‘A Victory for Beijing,’ Says the WSJ About Last Week’s Short-Sighted WTO Agreement on Invention Rights

The 164-member World Trade Organization has turned on the U.S. by confirming a new patent waiver process that goes beyond previous agreements and requires American businesses to relinquish their patent rights not only on vaccines but to other seminal inventions.

Among the confusing aspects of this new deal is whether it is necessary given current vaccine surpluses. The agreement is in conflict with the position taken by most developed economies, including the U.S.’ European allies, and puts China in a position to use American mRNA discoveries as its own.

There is nothing legally binding in the new agreement to stop China from stealing U.S. mRNA technology, using it to develop its own vaccines including for other diseases, and then selling the vaccines under its  own brands.

Framing Defeat as a Victory

“The White House is flogging the deal as a diplomatic victory. But it’s an enormous defeat for U.S. national interests that will benefit China and set a precedent that erodes intellectual property protection,” said the Wall Street Journal in a June 17 editorial board column.

Position on eliminating ‘monopolies’ on medical discoveries by nation (2021).

“Succumbing to pressure from the left, President Biden endorsed an IP waiver,” continues the Journal. “He also undercut European allies who opposed the patent giveaway. And for what? Vaccine makers had already committed billions of doses to developing countries. Now the world is awash in vaccine doses and tens of millions are thrown out because low-income countries lack the healthcare infrastructure to distribute them. This makes the WTO agreement all the more perplexing.”

The new agreement reached last week overrides rules previously established by WTO that already provided a process for compulsory patent licensing of drugs to developing countries during public-health emergencies.

Forbes wrote: “It takes $2.6 billion and a decade of research and testing to successfully bring a new drug to market. If new medical technologies can be seized by headline-hunting politicians, companies and investors aren’t going to commit the resources and take on the enormous risk of developing new medicines and medical devices. Why undergo such a process if hard-won success will be handed over to China and others on a silver platter?”

Profit-Motives Matter

American medical research and businesses enabled several highly effective COVID-19 vaccines to be developed in record time for a pandemic (months) and widely distributed. The profit motive is a proven incentive. A primary reason for this unprecedented success is the existence of strong  patents, which incentivize manufacturers to innovate, ensure medicines are safe and effective and that investment for the next generation of cures is available.

 ‘Requiring successful invention sources to give-away rights to their most important products sends an abysmal message: succeed extraordinarily and you will lose control’

Making invention holders provide a compulsory license to medical breakthroughs is apparently not enough for most members of WTO, including the U.S. What they fail to acknowledge is that requiring successful invention sources to give-away rights to their most important products sends an abysmal message: succeed extraordinarily and you will lose control.

“Waiving intellectual property rights would only hobble the innovation that is critical to improving lives and raising living standards globally,” said United States Chamber of Commerce and Global Innovation Policy Senior Vice President Patrick Kilbride, as reported by IPWatchdog. “If enacted, this move would set an unfortunate precedent and may limit innovative companies’ ability to devote unprecedented resources to quickly discover and deliver solutions for the next global crisis, be it pandemic, food security, or climate-related.”

Kilbride said that the final WTO deal was ” a solution in search of a problem.”

Advocacy Groups Want More

Remarkably, despite the weakening of intellectual property rights the five-year agreement achieves, advocacy groups are opposed to the final deal on the grounds that it has no teeth and merely restates flexibilities already available under TRIPS (Trade-Related Aspects of International Property Rights).

Industry and business groups insist the negotiations have wasted valuable time focusing on IP rights as the source of the problem when, in fact, the problems are far more complex. Lack of government financial support from developed nations and the absence of local distribution systems for vaccinating people in poorer ones play a significant role.

Addressing a Health Crisis

There certainly should be more support for developing nations, especially during a global health crisis, but putting that burden primarily on the businesses and researchers who successfully rise to the greatest medical challenges is not a solution. It will do more harm than good.

Image source: cnbc.com; patentdocs.org

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