Latest WTO decision establishes a waiver to patent owner’s rights related to COVID-19 vaccines in developing countries

At the end of the 12^th Ministerial Conference (MC12) of the World Trade Organization (WTO) which took place last Friday (June 17^th), an important result was achieved which shall affect many stakeholders involved in the production of COVID-19 vaccines: a temporary suspension of patent owners’ exclusivity rights for COVID-19 vaccines in the WTO’s Least Developed Countries (LDC).

This decision does not specify the percentage of COVID-19 vaccine doses exported worldwide which would allow a member not to take advantage of the waiver, but it reinforces the possibility of those with existing vaccine export capabilities to opt out.

The ministerial draft decision which encompassed the mitigation of patent owners’ intellectual property rights (IPR) under the most important international treaty regarding intellectual property, the TRIPS Agreement (Trade- Related Aspects of Intellectual Property Rights), asserts that a member must authorize the use of patent-covered subject matter, as per TRIPS’ article 31, to produce and distribute COVID-19 vaccines in a large enough scale to address the pandemic. Such authorization does not require the patent owner’s consent and may occur through any legal instrument provided for in the LDC’s legal system.

At this moment there is not a clear limitation regarding what subject matter or technologies covered by patents would be reached by the waiver – at least not in the publicly available text. In a footnote, the draft provides that the patent’s subject matter must include “ingredients and processes necessary for the production of COVID-19 vaccines”.

It is important to note that, notwithstanding the fact that, as of now, this package approved in Geneva covers only COVID-19 vaccines, the decision has also established that WTO members must gather in, at maximum, 6 months counted from this decision, to decide on the extension of the approved measures to cover the production and supply of COVID-19 therapies and diagnoses.

Especially in regard to Brazil, a country that is a signatory of TRIPS and that provides for compulsory licenses in its legal system – allowing for a temporary limitation on the exclusivity right to utilize the patented process or product – it is expected  that the Executive Branch may not find it difficult to implement the WTO’s decision in national territory. Nevertheless, it is worth noting that the WTO’s decision sets forth a temporary suspension of IPR, which is more serious than a mere compulsory license.

The possibility of limiting patent owner’s IPR for medicines and vaccines, commonly known as “breaking patents”, has occupied the Brazilian political and economic landscape for decades, regaining its breath since the start of the COVID-19 pandemic. Remember that, in the context of the pandemic, there have been changes made to article 71 of the Law n. 9.279/96 (Brazilian Law of Industrial Property – LPI) which, in its current form, concerns compulsory licensing for the cases of national or international emergency or public interest, as long as the IPR owner does not voluntarily meet the public necessity in question.

It was also in the context of the COVID-19 pandemic and amidst pressure to bolster access to medicines that the Federal Supreme Court (STF) shortened the term for many patents related to pharmaceutical products and medical devices, through a court ruling issued within the Direct Plea of Unconstitutionality (ADI) n. 5529.

Regarding the geographic boundaries of the waiver, the WTO decision is clear in establishing that the territorial constraints were untangled, allowing for the measure to be authorized for beyond the internal market, allowing for goods produced during the validity of the waiver to be exported.

The WTO has also established that the humanitarian and non-profit purpose of vaccine distribution must be considered when determining an adequate amount of compensation for the IPR holders to ensure that producers in eligible countries may develop and distribute vaccines at accessible cost for eligible members. The setting of royalties must also consider commercial practices adopted during national emergency situations, pandemics, or similar circumstances.

The final part of the decision regards a very important theme which has not yet found proper regulation in Brazil: the use of confidential test data, such as those presented to the Brazilian FDA (ANVISA) to obtain a sanitary license. The WTO stresses that article 39.3 of the TRIPS Agreement, which covers the possibility of protecting confidential test data alongside other non-public material concerning tests, does not prevent a country from allowing quick approval of a COVID-19 vaccine produced during the waiver’s term.

In what pertains the term for adopting such measures, the decision has set a limit of 5 (five) years counted from the decision’s issuance, which may be broadened by the General Counsel due to exceptional circumstances related to the COVID-19 pandemic.

Notwithstanding the fact that the WTO’s decision still requires implementation in Brazil, we continue to follow this matter closely – especially in what concerns the possible impacts in negotiations of Industrial Property assets and its effects on the economy and technological development of the country.

Should you wish to be informed on further developments of this matter and/or need assistance or clarifications, do not hesitate in contacting us at mail@kasznarleonardos.com.