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Should companies waive their IP rights for “goodwill”?

On Behalf of | Jun 28, 2022 | Intellectual Property Licensing |

Over the past few years, the idea of free intellectual property licensing or waiving IP rights for goodwill has become a hot topic. This can be for any type of IP license or right, but it is usually for life-saving or medical products.

What is the argument?

The argument usually centers on global health and equity. Specifically, because our world has a huge inequality problem, where first-world countries have access to the vast majority of medical breakthroughs and technologies, they should share those breakthroughs and technologies with the second and third worlds.

Some argue that the easiest and fastest way to do this is to license those IP rights for free to those second and third-world countries to allow them to manufacture those life-savings products locally. This is because, as the current system is set up, as the argument goes, it is broken, and there is no way to fix it, which means those in second- and third-world countries will continue to lose lives.

Does this goodwill argument hold water?

Maybe under limited circumstances, but generally, probably not. There is actually a way, in an emergency, that countries can ask the World Health Organization to temporarily waive a company’s IP rights. It is through the Trade-Related Aspects of Intellectual Property Rights at the WHO.

However, even that waiver process has not been consistent, and it is unfair to expect a country ill-equipped to manufacture cutting-edge medications and technologies locally. It is not just an issue of knowledge, but one of infrastructure as well, which can cause those same breakthroughs to actually kill the people they are meant to help.

Another flaw in the argument

Specifically, while the TRIPS waiver program focuses on IP waivers, none of the popular arguments seem to point to any IP-related barriers to scaling up global manufacturing of many key medical breakthroughs.

Plus, since over 40% of the United State’s GDP is from IP-intensive industries (one-third of America’s workforce), the argument for broad IP waivers for “goodwill’s” sake would need to be definitive, and it just simply is not.

Historically

Historically, the IP waiver argument has not seemed to hold much water either. Nearly every issue cited by proponents is related to distribution and regulatory barriers, not an IP barrier. This is why when Los Angeles, California, companies face public pressure to waive their IP rights, it is seldom the right move.