What You Should Know About the COVID-19 IP Waiver and Compulsory Licences in Canada

On May 5, 2021, the United States Trade Representative Katherine Tai announced that the Biden-Harris Administration will support the waiving of intellectual property protection for COVID-19 vaccines.

This came in response to India’s and South Africa’s proposal to the Council for Trade-Related Aspects of Intellectual Property Rights of the World Trade Organization (“WTO”) that a waiver of Sections 1, 4, 5, and 7 of Part II of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”), related to the protection of Copyrights, Industrial design, Patents and Trade secrets, in relation to prevention, containment and treatment of COVID-19 be recommended.

Is It the Most Appropriate Measure? 

Much debate has since ensued to determine if this would be the most appropriate measure to take in response to the present pandemic to ensure equitable, widespread and successful distribution of COVID-19 vaccines.

There is no doubt that the present pandemic requires a coordinated global effort to speed up the production and distribution of vaccines. However, it is not clear how much the proposed TRIPS waiver would alleviate the issue. Current barriers to COVID vaccine production are primarily manufacturing capacity and supply of starting materials. Manufacturing of vaccines is complex and requires proprietary know-how. This is especially true for the current COVID vaccines which are brand new technologies (RNA vaccines like Pfizer’s and Moderna’s) or adenovirus vaccines (like AstraZeneca’s and Johnson & Johnson’s) that have not been produced at this level before. Manufacture of these vaccines is not simply a matter of retooling existing facilities. New manufacturing processes need to be established and may take years to build. In addition, increasing competition and demand for the raw materials which are already very limited, may worsen the supply shortage.

Moreover, a TRIPS waiver will not provide immediate relief to the current crisis. A waiver must be unanimously agreed between all WTO member states and an agreement is many months (or years) away. Currently over 90 countries have announced support for the measure, while some, such as Germany, remain staunchly opposed. Thus, the waiver will not be the silver bullet to the current vaccine supply crisis everyone is hoping for.

What Is Not Headlined in the News that You Should Be Aware of

What is not being headlined in the news is that TRIPS already includes several provisions designed to provide flexibility to governments in the event of a national emergency or public health crisis. Specifically, Article 31 of TRIPS provides an exception to the protection of patent rights by allowing compulsory licensing or governmental use of patented inventions without the consent of the patent holder, under prescribed circumstances. Such a compulsory licence, issued by the government, allows a third party, or a government, to use a patented product or process without the consent of the patent owner in exchange for adequate remuneration to the patent holder.

Further, on December 6, 2005, WTO General Council approved a permanent amendment to TRIPS to allow manufacture and export of patented medicines by third parties into developing and least-developed countries, with the intention of facilitating such countries’ access to lower-cost versions of patented medicines needed to treat HIV/AIDS, tuberculosis, malaria and other epidemics.  

Where Does Canada Stand in this Debate? 

It is important to know that the Canadian Patent Act already includes compulsory licence provisions specific to patents for inventions dealing with food and medicine. Such provisions have been in place since 1923 and have been modified several times to prevent abuse of exclusive rights under patents, especially those owned by pharmaceutical companies.

On May 14, 2005, the Patent Act was amended to add sections 21.01 to 21.2 (“Use of Patents for International Humanitarian Purposes to Address Public Health Problems”). Under these sections, the Commissioner of Patents can authorize the manufacture and export of patented medicines to developing nations facing public health crises. Compulsory licenses are granted for a preset quantity of a pharmaceutical product and for a period of two years beginning on the day on which the authorization is granted.

Section 19 of the Patent Act also provides provisions under which, on application by the government of Canada or a province, the Commissioner of Patents may authorize the use of patented inventions by that government.

It remains to be seen what position Canada will take regarding the proposed TRIPS waiver. To date, Prime Minister Justin Trudeau has not taken a firm stance on waiving intellectual property rights for COVID-19 vaccines. The Canadian International Trade Minister Mary Ng has stated that Ottawa firmly believes in the importance of protecting intellectual property and recognizes how much the pharmaceutical industry has done to innovate COVID-19 vaccines. Indeed, the remarkably fast development of COVID-19 vaccines would not have been possible without the incentives for innovation provided by patents. In view of the substantial compulsory licence provisions already in place for both TRIPS and the Canadian Patent Act, any impact of the waiver on patented medicines in Canada is likely to be small.

BCF’s Patent team can help you navigate this process and optimize the value of your innovations. Should you have any questions regarding this article or patents in general, please do not hesitate to contact our team.