The answer lasted just 17 seconds, but it will have a chilling effect on innovation for years.
After her talk at the London School of Economics in early February, Ngozi Okonjo-Iweala, director general of the World Trade Organization (WTO), was asked whether she would “support an intellectual property waiver for climate technologies in order to tackle the climate crisis.” She answered that “on the green tech, I could not agree more. We’re going to see more of this type of argument.” While not necessarily endorsing intellectual property waivers, Okonjo-Iweala’s answer suggests, at a minimum, that demands of this sort will become de rigueur. That’s the problem.
By “this type of argument,” Okonjo-Iweala meant the one co-authored by India and South Africa to suspend intellectual property on COVID-19-related technologies. They insisted that patents and copyrights, for example, were impeding the response to the pandemic, especially in developing countries. Much to India’s and South Africa’s surprise, the argument won support, including from the U.S.
It’s known as the “TRIPS waiver,” so named because for five years, it will permit countries to ignore certain obligations under the WTO’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).
The waiver, agreed to at the WTO’s twelfth ministerial conference last June, does less than its proponents wanted. In contrast to the original text, it’s coverage is limited to patents and doesn’t include COVID diagnostics and therapeutics. The latter technologies were deferred until a decision that had been scheduled for this past December.
But no decision was taken in December. Several countries expressed doubts about covering COVID diagnostics and therapeutics, not least because there’s no agreement on what this includes. Critics of the waiver also fear it will quash innovation. Patents, for example, provide 20-year monopoly rights on the commercial use of an idea. This incentivizes research and development where the idea can be reverse-engineered by others at little cost. To suspend, or even threaten to suspend, patents can thus undermine innovation.
On Dec. 6, the Biden administration announced it wanted more time to study the pros and cons of expanding the TRIPS waiver, and thus instructed the U.S. International Trade Commission (USITC) to write a report. Things will come to a head by October, when the ITC’s report is due.
Mexico and Switzerland have already rendered their verdicts, telling the WTO that there’s no evidence that intellectual property has slowed the fight against COVID in developing countries.
To assess things for itself, the administration gave the USITC some questions, few of which have anything to do with innovation. Instead, most of the questions focus on market trends, pricing, and the efficacy of compulsory licenses, for example. This is all one step removed from the action: Without patents, there would not have been any (repurposed) vaccines on which generics could be based. Put simply, it’s impossible to reverse engineer … nothing.
Okonjo-Iweala’s answer about green tech raises another concern: the slippery slope. Critics of intellectual property have been emboldened by the fact that the TRIPS waiver was agreed, never mind that it will possibly be expanded. They’ll undoubtedly propose other technologies for similar treatment. They’ll insist these waivers are meant to be temporary. But even so, the effect would be to create uncertainty, and deter investment in innovation. Moreover, just a few waivers would span a tremendous breadth of technologies. Add a green tech waiver to an expanded TRIPS waiver, and the breadth of coverage is almost incalculable.
The irony is unmistakable. Patents enabled scientists to develop COVID vaccines in under a year, yet the pandemic resulted in the largest government-sponsored theft of intellectual property to date. This is not a template for green tech. Dealing with the climate crisis, like fighting COVID, calls for strengthening intellectual property rights, not waiving them.
Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University, and a Global Fellow at the Wilson Center’s Wahba Institute for Strategic Competition. Follow him on Twitter @marclbusch.