Developing bloc should initiate talks to reform IPR regime

South Africa and India, leading a group of 100 countries, have been jointly communicating with the WTO for a waiver from TRIPS agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) since October 2 last year. While many developed countries continue to oppose this, the Government of India (GOI) is optimistic about the waiver. Still, any intervention, in favour of temporary TRIPS waiver is misplaced.

Put simply, this is the reason why the developing bloc should look forward to learning from some of their own positions, which are sufficiently helpful to understand and resolve this dilemma. Take Cipla v Bayer in the Delhi High Court, for instance. In 2008, India granted Bayer a patent for ‘Sorafenib tosylate’, marketed and manufactured as Nexavar by Bayer. Cipla wanted a licence for a generic version of the patented drug which Bayer challenged in the court, interpreting the terminology of ‘spurious drugs’ differently.

Bayer also wanted the court to legislate patent-linkage regime, but the court, without mincing words, noted in the historic judgement that it would undermine “Bolar/Early Working” and violate Article 27 of TRIPS, which, if not taken into consideration, also would give rise to—among many other problems—the patent rights policing that is enforceable only by publicly funded statutory authorities. The court further dismissed Bayer’s application with costs, observing that these tactics could derail independent applications of other players (here, Cipla).

Novartis AG v Union of India in the Supreme Court of India presents an interesting example of interpretation of TRIPS by a developing nation. With reference to India’s commitment to the TRIPS, Novartis challenged the constitutionality of the Section 3(d) of Indian Patents Act (IPA), 1970.

The contention here was: Whether any change in bioavailability does necessarily improve the therapeutic efficacy. In this case, there was no concrete research data available, so the court held that, in the absence of new evidence to justify superior reactivity, there was no question of extraordinary rights for the manufacturer. Though it had been argued that Section 3(d) is far too vague, the Novartis case offered a clear-cut answer. Besides, Article 21 of the TRIPS also conditionally allows members to “determine conditions on the licensing.” Further, it's important to note that Section 53 of the IPA inherently opposes the evergreening of the patent in India.

As IPA, under Section 92, describes special provisions, including circumstances of national emergency, or extreme urgency, or in case of public non-commercial use including public health crises, for compulsory licences on notifications by the GOI. Also, that Doha Declaration on TRIPS and Public Health, many commentators emphasise, seems to have the potential to challenge the monopoly of the pharmaceutical corporations.

Solution to this problem is not that simple.

Some are of the opinion that Article 31 of the TRIPS permits the use without authorisation of the right holder which may also be waived in the case of a national emergency, and for public non-commercial use.

But this should be read with Article 30 that clearly mentions that exceptions should not harm "legitimate interests" of the patent owner. For instance, the case of compulsory licensing for the use of Canadian HIV-drug TriAvir in Rwanda clearly tells us the messy nature of this pathway. Manufacturer Apotex concluded that the mechanism should be changed for an efficient implementation. This, along with a limited market for specific drugs, alienated generic manufacturers, the fact notwithstanding high diplomatic costs to convince countries to notify drugs under WTO rules.

Yet there is a catch-22 situation here: the political side of this problem cannot be neglected, for this could provoke retaliatory actions, for instance, in the form of withdrawal of products from the market.

For instance, when Brazil, using TRIPS, tried to pressurise US pharmaceutical companies to fall in line with the internal regulations, US approached WTO “challenging the legality of local working requirements under TRIPS"— this serves as a "balancing mechanism".

And, most recently, the Biden Administration, by invoking the US Defence Production Act, a wartime production law, jeopardised the global supply chain of materials, including cell culture media and single-use tubing assemblies, required for vaccine production, thus, affecting Serum Institute of India (SII), world’s largest vaccine manufacturer, among others.

Advantages of TRIPS flexibilities such as compulsory licensing may also offer few disadvantages: the joint proposal of South Africa and India has rightfully expressed concerns of “countries with insufficient or no manufacturing capacity” regarding the requirements of “Article 31b and consequently the cumbersome and lengthy process for the import and export of pharmaceutical products.”

It is now easy to understand that all developing countries do not have enough resources to utilise flexibility within the TRIPS Agreement and risk arousing wrath of hegemons. As the inherent flaws of developing countries—inefficient courts, understaffed bureaucracies and ill-equipped pharma industries—are very much the parts of the problem.

Soumya Swaminathan, Chief Scientist at the World Health Organisation (WHO), like many other scientists, is very hopeful about Covax. However, huge donor contributions and pledges for the global vaccine facility, for instance Covax, will be of no value if the vaccine supplier, here SII, is constrained by inaction of developed countries that has led to supply chain disruption, of which Intellectual Property (IP) regime, of course, is a major component. Swaminathan recently recounted, "30 years for hepatitis B vaccines to get to developing countries," perhaps rightly so. As a result, the whole affair becomes the epitome of hypocrisy. The politico-economic conundrum that the Intellectual Property Rights have exceptionally become in the pharmaceutical industry, demands a solution that is feasible—both politically and economically.

Covid-19 presents a huge opportunity for the developing bloc to find a longer-term solution to the TRIPS dilemma at the 12th WTO Ministerial. It is time for developed countries to finally acknowledge their privilege and recognise the insecurities of developing countries. The cost of the failed Doha Round is a fact. But can there be ‘Planet B’? So why is this ‘Plan B’ of dehumanisation?

(The writer researches and writes on socioeconomic inequality and human rights issues)