When the world finally emerges from the public health crisis that is COVID-19, we will all be reminded that the crisis presented by climate change remains, and looms larger than ever.
And just as much of the hope of finding a global solution to the COVID-19 crisis lies in the development of new treatments and vaccines, so too does much of the solution to climate change lie in the development of new technologies. In the absence of fundamental changes to the funding structures for research and development, it will in large part fall to the private sector to drive that innovation.
Intellectual property rights (IPRs) are a key part of incentivising the high risk investments required to develop and commercialise new technologies. But what happens to this model in times of a global crisis when IPRs are challenged by demands for universal access to key technologies?
The pharmaceutical sector has long faced arguments that protecting (and therefore incentivising) innovation through the IPR system on the one hand, and ensuring access to new technologies (i.e. medicines) throughout the world on the other, are fundamentally incompatible. The debate raged with the rise of the HIV epidemic, and is now in the headlines once again as new treatments and vaccines for COVID-19 are being investigated.
When it comes to climate change, similar arguments are emerging, namely that the traditional framework of IPRs will undermine the ability the disseminate the technology the world needs to meet this global crisis. With these arguments is likely to come an increased pressure on the energy sector to ensure access to new technologies.
In thinking about these issues, the energy sector has much it could learn from the pharmaceutical sector.
IPRs and facilitating access to medicines
Since 1995, the Agreement on Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) has mandated consistent, minimum standards of IP protection among member states of the World Trade Organisation (WTO). This includes a requirement that all WTO members provide 20-year patent protection (i.e. exclusivity) for innovative products and manufacturing processes.
Patent laws, and the exclusivity they provide, are justified on the basis that such a reward is necessary to encourage investment in research and development. In the pharmaceutical sector, for example, the road to discovery and development of a successful drug typically involves hundreds of millions of dollars, many years and many failures. A period of exclusivity in relation to a successful drug gives the innovator the ability to recoup its investment and incentivises further research.
However, exclusivity can affect how new technologies are disseminated. Facilitating access to medicines, particularly for vulnerable and poor populations in developing countries, has been a critical and often contentious issue for many years. For the pharmaceutical sector, this issue was cast into the spotlight during the HIV epidemic when developing countries struggled to gain access to new technologies (in that case antiretroviral drugs) at affordable prices. Ultimately, the debate led to the 2001 Declaration on the TRIPS Agreement and Public Health (the Doha Declaration) which affirmed the right of WTO member states to interpret and implement TRIPS in a manner supporting the protection of public health and, in particular, access to medicines.
A flexible approach demonstrated with COVID-19 technologies
The Doha Declaration did not, however, reconcile the claimed tension between IPRs and access to medicine for all time, as reflected by renewed debates in relation to COVID-19 treatments and vaccines.
More than 30 developing countries have, for example, signed up to the WHO’s voluntary COVID-19 Technology Access Pool (C-TAP), an initiative which is intended to facilitate access to and sharing of inventions, IPRs and data relating to COVID-19. But large players in the pharmaceuticals sector like the US and the UK have so far not been particularly supportive of this WHO initiative. Others have gone further, demanding that pooling and licensing of technology should be mandatory for COVID-19 technology on a global basis. A number of countries have also made provision for, or granted, compulsory licences for patents on medicines and other products relating to COVID-19.
In parallel, pharmaceutical companies have been adopting a range of flexible approaches in order to facilitate access to potential and future treatments and vaccines. All of these approaches reflect the continuing importance of IPRs to pharmaceutical companies, but seek to balance those rights against the self-evident need to ensure that any treatments or vaccines are developed quickly, and made as widely available as possible.
A number of companies have entered into a range of voluntary licensing arrangements. In some cases, those licensing arrangements are with generics for supply to nominated middle and low income countries. In other cases, the arrangements allow for in-country manufacture and supply. Another approach that has been adopted has been the giving of assurances that global patent rights will not be enforced where particular medications are intended for use in the treatment of COVID-19.Different funding models have also emerged, which defray the massive costs of developing a new vaccine.
CEPI, for example, is a partnership between public, private, philanthropic, and civil organisations, launched in 2017 to develop vaccines to stop future epidemics. It has issued calls for project proposals for the development of new vaccine candidates - for successful applicants, CEPI provides funding on the condition of equitable access to any developed vaccine. Together with Gavi (the Vaccine Alliance) and the WHO, CEPI is also part of the COVAX initiative. This initiative encompasses the COVAX Facility, through which participating higher income countries make up-front contribution towards payment for a vaccine. The COVAX Facility uses its pooled resources and funds to incentivise vaccine manufacturers to expand production capacity in advance of regulatory approval for their vaccine. This reduces the investment risk for the manufacturers and will speed up production on vaccine approval. The Facility will also use its collective purchasing power to negotiate competitive prices that will be passed onto participants. COVAX separately is raising funds to facilitate access to any vaccine for middle and lower income countries.
Lessons for a low carbon future
The Paris Agreement 2015 recognises the importance of technology to addressing the threat of climate change, with Article 10 stating that “[a]ccelerating encouraging and enabling innovation is critical for an effective, long-term global response to climate change”. At the same time, the text of the Paris Agreement recognises the different circumstances of developed and developing countries, and the need for technology transfer. What the Paris Agreement does not do, however, is resolve ongoing debates over the proper relationship between IPRs, technology transfer, and climate change – a debate which has been remained unresolved at successive international climate conferences.
As calls for action grow, innovators in the energy sector may well find themselves under increasing pressure to make low carbon technologies available for use around the world, including in low- and middle-income countries. Arguments that IPRs have no place in a global crisis, which we have once again seen voiced during the COVID-19 outbreak, may start to increase in volume in the energy sector.
To some extent, that has already begun, and includes demands for:
- a Declaration on Intellectual Property and Climate Change in the same vein as the Doha Declaration on the TRIPS Agreement and Public Health 2001;
- the use of compulsory licensing;
- voluntary or compulsory patent pools; and
- impact funds – with CEPI and COVAX providing models for alternative funding arrangements.
The experience of the pharmaceutical sector, particularly through significant public health crises, has demonstrated that it is possible, and preferable, to adopt flexible approaches. Those approaches facilitate technology transfer while preserving the IPRs of those who are leading the charge to develop the technologies the world needs to overcome global challenges. That experience also demonstrates that being proactive in addressing these issues produces better outcomes for all concerned.
Those in the energy sector should engage with these issues, examine the experience of and learn lessons from the pharmaceutical sector, and engage constructively as the pharmaceutical sector has demonstrated it is possible to do.
 See Matthew Rimmer (ed), Intellectual Property and Clean Energy: The Paris Agreement and Climate Justice, 2018, p136-142.
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© Herbert Smith Freehills 2021