All Nations Must Respect and Protect Intellectual Property Rights | Citizens Against Government Waste

All Nations Must Respect and Protect Intellectual Property Rights

The WasteWatcher

World Intellectual Property Day recognizes the innovation and ingenuity of authors, inventors, researchers, and songwriters around the globe.  Unfortunately, the celebration today, April 26, 2021, is not as robust as it could be since too many countries around the world refuse to respect intellectual property (IP) rights protection, including under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which turned 25 during 2020.

The disrespect, or more accurately in some countries attempted theft, of IP rights is particularly troubling with respect to pharmaceuticals.  Rather than celebrating the unprecedented research, development, and investment made by pharmaceutical companies in combating the COVID-19 virus and its variants with highly effective and safe treatments and vaccines, there are elected officials in the U.S. and around the world who believe that these companies should not be fully compensated for the work they did.  One of the most recent examples was the October 2, 2020 request by India and South Africa, supported by more than 100 nations, for a waiver of certain provisions of the TRIPS agreement from the World Trade Organization (WTO) to allow member countries to “bypass granting or enforcement of patents, trade secrets, industrial designs, and copyrights on COVID-19-related drugs, vaccines, diagnostics and other medical technologies for the duration of the pandemic.” 

To date, the WTO has refused to agree to this proposal, but the suggestion that these IP rights should be stolen from their inventors is extremely troubling.  As noted by the European Commission, incentives to innovate must be maintained, and waiving patents would not solve any production issues related to making more vaccines available around the world.  But it is not surprising that India and South Africa are taking the lead, since the two countries rank among the 14 worst overall out of 53 countries in the U.S. Chamber 2021 International IP Index, and in the bottom eight for patent protection.

If the WTO approves the waiver, it will not only open up the uncompensated taking of COVID-specific patents, but also any related patents for products, designs, and copyrights for treatment that were being researched for other illnesses.  And if the door is opened for dismantling patents, trade secrets, industrial designs, and copyrights for one industry, the flood gates will open for dismantling this protection over other forms of IP by all inventors, including the small and medium-sized businesses that are the focus of World IP Day. 

While the United States continues to be the global leader in protecting IP rights and for now continues to object to the WTO waiver, some members of Congress and Health and Human Services Secretary Xavier Becerra have suggested that “march-in rights” be used for a federal government takeover of certain drugs.  Under the 1980 Bayh-Dole Act an institution that receives a federal research grant and patents an invention is allowed to license the patent to the private sector.  Prior to Bayh-Dole, only 5 percent of government-funded research was successfully commercialized.  March-in rights may only be used if the titleholder has not taken action to commercialize the invention.  Should march-in rights be used by politicians to take a patent as part of an effort to supposedly lower drug costs, it will not be long before government-funded inventions again sit on a dusty shelf unused like they were pre-1980.

On August 4, 2020, then-California Attorney General Becerra led a coalition of 34 state attorneys general on a letter to the Department of Health and Human Services (HHS) demanding that the department use march-in rights on remdesivir, manufactured by Gilead, which is the first drug used to treat patients hospitalized with COVID-19.  The Food and Drug Administration approved remdesivir, or Veklury, on October 22, 2020, and it has been found to shorten recovery time from the disease. 

Prior to its success with COVID-19, Gilead had created and developed remdesivir as an antiviral drug in 2009 at its own expense to fight hepatitis C.  It was not effective for that disease.  When Ebola was spreading in Africa in 2014, Gilead worked with the National Institutes of Health to see if remdesivir would be a potential treatment for that disease, but another therapy was found to be more effective.  Additional research was conducted to see if it would work against coronaviruses SARS and MERS, which showed promising results.  The company is expecting to invest more than $1 billion in 2021 to expand its manufacturing capacity and researching to see if an inhaled solution, as opposed to the current intravenous administration, would be an effective treatment.

Fortunately, HHS rejected the AGs’ request two days after the letter was sent, noting in a statement from a spokeswoman that, “We can only exercise march-in rights where the intellectual property to make the product, as a whole, was funded by the federal government.  In short, all of the patents underlying the product have to have been conceived or reduced to practice with federal funds for Bayh-Dole’s march-in provision to be of any practical significance.  We do not believe this to be the case here.”  In fact, march-in rights have never been used for any pharmaceutical since the law was enacted.

The U.S. leads the world in bringing new innovative drugs to market through private investment and research.  Other countries that have less respect for IP rights will remain far behind in not only biopharmaceuticals, but also other industries unless they change how they view these essential rights.  These IP laggards should be aware that nations with strong IP protection have more innovative economies with greater private sector investment.  

It is always helpful to remind the world that the United States protects IP in the Constitution, the only property right given such protection.  Article I, Section 8, Clause 8, grants Congress the enumerated power “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

Without strong IP rights over critical inventions, pharmaceutical innovations in combatting diseases like the coronavirus will become increasingly difficult.  During a Center for Strategic and International Studies conference on April 22, 2021, Sen. Chris Coons (D-Del.), a strong advocate for IP rights, noted that if India and South Africa receive their broad waiver request of IP rights from the WTO, “the world will suffer as a result.”

On World IP Day, the focus should be on the collaboration and innovation that facilitated the rapid facilitation of fighting the pandemic, not working toward diminishing the rights of the inventors, authors, songwriters, small and medium-sized businesses, and others whose intellectual property makes the world a much better place to live.



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