Jenny Peng is an IP Innovation Clinic Fellow and a 2L JD Candidate at Osgoode Hall Law School. This article was written as a requirement for Prof. Pina D’Agostino’s Directed Reading: IP Innovation Program course.
In an age of increasing globalization, the ripple effect of a single event resulting in unintended consequences is nothing new. Amidst the ongoing Russia-Ukraine conflict, the Russian government has recently announced a series of measures related to IP rights and payments in response to sanctions from foreign governments and corporations. One such measure was a decree on March 6, 2022, which stated that patent holders of foreign countries that commit unfriendly actions against Russia would be subjected to a compulsory licence of their inventions, utility models and industrial designs with 0% royalty to the owner of the intellectual property.
What is compulsory licencing?
Compulsory licencing is when a government permits another party to produce a patented product without the consent of the patent owner.
Under the World Trade Organization (WTO)’s Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”), compulsory licencing is a flexibility in the field of patent protection. TRIPS Article 31 – “Other Use Without Authorization of the Right Holder” lists out conditions under which a compulsory licence may be granted, and specifically under Article 31(b), member nations are allowed to do so “in the case of a national emergency or other circumstances of extreme urgency”. The Doha Declaration on TRIPS has further loosened this provision and confirmed that “each member [nation of the WTO] has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted”.
What does this mean in the current context of the world?
In most cases, compulsory licences are granted to meet the demand for a patented product in a domestic market. During a global health crisis, compulsory licences would facilitate knowledge sharing across nations and maximize efficiency in R&D and production.
Since October 2020, India and South Africa have led the proposal for a TRIPS Waiver that would temporarily suspend IP protection on medical products required to treat COVID-19. Fast forward to present day, these talks are still ongoing with no resolution to be reached between the push for scaling up production and increasing access to critical medicines on one side of the table, and the desire to protect intellectual property on the basis of sufficient production on the other.
Russia’s compulsory licence policy seems to be a direct response to international sanctions, and while it does not particularly target the pharmaceutical industry, this decision has certainly affected discussions of the COVID TRIPS Waiver. International cooperation is weakening, and Russia has set an example of its own national enforcement of compulsory licencing. As events continue to unfold, the “emergency” context surrounding compulsory licencing will likely continue to be a source of ambiguity and a point of debate.