-ups, the paper noted Furthermore, IP can be used as leverage or collateral for borrowing, or for sale to prospective buyers through sale-leaseback transactions.
In guiding the discussion, co-proponents posed a series of questions to find out where in the respective jurisdictions do start-ups obtain the funds they need in order to expand and open up new business areas. Members shared experiences on the use by start-ups of IP financing, what kind of entities (angel investors, banks venture capitalists or other sources) get involved in IP financing and debt finance, and what are the key challenges or deficiencies concerning the IP role in start-up financing.
Members welcomed the discussion, with some of them sharing their domestic challenges and practices.
Technical cooperation and capacity building
Following the chair's call in July for members to submit information on their activities in technical cooperation and capacity building as well as incentives for technology transfer to LDCs in preparation for the end-of-year annual review, the Council received information from Switzerland, New Zealand, Australia, Norway, Japan, the United Kingdom, Canada, the United States and the European Union.
The following intergovernmental organizations also submitted updated information: UNCTAD, the Gulf Co-operation Council (GCC), WHO, the World Customs Organization (WCO) and WIPO. Updated information on the WTO Secretariat's own technical cooperation activities in the TRIPS area can be found in document IP/C/R/TC/WTO-OMC/3.
Members were encouraged to use the online submission system (e-TRIPS) to make submissions.
Special Compulsory Licensing System
In relation to the status of acceptances of the Amendment of the TRIPS Agreement, the chair recalled that the current period for accepting the amendment runs until 31 December 2023. To date, 136 WTO members have accepted the amended TRIPS Agreement. Ambassador Gberie encouraged the remaining 28 members to complete their domestic procedures and deposit their instrument of acceptance with WTO Director-General Ngozi Okonjo-Iweala as soon as possible.
The TRIPS Amendment entered into force on 23 January 2017, securing for developing countries a legal pathway to more easily access affordable medicines in line with WTO rules.
Members agreed on the dates of the formal TRIPS Council meetings in 2023: 16-17 March, 14-15 June 2022, and 9-10 October 2023.
The Secretariat is once again planning to hold the “Workshop on the implementation of Article 66.2 of the TRIPS Agreement: Incentives for technology transfer to least-developed countries (LDCs)” in March 2023, back-to-back with the first TRIPS Council meeting of the year.