Weekly take: IP-trade demands will fail future generations
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Weekly take: IP-trade demands will fail future generations

Global healthcare

The bedaquiline case highlights why tools such as India’s pre-grant opposition mechanism are so important

Could another Diwali be set to come and go without a UK-India trade deal?

A recent report in The Financial Times confirmed UK Prime Minister Rishi Sunak had abandoned plans to sign a deal on a trip to India later this month.

It’s another missed target in negotiations that have so far failed to meet any of the major deadlines set for it.

Last year, there was much chatter about the UK government’s confidence in getting a “deal by Diwali”, which fell on October 24 2022.

UK officials have wisely chosen to leave that slogan on the shelf ahead of this year’s festival on November 12.

So, what’s taking so long?

We know intellectual property rules are a problem. A draft of the UK’s preferred IP deal, which was leaked last year, revealed the government was looking for major concessions from India.

Under that proposal, India would have had to abolish its pre-grant patent opposition system, which permits interested parties to challenge the validity of a patent before it takes effect.

The UK has no such system, meaning challenges can only be brought after a patent is granted.

It’s hard to know exactly which details are red lines for the UK, but we know that British negotiators want India to significantly tighten its IP system.

Pre-grant opposition

Indian officials, reports earlier this year indicated, have no desire to overhaul the country’s patent rules to meet the UK’s standards.

Nor should they. But new patent amendments on the table in India could make it prohibitively expensive to challenge patents.

Whether pressure to complete a trade deal has informed the Indian government’s plans is difficult to know.

We can assume that pro-patentee reforms are likely to make a UK-India deal on IP easier to achieve.

Either way, the consequences for public health not just in India, but low- and middle-income countries more generally, could be severe.

India is one of the world’s leading manufacturing bases for generic drugs.

Its less restrictive patent laws have helped the generics sector establish itself as a major supplier to the developing world.

The UK is doing what rich countries do – using trade talks to try to discipline lower-income countries into compliance with strong IP rights.

The result is to block the export of IP, knowledge, and technology except on rich countries’ terms.

Tripswire

Case in point: the creation of the TRIPS Agreement.

In their 2002 book Information Feudalism, academics Peter Drahos and John Braithwaite detailed how US trade officials, with the help of pharmaceutical capital, isolated opponents of TRIPS in what is now often called the ‘Global South’.

India, and its key ally in the talks, Brazil, held out against incorporating IP into global trade rules longer than most.

But that partnership collapsed in 1990 when the US leveraged its economic power over Brazil and the threat of tariffs to secure concessions on pharmaceutical patent protection.

It was only in the 1980s that IP came to be regarded as an issue suitable for trade negotiations.

In one sense, the prominence of IP in free trade deals doesn’t make much sense.

Richer countries have typically sought to use such agreements to free up capital flows and remove barriers to trade.

However, the sorts of IP laws they wanted were designed to shut out competition and secure exclusivity rights for their companies.

To the US pharmaceutical industry, though, it made perfect sense.

Former Pfizer CEO Barry MacTaggart wrote an op-ed for The New York Times in 1982, accusing the UN, in the form of WIPO, of trying to “grab high-technology inventions for underdeveloped countries”.

Pfizer helped to bring about a shift in US diplomatic strategy on IP.

Regarding WIPO as unfriendly terrain, the US instead began to use bilateral and multilateral trade talks to secure global compliance with its preferred IP rules.

Nowadays, most major free trade deals have an IP chapter, while governments regularly use trade institutions to bring countries with weaker IP rights into line.

The Office of the US Trade Representative uses its annual Section 301 report to keep the pressure on countries that it believes don’t meet its IP standards.

Major IP offices also frequently employ a network of IP attachés around the world to defend their countries’ interests.

The UKIPO, for example, has attachés in China, India, Singapore, and Brazil.

These institutions have undoubtedly been successful at exporting the standard of IP protection rights owners have in the UK and the US.

But the globalisation of IP policy now endangers the few mechanisms that civil society groups in the Global South have to defend their own interests. 

Patent pressure

Take India’s pre-grant opposition mechanism, for example.

This morning Managing IP published an interview with Fatima Hassan, director of the Health Justice Initiative NGO in South Africa.

Hassan explained how significant the role of India’s pre-grant opposition was in radically lowering the cost of bedaquiline, which is used to treat multidrug-resistant tuberculosis (TB).

Johnson & Johnson’s patent on bedaquiline was set to expire in most countries this year, so it applied for a secondary patent on the drug in India.

Two TB survivors used the country’s pre-grant opposition procedure to challenge the patent, leading India's patent office to deny the application in March this year.

Over the course of this year, J&J’s monopoly on bedaquiline fell away. A successful social media campaign by activists, building on years of groundwork, helped to apply pressure on the drugmaker.

In July, the UN-backed Stop TB Partnership secured the rights to supply generic bedaquiline to low- and-middle-income countries.

I wonder what Barry MacTaggart would make of that?

He might see it as just another case of developing countries “grabbing” inventions for themselves.

But it’s a different world from that in 1982. For one thing, capitalist growth has ripped through natural ecosystems, raising the threat of new pandemics. COVID was likely just the start.

The European Commission has come around to the idea of being able to make IP rules subordinate to industrial policy when necessary.

Its proposed new rules on compulsory licensing would greatly strengthen the EU’s ability to compel pharmaceutical patent owners to share their IP.

‘Mr No’

This could not be more different from the approach the EU advocated during the protracted talks over a TRIPS waiver during the COVID pandemic.

The EU, as one observer of the talks told me, played the role of “Mr No” on that occasion.

Now, the World Health Organization – another organ of the UN, that ancient foe of IP owners – is trying to broker a new pandemic treaty that could waive the normal operation of IP rights in a crisis.

So which Europe are we getting in those negotiations?

Mr No, it seems.

German health minister Karl Lauterbach said earlier this month said most European countries would not accept any pandemic treaty that put a major limitation on IP rights.

“That is a part of our DNA … we need IP security in order to invest into vaccines, invest into therapeutics, diagnostics, and so forth,” Lauterbach said.

In a line, Lauterbach effectively summarised Europe's IP strategy.

European policymakers want the ability to step in and direct production in a crisis, even if it means overriding IP rights.

But they have no interest in extending those flexibilities to international trade or health institutions and allowing the outflow of IP to the Global South.

Such an approach is incompatible with global health. The diffusion of knowledge – well beyond what is declared in patents – and capacity is critical to equipping developing countries and protecting all of us against future pandemics.

Those of us in the UK, where I’m based, and across the Global North should critically assess our governments’ approaches.

A good start would be for the UK to drop any remaining demands that India shut down its pre-grant opposition.

The coming crises demand international solidarity and cooperation, including the redistribution of knowledge.

The history of trade-based IP rules shows they could not be any less suitable for the task.

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