Is the National Security Exception in the TRIPS Agreement a Realistic Option in Confronting COVID-19?

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It has been suggested by some scholars and commentators that states can invoke the national security exception in the TRIPS Agreement as part of measures to tackle COVID-19 (see here, here, and here). This would entail invoking the security exception to suspend the enforcement of patent rights in order to facilitate either the importation or local production of needed medicines and/or vaccines. But is this a realistic option for states in the fight against COVID-19? That is the key question that will be addressed in this post.

Article 73 of the TRIPS Agreement provides for the security exceptions that states can invoke to defend their non-compliance with the TRIPS Agreement. This is a unique provision in the context of international intellectual property law. Crucially, the major intellectual property treaties that were in existence before the TRIPS Agreement i.e. the Berne Convention for the Protection of Literary and Artistic Works and the Paris Convention for the Protection of Industrial Property do not contain any security exceptions. Article 73 mirrors similar provisions in Article XXI of the WTO’s General Agreement on Tariffs and Trade (GATT) and Article XIV bis of the General Agreement on Trade in Services (GATS). 

The most pertinent provision with regard to COVID-19 is Article 73(b)(iii) of the TRIPS Agreement which mirrors Article XXI(b)(iii) of GATT. Article 73(b)(iii) permits a state to take ‘any action which it considers necessary for the protection of its essential security interests’ during the ‘time of war or other emergency in international relations’. Until very recently, the precise scope of this security exception was unclear and a number of states took the view that these exceptions were ‘self-judging’ and non-justiciable. Fortunately, Article XXI(b)(iii) of GATT and Article 73(b)(iii) of the TRIPS Agreement have now been recently considered and interpreted by two WTO dispute settlement panels. Article XXI(b)(iii) of GATT was interpreted in Russia -Traffic in Transit (2019) while Article 73(b)(iii) of the TRIPS Agreement was interpreted in Saudi Arabia – Intellectual Property Rights (2020). These two decisions have been discussed here and here.

For the purposes of this post, I will proceed with the assumption that COVID-19 can be regarded as an ‘emergency in international relations’ as interpreted in these two cases. Let us therefore assume that states, if they wish to do so, can invoke Article 73(b)(iii) to suspend the enforcement of patent rights to facilitate the production or importation of patented medicines or vaccines in response to COVID-19. I would however suggest here that invoking Article 73(b)(iii) is not a realistic option for a number of states for the following three reasons.

One, with regard to the production of patented medicines or vaccines, only states that possess the capability to manufacture pharmaceutical products domestically can arguably invoke Article 73(b)(iii) to justify the suspension of the enforcement of patent rights in order to protect their essential security interests during a pandemic such as COVID-19. While the so called BRICS countries (i.e. Brazil, Russia, India, China, and South Africa) do possess the capacity to produce generic versions of a number of pharmaceutical products, this is not the case in a number of other developing and least-developed countries. In addition, the production of vaccines occurs in only a few developed countries.

Two, in relation to the importation of patented medicines or vaccines, the security exception in Article 73(b)(iii) cannot be used to circumvent the problems associated with the waiver system contained in Article 31bis of the TRIPS Agreement. Article 31bis waives the obligation contained in Article 31(f) of the TRIPS Agreement where a state grants a compulsory licence for the production of a pharmaceutical product and its export to an eligible importing country. The genesis of Article 31bis is traceable to paragraph 6 of the Doha Declaration on TRIPS and Public Health which recognised that ‘WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement.’ Paragraph 6 further instructed the Council for TRIPS to ‘find an expeditious solution to this problem and to report to the General Council before the end of 2002.’ Eventually, in 2003, the General Council of the WTO adopted a decision on the ‘Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health’. This decision established a mechanism for the waiver of Article 31(f) of the TRIPS Agreement with respect to a WTO Member that grants a compulsory licence for the purposes of producing pharmaceutical products and exporting it to an eligible importing WTO Member. In 2005, this waiver mechanism was transformed into a permanent amendment to the TRIPS Agreement as Article 31bis which entered into force in January 2017. The usefulness of this waiver mechanism however remains doubtful as it contains a number of complex and cumbersome requirements and this has meant that it has been used only once to export anti-retroviral drugs from Canada to Rwanda.

To illustrate the uselessness of Article 73(b)(iii) in terms of circumventing the problems associated with Article 31bis, State A cannot invoke the security exception in Article 73(b)(iii) to justify a decision to suspend the enforcement of patent rights in its territory in order to produce and export patented medicines or vaccines into the territory of State B. As interpreted by the panel in Russia – Traffic in Transit and in Saudi Arabia – Intellectual Property Rights, the measures implemented by State A pursuant to Article 73(b)(iii) must not be remote from or unrelated to the emergency that it is implausible that State A implemented the measures for the protection of its own essential security interests arising out of the emergency. In other words, it is doubtful whether State A can invoke Article 73(b)(iii) to justify the suspension of the enforcement of patent rights in its own territory in order to protect the essential security interests of State B by exporting patented medicines or vaccines from State A into State B.

Three, least-developed countries are currently exempted from providing patent protection for pharmaceutical products until 2033. In fact, in June 2013, least-developed countries were granted a further extension till July 2021 with regard to the implementation of the TRIPS Agreement. Thus, it is unnecessary for least-developed countries (or at least those currently using these extensions) to implement measures to suspend the enforcement of patent protection for pharmaceutical products.

In conclusion, the above analysis shows that, in the absence of domestic manufacturing capacity, most of the flexibilities in the TRIPS Agreement (including the most extreme one i.e. the national security exception) may not be useful to some countries during a pandemic such as COVID-19. Importantly, it also demonstrates the point that facilitating access to medicines and vaccines in some situations may require measures that (include but also) transcend intellectual property rights. Going forward, a more useful strategy might be to focus on steps that countries (especially developing countries) can take to boost their domestic manufacturing capacity.

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Aditya Roy says

August 6, 2020

Dear Emmanuel
Thanks for the intervention.
Does this means that the Art 31bis obligations prevail over Art 73.
Best Wishes
Aditya Roy

Ruth Lopert says

August 6, 2020

Using TRIPS flexibilities to transcend IP rights in order to facilitate the procurement of medicines and vaccines at affordable prices is to be encouraged, but patent rights are not the only IP barriers that may need to be circumvented.

In most countries medicines and vaccines must have regulatory approval and in order to obtain this, the manufacturer must submit a dossier to the national medicines regulatory agency presenting clinical trial data demonstrating the efficacy and safety of the product. These data are frequently subject to long periods of protection or 'exclusivity' – particularly in countries with trade agreements with the US or EU – up to 11 years in the EU for example, from the date of marketing approval.

When a generic version of that medicine subsequently seeks marketing approval, it is not required to repeat the clinical trials conducted by the manufacturer of the originator product. Instead it may submit an abbreviated dossier, and may ‘rely’ on the originator’s safety and efficacy data in order to support its approval. But that reliance may only occur after the period of data and/or market exclusivity has expired.

Some countries – Malaysia, Chile and Colombia, for example – have recognised the importance of ensuring that data exclusivity provisions do not hinder the appropriate use of compulsory licensing, and have incorporated explicit waivers in their medicines’ regulations or patent laws, to facilitate registration of generic medicines where needed to protect public health. Boosting manufacturing capacity and utilising TRIPS flexibilities to circumvent patent barriers are important, but may not be sufficient.

Emmanuel says

August 6, 2020

Dear Aditya,

Thank you for your question. I don't think it is really about one set of obligations being superior to another. It really boils down to the circumstances in which Article 73(b)(iii) can be invoked by a state. Based on my reading of the panel reports in both Russia-Traffic in Transit and Saudi Arabia - Intellectual Property Rights, a state can only invoke this exception to address its own 'essential security interests' and not those of another state.

Jakob Cornides says

August 7, 2020

This learned inquiry into how the security exception of TRIPs might be used to confront COVID19 suffers from one very fundamental flaw: it is hypothetical to such a point that one can only describe it as grotesque.

Yes, there is a national security exception in TRIPs. And yes, there is a possibility to grant compulsory licenses on drugs, including for export to other countries. We all know that. But what this contribution completely fails to explain is how a patent for a drug (which drug???) is currently blocking countries from addressing the COVID crisis.

In the initial phase, the main concern for governments was how to procure a sufficient number of face masks. There was initially a scarcity of masks, or at least there was perceived to be. But those face masks are not patented, so TRIPs has nothing to do with them.

Much the same can be said regarding ventilation systems.

Then there was (and very probably continues to be) a scarcity of hospital beds and intensive care units - but scarce as they may be, they are not scarce because of any patent. Again, what does this have to do with TRIPs?

Finally, there is the problem of vaccines and drugs. COVID can be (and is) treated with existing drugs, and in most cases the treatment is successful. Maybe I have missed something, but is anyone actually saying that any of these drugs are unaffordable as a result of being patented? Which drug would that be? The contribution fails to mention it?

With regard to a vaccine, the problem is that it still needs to be developed. If TRIPs has any relevance in the COVID19 context, it is that pharmaceutical patents create the economic incentive for commercial enterprises to invest billions into research and development in order to develop such a vaccine.

But for the time being the problem is not that IPR stands in the way of people getting access to treatment.

Emmanuel says

August 8, 2020

Dear Jakob,

Thank you for your comment. I think your conclusion that 'for the time being the problem is not that IPR stands in the way of people getting access to treatment' is a fair and reasonable opinion. And yes, the analysis in my post is hypothetical, but I am not sure why it should be described as grotesque. My post is in response to calls by others (not me) for the invocation of the security exception in the TRIPS Agreement. Even if, for now, IP is not seen as a barrier to treatment for COVID-19, the pandemic is far from over and IP could still be an issue somewhere along the line. Given that, I think one can understand why some would suggest the invocation of the security exception. In this post, I am not arguing for or against the invocation of the security exception. I merely examine whether it is a realistic option in the current circumstances. Moreover, while the analysis in my post is about COVID-19, the arguments therein transcend the current pandemic.

Daniel Nicholas Pakpahan says

September 13, 2020

Dear Emmanuel,

Thank you for your post. However, I failed to understand how the first reason you stated is relevant for the invocation of Art 73 TRIPS, i.e. why would State invoke Art. 73 instead of just rely on Art 31bis, since it was created to overcome the lack of domestic capacity? On the second reason, does your concern relate to the feasibility of States' effort in getting around the cumbersome process of Art 31bis by invoking Art 73 TRIPS? I think the concern raised by the previous posts is whether (developed) States who opted out as eligible importers under Art 31bis can still access such mechanism in case their domestic capacity is overwhelmed; this emphasis on importers' opt out commitment is different from what your post is suggesting, i.e. that exporting States cannot use Art 73 for the security interest of other States, which I could agree on.

Emmanuel says

September 13, 2020

Dear Daniel,

Thank you for your questions. With regard to your first question, a state that possesses domestic manufacturing capacity can successfully invoke Article 73 to produce patented medicines or vaccines. However, while a state that lacks domestic manufacturing capacity can in theory invoke Article 73, I am not sure what the effect would be if it cannot actually produce the necessary drugs or vaccines locally. Of course, Article 31bis was introduced to address the problems faced by states that lack domestic manufacturing capacity. But, as you may already know, the procedure for making use of this exception is quite complex and cumbersome such that it has only been used once i.e. by Rwanda & Canada. So, I think the key point here is that, both Article 31bis and Article 73 may (realistically, not in theory) be unhelpful to states that do not possess domestic manufacturing capacity.

In relation to your second question, yes, my concern in this regard relates to the feasibility of States' effort in getting around the cumbersome process of Art 31bis by invoking Art 73. In this post, I do not address the question of 'whether (developed) States who opted out as eligible importers under Art 31bis can still access such mechanism in case their domestic capacity is overwhelmed'. That is a separate question that, I think, is distinguishable from whether those developed states can also invoke Article 73 (if they want to). I am glad we both agree that 'exporting States cannot use Art 73 for the security interest of other States'. That is actually the point I am trying to make here i.e. Article 73(b)(iii) cannot be used to circumvent the strictures of Article 31bis. Importantly, my goal is simply to ensure that people are realistic about the scope of Article 73 in the context of COVID-19. Once again, thanks for your questions.