Why Germany is opposing the WTO’s decision to suspend patent protection
Maintaining the right balance between the grant of absolute rights through patents (in contrast to free use of the patented subject in accordance with public interest and health) has become an increasingly important issue, especially in light of the covid pandemic. Against this background, a recent decision from the World Trade Organisation (WTO) has resulted in a temporary suspension of patent protection in exceptional cases.
The draft was adopted by WTO member states on 17 June 2022. The decision allows all "developing countries" over the next five years to permit use of covid vaccine patent subject matter without the rights holder’s consent, through any instrument available at local law level (eg, executive orders, emergency decrees, government use authorisations or judicial or administrative orders), regardless of whether a member state has a compulsory licensing regime in place.
The decision in Germany
The German government has opposed the proposal to suspend patent protection of covid vaccines for the most part. It emphasised its general support for vaccine supplies and for their global accessibility but contended that patent waivers were not an effective tool to reach this goal. Considering production capacity and quality control rather than IP rights as the main impediments to vaccine access, the government stated in early 2021 that "the protection of intellectual property is a source of innovation and must remain so in the future" and that the "lifting of patent protection for covid vaccines has significant implications for vaccine production as a whole".
In Germany, the public debate about a vaccine patent waiver is driven not only by parliamentarians and NGOs but also by pharmaceutical and biotechnology industry associations. Their arguments, which warn that a patent waiver could severely damage their industries and fail to solve the global vaccine shortage, carry substantial weight due to the significant market force of BioNTech, the German vaccine producer.
The key arguments against patent waivers are, first, that such these would discourage research and depreciate companies for which the technological knowledge constitutes a significant value. Rather than presenting an obstacle to achieve global availability, patent protection enables companies to invest in research in the first place, with the considerable value of patents providing an indispensable incentive for entrepreneurial activity in vaccine R&D. Further, a patent waiver would not tackle more immediate causes for low vaccination rates in economically weaker states such as distribution problems, shortages of skilled workers and poor health systems. According to these associations, focus should instead be placed on cooperation between states and companies in vaccine production, as well as on the global expansion of production sites. Various partnerships of this kind have already been established on a voluntary basis.
In legal literature, the necessity of a patent waiver is also questioned in light of the existing legal framework. German patent law provides for issuance of a patent use order by the government in the interest of public welfare. With an amendment to the Infection Protection Act in May 2020, German legislators also clarified that vaccines are explicitly among the covered products in this type of order. In addition, the Patent Act also entails a mechanism for compulsory licensing to be obtained before a patent court.
Nevertheless, several parliamentarians – including the heads of the green and left parties, as well as the current minister for health, Karl Lauterbach – have expressed their support for the patent waiver from the outset. In February 2022, the left party Die Linke put forward a motion in Parliament petitioning support for the waiver to the Agreement on Trade-Related Aspects of Intellectual Property (TRIPs) and that patent holders and manufacturers be made to grant licences and transfer technological know-how. The motion was, however, rejected by a sizeable majority of 498 to 117 votes. Afterwards, Chancellor Olaf Scholz made it clear that he did not support the waiver, reasserting that patents were a crucial tool for encouraging research. He agreed that the transfer of vaccine production facilities to the respective states would be a more effective measure for making vaccines accessible in emerging economies. In the end, Germany only voted in favour of the TRIPs waiver after the proposal had been significantly weakened.
In reaction to the WTO’s decision, the German Association of the Pharmaceutical Industry – which represents more than 270 companies in the field – reiterated its criticism of a patent waiver, stating that this would not solve the current challenges in global vaccine supply or make vaccines available faster on a global scale. Producing vaccines is a highly complex process that not only requires technology and training facilities, but also years of practice in handling relevant technology before safe, high-quality and highly effective vaccines can be made available. In retrospect, this argument is supported by the fact that at the height of the pandemic, most patents had not yet been granted and therefore no injunctive relief could have been obtained on this basis – only monetary compensation. However, even under the WTO decision, the payment of adequate remuneration is not precluded if patent protection is suspended.
While WTO member states have expressed their general sympathy for the inherently altruistic goal of decisions to provide broad access to potentially lifesaving vaccine technology in times of crisis, industrial nations such as Germany (and others including the United Kingdom and China) continue to favour patent protection over compulsory measures against patent holders for various reasons. It remains to be seen which measures Germany will take to provide for ethical, but still (commercially and from a safety perspective) reasonable access to covid vaccines in the future.
This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight
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