TRIPS Waiver and COVID-19 Policy
As COVID continues to impact nations across the world, policymakers are left trying to facilitate ways to better deal with a global event of this magnitude. Public health concerns forced leaders to re-think current laws and agreements. Intellectual property law is not an outlier. To mitigate some of the effects of the pandemic, some countries have tried to waive certain intellectual property rights for knowledge sharing. In October of 2020, for instance, India and South Africa proposed a TRIPS waiver related to the COVID-19 pandemic, which sparked a global debate around balancing intellectual property rights and managing a global health crisis.
Countries that are members of the WTO have all signed agreements related to trade and intellectual property protection–this agreement is the TRIPS agreement. Governments that have agreed to this TRIPS agreement can bring waivers, such as the one proposed now, in times when they believe the public good may be better served without certain IP protections. The idea is that waiving certain obligations pertaining to either patents related to COVID-19 related inventions or discoveries would allow greater access to COVID-19 vaccines and drugs. India and South Africa’s proposal was amended in May of 2021, with the support of 60 low-income countries. The main amendment was the addition of a clause that limited the waiver to cover a period of three years. The waiver would cover “health products and technologies, including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture for the prevention, treatment, or containment of COVID-19.”
Support for this waiver has expanded to more countries, including China, but notably it did not receive initial backing from the U.S. The U.S. has historically been opposed to such intellectual property waivers. However, on May 5, 2021, the Biden Administration released a statement in support for a TRIPS waiver for COVID-19 vaccines, specifically. It stated, “The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines.”
More than a year after India and South Africa’s initial TRIPS proposal, discussions continue among WTO nations, but no agreement has been reached. Countries like Germany, Switzerland, Norway, and the UK are standing firm in their objections. Though as of January 2022, roughly 10 billion doses of the COVID-19 vaccine have been administered, Our World in Data reports that only 10% of people in low-income countries have received at least one dose.
Would Climate Change Fit Under a TRIPS Waiver?
If a TRIPS waiver cannot be approved for something as global and life-threatening as the COVID-19 pandemic, can a TRIPS waiver ever be approved for something else? In the face of impending climate change, for example, could a TRIPS waiver be effective in the sharing and access of climate technologies, much as a COVID-19 waiver would be effective in sharing technologies related to the pandemic?
Simply put, yes. Climate change could be similarly categorized as a type of disaster that could be noted in a TRIPS waiver proposal to temporarily waive intellectual property rights, specifically patent protections. However, at this point, a TRIPS waiver for climate change has not been formally proposed.
Possibility of Extended TRIPS Waiver to Combat Climate Change
Just as with the COVID-19 pandemic, low-income countries are likely to suffer the most from climate change. Like with COVID-19 relief, knowledge sharing of climate change technologies may be needed and desired. A TRIPS waiver could promote “technology transfer” related to climate change, which in turn could promote access to climate technologies, especially in low-income countries. This sharing of knowledge would ideally lead to developments in climate technology and further access around the world.
However, opponents to TRIPS waivers state that without intellectual property protections, inventors are not sufficiently incentivized to continue to create new technologies. It is argued that stripping away financial incentives would hinder the development of climate technology and that the TRIPS agreement is in place primarily to guard those property rights of patent, copyright, and trademark owners. To secure a TRIPS waiver for climate change technologies, approval would be needed from many different countries. Low-income countries would potentially be more willing to sign on to this type of waiver, as evidenced by their support of the COVID-19 waiver. As has been the case with other proposed waivers, it will potentially be difficult to influence higher-income countries like the United States. Yet, since the Biden administration has supported a limited, temporary COVID-19 waiver, perhaps this administration or future administrations would support similar proposals relating to climate change.
Other high-income countries would need to sign on for the waiver to be effective and lead to knowledge sharing. As James Bacchus emphasizes in his report for a WTO climate waiver, being able to secure such a waiver will fall on the political persuasion of countries who hold the most power. It will take the persuasion of these countries in convincing the WTO that this type of waiver is necessary to battle the potential destruction of climate change. Drafting a climate change waiver and waiving certain intellectual property rights temporarily to create knowledge sharing of climate technologies would be the easy part of this venture. Getting the necessary support from countries who have the most power would be much harder.
Alternate Routes of Knowledge Sharing
A TRIPS waiver could allow access to intellectual property, specifically patents, within a timeframe normally unachievable under the current intellectual property regime. But is there another way to increase knowledge sharing, without relying on a TRIPS waiver being passed?
One alternative may be patent pools. The creation of patent pools has improved access to public health when intellectual property laws may have previously limited knowledge sharing. Patent pools are agreements between patent owners and/or third parties, to license a patent for others to use, create, or make. They work by allowing patent holders to license their patents to a shared pool. Then, manufacturers, developers, and other inventors that are part of this pool can use the rights to make the patented invention at lower costs. The patent holder gets royalties from what is sold, therefore allowing them to still benefit from their work. The Medicines Patent Pool, for example, operates to increase access to HIV treatments. It continues to create lower-cost drugs for those living with HIV/AIDS.
Applying the same idea, a patent pool could be created for climate change related technologies. The benefit of a patent pool is that it would not need broad approval from countries in the WTO, like a TRIPS waiver would need. A patent pool for climate change technologies would instead rely on the licensing of technology from patent holders themselves. Once the patent pool has patents that can be used, manufacturers can start to make and sell these inventions at lower costs, which would hopefully provide more access. The downside to a patent pool solution is that, though licensing patent holders would collect royalties, to make the pool work, all participants would need to agree on the licensing details. This would require that patent holders independently make the decision to share knowledge on their own and then agree with the other patent holders in the group. Without buy in from governments, the patent pool system relies on the goodwill and good faith of individual patent owners.
Ultimately, it would likely be difficult to set in place a TRIPS waiver for climate change technologies, even though such a waiver can be highly effective in promoting knowledge sharing. As a TRIPS waiver has not yet been available for COVID-19 related relief, trying to obtain buy in for a potential crisis that may be slower-paced than COVID-19, like climate change, would be challenging. However, without waiting for sign on from every country, effective knowledge sharing can still take place by adopting alternative plans like patent pools. Because patent owners would still receive royalties and be able to opt-in on their own accord, patent pools may be a particularly effective way to promote the sharing of climate change technologies.
Madeline Thompson is a second year law student at Northwestern Pritzker School of Law.
Gambling, in one way or another, has been part of American life for centuries—early colonists participated in activities such as lotteries, betting on cock fights, and other games of chance. Throughout our history, gambling has remained a source of moral debate. On one hand, it is argued that Americans should be free to use their money how they see fit, and gambling typically consists of ‘harmless’ games. On the other, gambling can become a crippling addiction that leads many to economic hardship and is often tied to corruption and crime. This tension has resulted in a complex regulatory relationship between the government and the gambling industry. Nevertheless, gambling has only grown in popularity over the years and is now a massive industry that generated over 40 billion dollars in revenue in 2019 alone. The United States is now facing even more regulatory complexity as the rise of the internet and cryptocurrencies has rendered the existing regulations largely ineffective.
Throughout American history, regulating gambling has largely been the responsibility of each state. The federal government has taken a back seat role and typically gets involved only to supplement and support state law in the face of interstate gambling.
As with many aspects of modern life, the rise of the internet has quickly and drastically changed the gambling landscape. Online gambling sites began cropping up in the 90s, and people who lived in states where gambling was illegal were suddenly able to sign up online and make bets from anywhere. Even people in states where gambling was legal took advantage of the convenience of online gambling.
Many of these gambling sites were hosted abroad, resulting in the shift of a large portion of potential gambling revenue to offshore operations. Further, these online gambling hubs lacked any regulation and were much more likely to rig odds in their own favor or participate in money laundering schemes.
Finally, in 2006, the federal government deemed it necessary to take a more active role in regulating online gambling and passed The Unlawful Internet Gambling Enforcement Act (UIGEA). The UIGEA did not go so far as to outlaw online gambling. In fact, it didn’t impose any liability on individual online gamblers and included a clarification in its purpose section that emphasized that the Act should not be construed as “altering, limiting, or extending any Federal or State law . . . prohibiting, permitting, or regulating gambling within the United States.” Instead, the Act prohibited businesses from accepting payments from people engaging in any form of illegal online gambling. The main provision reads: “No person engaged in the business of betting or wagering may knowingly accept [any form of payment], in connection with the participation of another person in unlawful Internet gambling.”
In effect, the Act put online gambling purveyors that accept payments from players in the United States in violation of the law unless they are directly authorized by a state and acting in accordance with that state’s laws and all bets or wagers are initiated and received within that singular state. It also prohibited financial institutions from processing any gambling payments.
Naturally, many online gambling sites stopped allowing players in the United States from gambling on their websites to comply with the law. But of course, some online gambling sites remained in operation. Online poker sites, for example, hoped that the vague language of the UIGEA did not cover poker, since poker can be characterized as a game of skill rather than of chance.
In 2011, though, the Department of Justice exercised its first major enforcement of the UIGEA and shut down these online poker sites, while at the same time freezing millions of players’ accounts, many of which held enormous sums of money. Mass chaos ensued. Avid online poker players refer to the date of the shut down as “Black Friday,” and as a result, ‘illegal’ online gambling largely tapered off for several years.
Currently, online gambling is legal in six states: New Jersey, Connecticut, Delaware, Michigan, Pennsylvania, and West Virginia. Gamblers in these states can access and legally gamble on a small selection of state-authorized casino websites. These states have seen massive benefits from the legalization of online gambling. New Jersey, for instance, has generated over $600 million dollars in tax revenue since it first authorized online casinos in 2013.
However, those located in the remaining 44 states where online gambling is illegal were largely out of luck. Recently though, thanks to the rise of individual VPN use and cryptocurrencies, online gambling has had a huge resurgence. But of course, with this resurgence comes new legal implications and gray areas.
A Virtual Private Network (VPN) is a service that allows you to encrypt your data and mask your computer’s IP address when you surf the web. It does so by connecting you to the internet via a secured private server, rather than through your own internet service provider. When using the internet through a VPN, websites you visit do not know your IP address, which normally connects your location and identity to your online activity. Instead, sites only know the IP address of the VPN. VPNs themselves are legal and a valuable way to use the internet while also protecting your personal data. But they also give people the freedom to do things they wouldn’t, or couldn’t, do if their activity were tied to their personal IP address.
American online gamblers have taken to using VPNs located in more gambling friendly countries in order to circumvent online casinos’ bans on American users. However, most of these sites ultimately require users to provide personal information in order to validate users’ identities prior to allowing them to deposit and withdraw funds. This validation step effectively filters out most American online gambling attempts. That is, until the rise of cryptocurrencies.
On a basic level, cryptocurrency is a type of digital money that is encrypted and decentralized. Cryptocurrencies allow users to anonymously participate in transactions without the help of a traditional bank or financial institution. Over the past few years, as cryptocurrencies have gained major traction, online casinos have kept up with the trend and many now accept cryptocurrencies. Some casinos have even cropped up that run exclusively on cryptocurrencies. The anonymous nature of using a cryptocurrency has made it possible for virtually any American, especially if they are masking their IP address with a foreign-based VPN, to gamble online at offshore online casinos that accept cryptocurrency. And not only are they able to do so, but it is virtually risk free.
Since the UIGEA didn’t criminalize the act of online gambling for players, there is currently no federal legal risk for those who choose to skirt location restrictions and gamble on sites that technically are not allowed to operate in the United States. And while some states have laws that make it a misdemeanor to participate in unauthorized gambling, these laws are seldomly enforced and rarely specify the rules surrounding online gambling in particular.
The online “crypto casinos” themselves also face little risk. First, it is not yet established whether cryptocurrencies fall under the definition of ‘payments’ set forth in the UIGEA. And second, cryptocurrencies make it much harder, if not impossible, to trace the physical location origins of payments. Therefore, it is much harder to pin any misconduct on crypto casinos.
Online gambling has recently become even more widespread and has reached younger audiences it otherwise may not have via live streaming on sites such as Twitch. Popular online personalities and influencers have developed a new niche in which they live stream themselves online gambling, most often playing slots, and often for hours on end. Thousands of people tune in to watch them win, or squander away, incredibly large amounts of money. These influencers also often share incentives or bonuses for their viewers to sign up with these online casinos, which opens another can of legal worms given it is unclear whether the streamers are gambling with their own money or have the odds rigged in their favor to draw in more customers. This is on top of the fact that they are influencing people to partake in a legally ambiguous activity (and often they are influencing children to gamble, which is certainly illegal).
There are no signs of the online gambling fad slowing, which leaves the United States in murky waters with respect to the legal and policy implications it raises. Some have suggested that criminalizing the act of online gambling is the only viable solution. Others argue that the UIGEA should be repealed and that online gambling should be legalized and further regulated to make it safer and more fair for American residents, as well as to generate tax revenue. The government will likely need to determine a course of action sooner rather than later to combat the undoubted consequences of unchecked online gambling.
Mari Earhart-Price is a second-year law student at Northwestern Pritzker School of Law.