Thank you very much, Madam Chairperson.
I am a partner at Norton Rose Fulbright in Montreal, where I am the pharmaceutical and life sciences international business group leader.
I specialize in patent litigation for pharmaceuticals and medical devices, so I have a perspective on how IP rights holders view and enforce their rights, both in Canada and internationally.
The views I express today are my own and do not necessarily represent the views of Norton Rose Fulbright.
I'm going to talk a little bit about supply chains and domestic manufacturing and what the implications are for Canada in light of the COVID-19 pandemic. I will talk briefly about some of the controls that already exist in Canada over patents, including compulsory licensing, and then talk a little bit more about the intellectual property context internationally with respect to certain of Canada's international trade agreements. I'll speak to some of the enforcement mechanisms that are available under those agreements, and then I will deal specifically with the issue of the TRIPS waiver.
As all of us know, manufacturing of many goods has shifted over the last decades to locations that offer economies of scale, lower costs, or more favourable tax and regulatory regimes. Medical goods are no exception. For example, China and India have become major manufacturers of active pharmaceutical ingredients and finished dosage forms in the last decades.
Medical devices and personal protective equipment are often manufactured abroad. As Mr. Agnew mentioned in his presentation, and as we have seen over the last year, we've learned a lot from COVID-19. We've seen procurement delays and competition for scarce supplies. We've seen hoarding or export restrictions by some countries, and we've seen political interference in supply agreements.
That leads to the question, which I think we've begun to answer over the last 13 months, of whether Canada should increase domestic production of certain medical necessities, particularly those that are related to COVID-19. In many cases the answer is clearly “yes”. Personal protective equipment, for example, will be essential in this and future pandemics, and we should maintain adequate stocks and have domestic sources of supply.
When we talk about medicines, vaccines and medical devices, the answer is less clear. It is impractical to have a completely domestic supply chain; there are simply too many drugs, too many components, and too many devices.
As we've seen, and as Mr. Sorenson explained, some of the vaccines that are available today use cutting-edge technology that is available in very few places. Nonetheless, domestic R and D and vaccine manufacturing capacity is crucial for our country.
In a paper that I published with some colleagues late last year, and which I believe led to my being invited to speak today, we proposed a hybrid solution that would allow regional supply chains for advanced complex supplies. This would allow us to retain efficiencies of scale. It would also allow us to take advantage of trade agreements that we already have in place, such as those with the European Union and with the United States and Mexico. In those circumstances, we would be dealing with trading partners that have comparable environmental, safety and labour standards, and standards that are often enforced by these international trade agreements. We generally share values and similar political systems with these trading partners.
In concert with this regional approach, we would continue to develop a reliable domestic supply for essentials, such as personal protective equipment and vaccines. We all know about the manufacture of N95 masks in Canada by 3M, as well as the recent agreement with Sanofi for vaccine manufacturing capacity in Canada. Those are good examples of encouraging domestic supply, and the government can, and should, continue to encourage innovative Canadian companies in this area as well.
With respect to intellectual property, it's not only medicines and vaccines that can be patented. Medical devices and personal protective equipment can also be patented, and this is the complication that would make the TRIPS waiver very difficult to bring into practice even if it were a good idea, and I'll suggest later that it is not. Encouraging domestic supply requires respecting the rights of intellectual property holders, and particularly patent holders. Patents are the most relevant type of IP protection in this area.
As you probably know, there are already compulsory measures in place under the Patent Act, and it's possible for compulsory licences to be granted in cases of a national emergency. One of the problems is that it's not clear what a national emergency is.
It's also not clear under the Patent Act how patent owners would be compensated in such cases. Section 19.4 of the Patent Act was implemented last March at the beginning of the pandemic. It authorized the commissioner of patents to permit the use of patented inventions, including by private parties, to the extent necessary to respond to the public health emergency. It provided that patentees were to be paid “adequate remuneration”. This expired in September of last year, and it was never used.
That is illustrative of the fact that allowing intellectual property rights to be overridden is not a good idea, and we've seen over the past year that it is not necessary, at least in the Canadian context.
Canada is signatory to several international agreements, such as CUSMA and CETA. Both of these, and TRIPS, allow governments to permit use of patented inventions in national emergencies without the patentee's authorization. Again, there's no clear definition over what constitutes a national emergency, and one country's unilateral declaration of a national emergency could invite complaints or retaliations by other treaty members.
That brings me to the specific TRIPS waiver request. As we know, some WTO members have requested a temporary waiver of TRIPS intellectual property obligations in response to COVID-19. In my view, there are multiple problems with this request.
First of all, and as Mr. Agnew mentioned, we're unaware of any concrete examples that would justify such as waiver. The original proposal, which you can find on the WTO website, cites one example, involving the Governor of Kentucky and N95 masks, from April of last year. That's the only example I saw on the WTO website.
The request also asks for a very broad exemption to sections 1, 4, 5 and 7 of TRIPS Part II. Again, there is no evidence that IP rights have impeded the international response to COVID-19.
One other point, one that has not been touched on, is that even if one were to try to implement this type of waiver, there is no practical way to identify individual patents that relate to fighting COVID-19. Many people have focused on vaccines, for example, but let's look at another important tool in fighting COVID-19, a medical device such as a ventilator. Ventilators per se are not patented. What is patented are certain functions that those devices perform, or components that are incorporated within them. These patents could be owned by the manufacturer of the ventilator, by related companies or even by independent suppliers. The ventilator manufacturer may purchase patented components from third parties or manufacture them under licence. There's no easy way to determine what patents are relevant, and, as I said, this is a wholesale renunciation or waiver of patent rights for an indeterminate period. There's no guarantee that this measure would increase manufacturing capacity, strengthen supply chains or improve distribution to less wealthy countries.
There is also the risk that widespread disregard of IP rights could lead to inferior quality products entering the market and even facilitate counterfeit products entering the international supply chain. Rights holders can and often do license their technology to trusted companies, and they're able to enforce strict quality control. In my view, that's a better solution than a wholesale waiver of intellectual property rights.
Those are my remarks, and I look forward to any questions you may have.
Thank you very much.