ISDS and Intellectual Property in 2020—Protecting Public Health in the Age of Pandemics

ISDS and Intellectual Property in 2020—Protecting Public Health in the Age of Pandemics

Description

Much as in 2019, intellectual property (IP) was not a major feature of the investor-state dispute settlement (ISDS) landscape in 2020. Some of the cases instituted earlier remained pending and new cases were filed, but there were no final awards directly related to IP. Unlike last year, however, the events of 2020 laid fertile ground for future investment disputes. Should these materialize, they will raise crucial questions regarding a state’s authority to protect public health in ways that have a deleterious impact on IP assets. That issue was at the heart of the cases that first drew attention to the consequences of considering IP an investment entitled to protection under international investment agreements (IIAs). In the two disputes decided on the merits, Philip Morris v Uruguay and Eli Lilly v Canada, the states won. However, the awards left many open issues on the scope of regulatory autonomy over IP rights. As I posited in last year’s Yearbook, the dearth of follow-on challenges suggested that both states and investors were reassessing their approach to exclusive rights in knowledge-based assets, at least when they affect public health. Right holders may have become reluctant to engage in disputes that would prompt states to negotiate new IIAs to better safeguard their regulatory authority. Moreover, states may have become wary of taking on the risks and costs associated with investor-state challenges to measures that impinge on IP rights. However, the pandemic that began in 2019 left many states with little choice but to step in. Information exchange was critical to contain the raging coronavirus and speed the development of diagnostics, treatments, and vaccines. Scientists needed access to data on SARS-CoV- 2, including all its variants, existing pharmaceuticals (to see whether they could be repositioned), diagnostics, vaccines, and manufacturing platforms (to determine whether they could be adapted), and research results of others working in the field. Because technologists predicted that multiple production facilities would be needed to satisfy global demand for medicines, diagnostic kits, and vaccines, as well as personal protective equipment, testing gear, ventilators, refrigeration units, vials, syringes, and the like, widespread dissemination of specifications, safety, and efficacy data, and manufacturing details was contemplated. To ensure safety and treat patients with ‘long COVID’ (symptoms that extend beyond the point of nominal recovery), it was also anticipated that there would be a continuing need to share data on variants, new treatments, and patients and their welfare. Much of this information was patented, claimed in patent applications, copyrighted, subject to data exclusivity regimes, or kept as trade secrets. To release the information, governments and scientific, international, and non-governmental organizations encouraged data sharing, private-public partnerships, patent pools, IP pledges, and voluntary transfers of technological information and finished products at low (or no) cost. However, not everyone was on board with this approach. Many pharmaceutical firms branded voluntary schemes ‘nonsense’: they had invested billions in coronavirus-related research and argued that it would be ‘dangerous’ to be stripped of exclusive rights in what they discovered. Moreover, some countries succumbed to vaccine nationalism and engaged in advance purchase and other financing schemes that deprived the rest of the world of a proportionate share in early supplies. The result was that many states enacted measures to limit IP rights as a way to ensure local access. Others expanded existing exceptions and limitations. Several members of the World Trade Organization (WTO) asked for a waiver of their obligations under the TRIPS Agreement for the duration of the pandemic—a move eventually endorsed by the US13 but opposed by many of the countries where research on COVID-19 was conducted. As of the date of this chapter (May 2021), the waiver question has not been resolved. But even if the WTO were to agree to waive TRIPS obligations, the decision would bind only the member states; it would not directly affect the private parties who own the relevant IP rights. Thus, the events of 2020 could raise difficult questions as to whether right holders can successfully challenge COVID-related state action under investment law. The pandemic will, in short, constitute a stress test. In this chapter, I conduct a thought experiment on how such suits might unfold. The first part describes how states sought or may seek to exercise control over the knowledge and products needed to protect public health during the global pandemic. The second considers the challenges that investors might lodge and identifies the places where safeguards protecting sovereign authority over healthcare may fall short.

Source Publication

Yearbook on International Investment Law & Policy 2020

Source Editors/Authors

Lisa E. Sachs, Lise J. Johnson, Jesse Coleman

Publication Date

2022

ISDS and Intellectual Property in 2020—Protecting Public Health in the Age of Pandemics

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