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BIO responds to USTR report and warns against TRIPS waiver

The U.S. Trade Representative (USTR) needs to call out worldwide intellectual property deficiencies that harm U.S. biotech innovation—and they must not support a proposed waiver of World Trade Organization (WTO) IP protection, says a Jan. 31 submission from the Biotechnology Innovation Organization (BIO).

BIO’s 42-page submission provides input for USTR’s “Special 301” report, the agency’s annual review of IP protection and enforcement worldwide. Submissions from stakeholders such as BIO are used to compile the report, typically released in the spring of each year.

Along with a comprehensive review of problematic IP polices, BIO lists 10 countries that belong on the “Priority Watch List” due to poor IP protections: Argentina, Brazil, Canada, Chile, China, Colombia, India, Japan, Mexico, and South Korea.

“The vast majority of BIO’s members are small and medium sized enterprises (SMEs) that currently do not have products on the market. As such, BIO’s members rely heavily on the strength and scope of their IP to generate investments needed to develop and commercialize their technologies,” says BIO’s Special 301 Submission.

The submission notes an “unchecked deterioration of IP rights globally” and details the barriers to strong global IP.

“The immediate impact of the adverse global IP environment detailed in this submission is the denial of equitable market access abroad for our biotech enterprises,” the submission warns. “The unchecked deterioration of IP rights globally has significant medium- and long-term implications for the broader U.S. private sector.”

The importance of safeguarding COVID IP

A major section of BIO’s Special 301 Submission describes the importance of IP to biotechnology and gives a detailed explanation of the negative impacts that would stem from a WTO waiver of IP protections on COVID diagnostics and therapeutics.

The waiver proposal is on the agenda of WTO’s 13th Ministerial Conference, set for Feb. 26-29 in Abu Dhabi. USTR’s position on the proposed waiver has not been clarified, and the U.S. is expected to have a strong influence on any decision, so the report gives a special focus to the issue.

The protection of IP has allowed innovators to develop COVID vaccines, therapeutics, and diagnostics, the report notes. Without IP protections to ensure innovators are paid for their work, there would have been no investment or voluntary sharing of COVID technology, it explains. And yet some maintain that IP hinders the spread of this technology.

“Unfortunately, there have been many unfounded claims that IP has hindered the development of tools to fight COVID-19, as well as access to those tools. As a result, there have been numerous calls for the adoption of measures to weaken IP rights counter to global commitments embodied by the (WTO) TRIPS Agreement,” BIO’s statement says.

Giving away the IP for COVID therapeutics, including antivirals that might be used to fight other diseases, means the developers of those drugs will lose returns on the money and time invested, BIO explains. Such an IP giveaway would mostly benefit drug manufactures in other countries and should therefore be opposed by the USTR, the submission notes.

“Countries like India and China, which actively compete with the U.S. for biotech leadership and investment dollars, are predictably supportive of this IP waiver—a scenario which makes USTR support for, or ambivalence toward, this policy all the more baffling,” BIO says. “USTR support of, or ambivalence toward, a policy which points to IP rights as a barrier to the access of COVID-19 therapeutics around the world undermines the American biotech sector, compromises U.S. leadership in the life sciences, jeopardizes future pandemic preparedness efforts, and needlessly increases the risk exposure of biotech IP portfolios across sectors.”

The most pressing IP challenges

BIO surveyed its membership, asking firms to “identify relevant IP barriers globally that frustrate their business and R&D operations.” The members’ concerns are presented thematically, and BIO identifies “the issues that we believe should be prioritized by the U.S. government in its trade-related engagements with foreign countries and in its dealings with multilateral organizations.”

Key problematic areas include:

Compulsory licenses: In certain countries, a government can grant compulsory licenses (CLs) that take IP rights from the owner of a patent and give it to a third party. “Some governments have issued and several more have threatened to issue CLs that allow local companies to make, use, sell or import patented medicines without the consent of the patent holder,” says the submission. “BIO strongly believes governments should grant CLs only in accordance with international rules and as a last resort in exceptional circumstances.”

Technology localization measures: “Forced technology transfer measures, R&D localization policies and local manufacturing or working requirements to maintain the validity of patents held by foreign IP rightsholders are common strategies employed globally to undermine the IP rights system,” BIO’s submission says. “In addition to CL measures, forced localization policies also seek to compel a foreign entity to engage in local manufacturing, local R&D investments, or the transferring of IP to local enterprises,” as a way to ensure access or to be able to set the price of an innovation.

Regulatory data protection (RDP): Biotechnology innovators must submit comprehensive information to authorities to demonstrate the safety and efficacy of a medicine or agricultural biotech product for marketing approval. Appropriate regulatory data protection is necessary to prevent this sensitive data from being disclosed or exploited for commercial use. “Unfortunately, many U.S. trading partners do not provide adequate, if any, RDP. This is clearly contrary to WTO rules,” BIO’s submission notes.

Patent acquisition obstacles: These can include restrictive patentability criteria that prohibit patents on certain types of inventions; patent office backlog or other administrative difficulty; difficulty in submitting supplemental data for a patent application burdens; a proposal for a new “international instrument” that imposes new disclosure obligations for patents; and difficulties with patent term adjustment and expansion.

Patent enforcement challenges: These include a lack of efficient, early resolution mechanisms for patent disputes, the ability for a party to use a patent that is under dispute, as well as other legal challenges to enforcing patent rights.