Patent Capital in the Covid-19 Pandemic: Critical Intellectual Property Law

by | 9 Feb 2021

The current controversy around intellectual property rights has focused on the role of intellectual property in the current Covid-19 vaccine shortage. But the present situation should not be understood as a manifestation of an exceptional legal event. Rather, it is a reflection of the legal normal that has been in place for the last twenty-five years since the 1995 TRIPS Agreement that forms the legal transnational structure for intellectual property-driven knowledge capitalism. 

Patent rights grant monopoly power to their holders – mostly multinational corporations. The problems that these transnational monopoly rights cause have been well-known: patents on medical inventions, in particular, have provided  pharmaceutical corporations, as well as the more under the radar biotechnology companies, with the right to charge exorbitant prices, limit supply through exclusive licensing contracts, prohibit parallel imports, and extend the temporally delimited twenty years of a patent monopoly through “evergreening”, which only requires minor modifications of the initial invention for which the patent was obtained. 

If there is any novelty in the present pandemic situation, it is that the Covid-19 pandemic does not only hit Africans, Asians and South Americans.  The wealthy countries’ population might have become used to seeing others as pandemic subjects that are at the mercy of their charity. In the present pandemic, however, even the wealthy cannot pay their way out of it so easily, as Canada and the European Union member states are finding out. Although Canada ordered vaccine doses six times the size of its population, the vaccine rollout is going slowly. The overall scale of vaccine production is still not sufficient to provide the promised supply to the rich countries, although they had outbid lower-income countries by putting in large orders via an Advance Market Commitment. Now the high-income countries are fighting each other, as we have witnessed in the sad tale of vaccine nationalism between the UK and the European Union. 

Vaccine nationalism describes the phenomenon in which national governments outbid each other in the Advanced Market Commitments, despite proposed solutions for a more equitable distribution; inject large amount of taxpayers’ money into vaccine research and developments of their national institutions and corporations, thereby creating a relationship of gift obligation (e.g. Oxford/AstraZeneca); and impose restrictions on vaccine exports with the aim to prioritise the vaccination of their population over others.  It also entails an understanding that the national jurisdiction denotes the demarcation of vaccination priority and duty of care and disregards international guidelines on vaccine priority groups, such as the one provided by the WHO. Vaccine nationalism can also entail discrimination between groups of people within a jurisdiction, as in the case of Israel and potentially also in other countries, such as Denmark and Greece which are toying with the idea of a vaccine passport. It combines biopolitical governance that leaves individuals to their own risk calculations, whilst simultaneously asserting the power of juridico-sovereign nation states that disregards the social and racialised nature of risk. In the context of the Covid-19 pandemic, vaccine nationalism may be better thought through with the granularity of Luhmann’s social theory of risk and Desrosières’ history of statistics rather than by recourse to juridico-sovereign understandings of governmentality that overlooks non-juridical knowledges and their power.  An analysis of vaccine nationalism also ought to take into account the history of international capitalisation of knowledge via intellectual property. 

From the perspective of critical intellectual property law scholarship, vaccine nationalism is a phenomenon of economic nationalism that has been structurally embedded in favour of countries owning IP, such as the US and EU, in the 1995 TRIPS Agreement. Susan Sell’s Private Power, Public Law (2003) describes in detail the capture of the processes and outcome of the TRIPS Agreement by the US-based International Property Committee which consisted of Bristol-Myers, CBS, DuPont, General Electric, General Motors, Hewlett Packard, IBM, Johnson & Johnson, Merck, Monsanto and Pfizer. This committee wielded an extraordinary influence in the trade negotiations, and in the end, managed to turn their private corporate goals into a uniform global law that is applied and enforced in every WTO member state. TRIPS Plus further sought to impose the capture of pharmaceutical clinical data into a transnationally streamlined patent right. Although the People’s Vaccine alliance demands “No ‘return to Normal’”, the global intellectual property system hums on and is working as it ‘normally’ does, even in pandemic times. Two of the biggest patent offices worldwide, the US Patent and Trademark Office and the European Patent Office, have offered accelerated examination of patent applications related to Covid-19. Yet they have not made public the contents of these applications.

The only time the majority of pharma IP-owning countries (US, EU, UK, CH) seem to form a united front, despite their internal wrangle over vaccine supply, is when they defend the global intellectual property regime that favours their national pharmaceutical corporations at the WTO. They continue to oppose the TRIPS waiver proposal initiated by South Africa and India in October 2020. Although these positionalities are not new, these attempts to conduct ‘business as usual’ crystallise and bring into sharp vision the processes of capitalisation and unequal distribution of inventions through the legal institutional infrastructure that enacts the transnational patent regime. The divide between IP-capital rich countries and IP-‘renting’ countries, to put it in very simplified terms, is most clearly visually represented in the map that shows which countries are in favour of or against the TRIPS waiver proposal.

I have observed in social media in the last few weeks how the figure of Bill Gates and his outsized power in matters of ‘global’ health via the Gates Foundation have captured and problematised the role of multinational corporate vested interests that aim to preserve the status-quo of IP law-based capitalism. Although the capture of public interest by a dominant philanthrocapitalist actor is hugely problematic, the persona-focused critique should not disregard the international institutional imbalances between private and public interests that had been put in place with the agreement of governments, universities and private corporations. Ishupal Kang (no relation) has written about the problematic nature of the Davos-style World Economic Forum (WEF) global health governance that is also reflected in the pro-IP COVAX scheme. COVAX is often portrayed as the ‘equitable’ distribution mechanism by the press, but it is led by CEPI (Coalition for Epidemic Preparedness) and GAVI (Vaccine Alliance) that have both been launched at the WEF in Davos and derive significant funding and guidance from the Gates Foundation. Commentators in global health, such as Patnaik and Rizvi, have pointed to COVAX’s problematic governance and lack of political and legal accountability. James Love, one of the central figures in the access to knowledge movement, has compiled a list of press reports on Gates’ role in the exclusivity contract awarded to Astra Zeneca by Oxford University for the Covid-19 vaccine production. The controversy around Gates’ role in giving Oxford a list of suggested companies to “team up” with is understandable given that the scientists behind the development of the vaccine, led by Prof. Sarah Gilbert, Oxford University and their spin-off, Vaccitech, wanted to initially open license Covid-19 related university patents. But they were not against patents per se. 

The public attention on what caused delays in the scaling-up of vaccine production is welcome. Yet what the focus on the Gates persona also obfuscates or confuses is the role of Oxford that already had ‘IP’ in the adenovirus vector technology for potential monetisation, and more generally, the increasing private/public nature of university science in which scientists act as scientist-entrepreneurs who are key actors in intellectual property-driven capitalism. It also downplays AstraZeneca’s insistence on exclusivity by promising more than it could deliver despite its relative lack of experience in vaccine manufacturing. It furthermore distracts focus from the UK government’s willingness to go along with AstraZeneca’s wishes despite its own public subsidy of over £1bn. The privatisation of the UK government and its modus operandi is vividly portrayed in the story of the state acting as the enabler and user of a venture capitalist’s network of informal ‘dial the number and have a chat’ sociality, which portrays Kate Bingham, “the vaccine tsar”, as a nimble operator who believes that she is removed from “politics”. 

The entangled issue of public vaccine subsidy, ensuing distribution, and private intellectual property right raises the fundamental question of a government’s duty to the publics and who these publics include and exclude.  Modern intellectual property law has been justified by a rhetoric of individual reward of a monopoly that is supposed to also serve the public good. In light of the transnational nature of intellectual property rights, in particular patent rights, the notion of the public is no longer a national one, but a global one. There is no logical reason why patent law’s grant of monopoly power cannot be curtailed, if its public purpose is not fulfilled. This can happen through national arrangements of compulsory licensing for public emergency use, but also more pragmatically and systematically through a general TRIPS waiver on Covid-19-related know-how and inventions. This would clearly reconceive the ‘public’ in intellectual property law’s narrative as a ‘global public’. 

The C-TAP scheme as initiated by Costa Rica in March 2020 would also be a mechanism through which knowledge, IP and data could be shared by, for example, pooling existing relevant patents. C-TAP is not against IP in the sense that the patents would be revoked; but it proposes open licenses for Covid-19 related technologies. The standard pharmaceutical industry’s response has been that the technologies involved in the current crop of vaccines are new (adenovirus and mRNA technologies) and that it takes more than the patent ‘recipe’ to replicate them. Even if that is not untrue, bearing in mind the physical material requirements of the different vaccines’ production, it is a weak argument because technology transfer and licenses have already been successful, as the AZ/Ox vaccine’s licensees have successfully proven. So the same manufacturing capacity can be built again at multiple locations and facilities. And although production cannot begin overnight (five months in the case of Pfizer/BioNTech’s January agreement with Sanofi), it can be done and needs to be done as soon as possible, unless the pharmaceutical companies have an interest in suppressing the supply, which is an assumption and narrative they might want to avoid. 

Sharing ‘IP’ in the present situation involves more than the publication of patent applications because the patent documents are often incomplete ‘recipes’. It would involve material and immaterial knowledge-sharing for creating manufacturing capacity for the present and future pandemics. What is at stake – more than the current crystallisation of concerns around Covid-19-related patent rights – is a battle against nationalistic intellectual capitalism, which is no longer national or international, but builds upon a transnational legal structure that allows for the capitalisation of products of knowledge.  In the present TRIPS constellation, intellectual property law has enabled the assetisation (financial and other kinds) of inventions and the legal form of patent through its global information infrastructure. Thinking back of the crucial role that know-how and technology transfer via inter-company agreements have played in historically low-income countries (for example, the industrialisation of S. Korea after the devastation of Japanese colonialism and the Cold War proxy war), the present battle at the WTO around intellectual property rights reflects the high stakes of knowledge-sharing that goes beyond the production of Covid-19 vaccine. Hajoon Chang has written on the ‘developmental’ inequities in the history of global free trade. In the present constellation of financial capitalism, companies consider what is in it for them when they share know-how (for example, Pfizer/BioNTech have chosen to keep vaccine information secret; BioNTech has previous patents in mRNA technology). As it is clear that they already have a pipeline of “durable business” set in place, there is no advantage for them in sharing the know-how. 

Unless governments reconsider which publics they serve for the duration of the current pandemic and regulate their national pharmaceutical ‘champions’ by mandating open licenses and a ceiling of maximum profit margin, these companies have little incentive to serve the global public when facing the prospect of dominating a global market that is worth $15bn in terms of Pfizer’s projected 2021 vaccine revenues alone. Pfizer expects 20% of pre-tax profit margin on its Covid-19 vaccine for 2021. Although AstraZeneca has promised to price the vaccine “at cost”, it projects an additional approx. 20% margin on top. This margin may not be very high for the industry, but it makes a material difference in the affordability of the vaccine for lower-income countries. Also, the vaccine price can vary between different production sites and suppliers. For example, South Africa has paid 2.5 times the price of the European Union for its supply of the AstraZeneca vaccine from India’s Serum Institute. I have not seen the evidence of the profit margin that Serum Institute is making. The injustice of a less wealthy country paying a higher price than a wealthy one is compounded by the fact that South Africa had provided trial data for the vaccine and that it has now stopped the vaccine rollout after the publication of preliminary findings of the AstraZeneca vaccine’s limited efficacy in lower to moderate symptoms of the new Covid-19 strain. 

In terms of our everyday lives, what is at stake in the present battle for knowledge-sharing and increasing manufacturing capacity is a prolonged global pandemic in the name of the preservation and further accumulation of intellectual and industrial capital. Global intellectual property law underpins and enables vaccine nationalism that serves neither the national nor the international publics and tips the already skewed scale of global public-private balance even more towards the interests of few private corporations and ‘entrepreneurial’ universities. 

1 Comment

  1. Illuminating, thanks for posting. I have three comments.

    First: technically not all patents confer a monopoly in economic terms. A patent to produce something nobody wants is worthless. A patent is just a property right. Strictly speaking w the vaccine there is some competition between different products. This a minor point.

    Second, the lesson I take from this is that waiving one’s patent rights might not suffice to achieve distributional equity, so then what sort of regulatory system do we need? What other costs are there that might remain even if patent rights were waived?

    Third, and related: another way of reading patent law is that states with a lot of industries that rely on patents subsidise them directly (e.g. funding and buying the medicines) as well as indirectly (e.g. supporting a property regime which funds them). Presumably states have calculated that supporting these industries is necessary for competitiveness etc. Maybe, as is intimated here, there should be a cap on how much can be got. On the other hand, states could subsidise these firms to solve the problem of vaccine shortages by just buying doses to export. why not this rather than changing the patent system?


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