President Biden and USTR Must Protect America’s IP and Innovative Leadership

By SBE Council at 24 May, 2022, 5:19 pm

The WHO TRIPS waiver sets a dangerous precedent for U.S. innovation. No U.S.-created patent or idea would be safe from the stripping of IP rights, which would be a damaging blow to innovation and entrepreneurship in the U.S. and across the globe.

Waiving IP Rights for COVID Vaccines Undermines U.S. Innovation and Competitiveness

By Karen Kerrigan –

On May 5, 2021 the Biden Administration announced it would support a petition before the World Trade Organization (WTO) to “waive” vital intellectual property (IP) rights for COVID-19 vaccines – an unprecedented and unnecessary giveaway of U.S. medical innovation. The action harms America’s global innovative leadership, and destabilizes the longstanding and critical role the U.S. has played in championing IP rights and protections at home, and across the world.

The Director-General of the WTO has circulated a draft agreement to waive these IP protections – rights and protections that are provided under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). An upcoming WTO Ministerial Conference is scheduled June 12-15, and TRIPS-waiver supporters – such as China and India – are pushing hard for the waiver. These countries, and others, such as Russia, would be given a green light to use compulsory licensing to seize the patents of American-made COVID-19 vaccines.

The IP Giveaway Undermines U.S Jobs, U.S. Innovative Leadership and the U.S. Economy: IP-intensive industries account for $7.8 trillion of U.S. GDP, and IP-related jobs total 63 million.  Worker earnings in IP-intensive industries are 60% higher than other industries. America’s bio-pharmaceutical industry directly and indirectly supports more than 1.4 million jobs, and these firms invest more than $100 billion in the U.S. economy. Small businesses dominate this critical sector, as 78.7% have fewer than 100 employees.

Stripping COVID-19 IP rights harms the U.S. economy, and vastly undermines the President’s pledge to make the U.S. the hub for the world’s “arsenal of vaccines.”

An Alarming Change in U.S. Policy. The Biden Administration’s support for the TRIPS waiver is a shocking change in policy and philosophy. After all, U.S. political leadership and policy actions have consistently focused on advocating for IP rights and protections at home and across the world as a pathway to greater innovation, economic growth, foreign investment, and being foundational to freedom and a vibrant startup ecosystem.

The IP giveaway will not strengthen the global response to defeating COVID-19, but it does plays into the hands of nations who continually work to weaken IP rights and protections.

TAKE ACTION! Please contact your U.S. Senators (find them here) and U.S. House of Representative member (find them here). You can call the Capitol Switchboard at 202-224-3121. Urge them to tell President Biden to end his support for the WHO TRIPS waiver. Urge them to support American IP, and to end the IP giveaway!

VOICES FOR IP: WHAT OTHERS ARE SAYING

Dennis C. Shea, former Deputy U.S. Trade Representative and U.S. Ambassador to the World Trade Organization, Real Clear Policy Op-ed.

“It’s as bad as many international trade experts feared. The waiver would set a dangerous precedent — all in response to a ‘problem’ that doesn’t exist…Scientists, patients, and everyone who believes in the importance of international trade can only hope that the waiver is rejected when it is considered at the upcoming WTO Ministerial Conference in June. A TRIPS waiver would be fraught with negative unintended consequences, starting with the global proliferation of shoddy — and even counterfeit — Covid vaccines. The waiver is nominally restricted to developing nations, but China and Russia won’t hesitate to steal whatever isn’t nailed down.”

“The entire premise of this waiver is simply wrong. Global supply of Covid vaccines is a non-issue today: More than 13 billion doses were manufactured as of March 2022, with billions more expected by year’s end.”

Alliance for U.S. Startups and Inventors for Jobs, Letter to U.S. Commerce Secretary Raimondo and USTR Ambassador Tai:

“The Proposal would allow countries and companies all over the world to gain unfettered access to valuable technology that was developed over the course of many years by American research institutions and companies, often collaborating with the U.S. government, including the Defense Advanced Research Projects Agency. Undercutting these long-term commitments now would, in turn, make it far less likely that scientists, engineers, entrepreneurs and venture capitalists will want to continue investing time and resources to prepare for the next pandemic that surely will come.”

American Intellectual Property Law Association (AIPLA), Intellectual Property Owners Association (IPO), Licensing Executives Society (LES) International, LES USA & Canada, and New York Intellectual Property Association (NYIPLA), Joint Statement:

“We strongly support equitable, widespread and successful distribution of vaccines necessary to meet the challenges of COVID-19. However, the proposal currently being reported incorrectly portrays IP as a barrier to production and supply of COVID19 vaccines. Our organizations know of no evidence to support that IP is such a barrier. In fact, the World Health Organization has stated: ‘[w]ith global vaccine production now at nearly 1.5 billion doses per month, there is enough supply to achieve our targets, provided they are distributed equitably. This is not a supply problem; it’s an allocation problem.’ Solving the allocation problem is best accomplished by focusing on improvements to supply chain and distribution issues, rather than by concentrating on the red herring of intellectual property as an alleged barrier. Intellectual property has been critical to the development of technology that has enabled a global COVID-19 response and it continues to fuel efforts to more effectively distribute vaccines and advance other needed technology. We should not undermine our ability to respond to this and future pandemics.”

Diverse Business Organizations in a Letter to Biden Administration Policy and Trade Officials:

“Unfortunately, some countries have chosen this moment to pursue their longstanding goals to weaken IP rights, including through a problematic proposal at the World Trade Organization to waive IP global protections. Proponents of the waiver have claimed, without evidence, that it would advance public health. In reality, the waiver would undermine the global response to COVID-19 and would not achieve its stated goal to rapidly expand vaccines production.”

U.S. Senator Chris Coons (D-DE), CSIS event:

“If we were to simply open up to the world all of the IP at the core of these groundbreaking developments, I think we would then be at risk of losing the private sector investment and development that’s critical to this moment of personalized medicine, of breakthrough vaccines, of breakthrough medical diagnostics. And I think, frankly, I think the world would suffer as a result. So as I said, I don’t think that waiving IP rights will suddenly enable other countries the ability to ramp up the manufacturing of complex vaccines.”

SBE Council president & CEO Karen Kerrigan and chief economist Raymond Keating:

“Among the reasons why the U.S. leads the world in pharmaceuticals, including on the vaccines front, are our strong IP protections. Undermining property rights means reducing incentives for risk-taking, reining in innovation, and reducing new and improved treatments for existing ailments, as well as for future diseases and pandemics. America cannot lead, either innovatively or on free-enterprise advocacy, if we support this evisceration of IP rights and protections.

“No rationale exists to compromise – or weaken – U.S. intellectual property. Vaccine doses are plentiful and petitioning countries must make internal improvements to strengthen uptake and distribution. We call on the Biden Administration to pull its support for the IP waiver, and reaffirm America’s commitment to strong IP rights and protections and the many positive benefits those protections create.”

Related SBE Council Content:

IP Giveaway by Biden Administration Remains a Bad Idea for U.S. Innovation and Leadership, March 30, 2022.

IP Giveaway by Biden Administration Sets Troubling Precedent for U.S. Innovation and Foundation Freedoms, May 5, 2021.

Vaccines are Saving Small Business, International Business Times Op-ed by Karen Kerrigan, April 4, 2021.

No Intellectual Property Rights, No New Vaccines – Small Business Insider blog, April 1, 2021.

Unleashing Small Business Through IP: The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment (Second Edition), book published by SBE Council, April 2016.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.