Waivers and Covid-19 vaccines

Intellectual property rights for Covid-19 vaccines and treatment are in the limelight. The international battle for a waiver of intellectual property (IP) rights protections under the multi-lateral treaty TRIPS has been hotly debated. India and South Africa, supported by other low and middle-income countries, made proposals for a temporary waiver of intellectual property rights to enhance Covid-19 vaccines and treatment access. The USA was strongly opposed to such a waiver. However, very recently, the USA made a U-turn and is now in favour of the waiver. The contours of this waiver, the types of IP that it will cover, its length and breadth, and its ultimate formalisation through text-based negotiations are still some time away.

As many have observed, a waiver on patents or a compulsory license of patents, while welcome, at this point, may not serve Indian needs. Early on in the pandemic, Moderna released a statement saying that it would not enforce its patent. However, no company has been able to reverse engineer this vaccine and benefit from the patent waiver. While this may be because of the new mRNA technology used by Moderna, reverse engineering any vaccine is not straightforward. But with time, diffusion of knowledge and operation of the IP waiver, things may be different and more manufacturers may enter the market. However, the immediate need is to ensure that vaccine technology that has been procured through voluntary licenses is translated into vaccines.

The pandemic presents a very different market and a very different world. However, history on foreign technical collaborations and their essential ingredients act as a guiding light. According to the Reserve Bank of India (RBI), an Indian company that has entered into an agreement with a foreign entity for technology transfers, know-how transfer, use of patents and brand names has entered into a ‘foreign technical collaboration.’ Historical data has been compiled by the RBI on foreign technical collaborations (FTC) across sectors. The manufacturing industry, including chemicals, pharmaceuticals and machinery, have a significant share of foreign technical collaborations. Data indicates that foreign technical collaborations do not often involve using or transferring patents or other intellectual property. Instead, know-how is the most popular type of technology that is transferred to India. For example, between 2016 to 2018, know-how accounted for 64% of the transferred assets compared to patents that were only 2.3%.

Historical FTC data also highlights that an overwhelming majority of such collaborations involved both technologies and a financial investment, i.e., both technical and financial collaboration. Pure technical collaborations appear to be rare – only 8 out of 334 companies surveyed, between 2016 to 2018, entered into pure technical collaborations. This data makes two things clear. First, foreign technical collaborations in India operate predominantly through know-how transfers. Second, such collaborations are a combination of both technical and financial collaborations.

Multiple Indian companies have reportedly signed licenses for various successful vaccine candidates, thereby entering into technical collaborations. While the terms of the licenses are not known, presumably all technology and know-how from the pharmaceutical aspect of the vaccine to accompanying technology and training material may be in the hands of Indian companies.

However, pure technical collaborations may not bear fruit since the trend is that technical collaborations are generally accompanied by significant financial collaborations. This is because translating technology into material products requires a substantial financial commitment. The benefits of IP waivers will not be immediate and may even be too little too late. While future benefits of such waivers are welcome, at least for now, companies, the government and international organizations should urgently focus on transparent and efficient financial commitments and collaborations to ramp up production and supply.

(The writer is a lawyer based in Bengaluru)