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Why India shouldn't bow down to US pressure on legitimate IPR flexibilities

India has been clubbed along with countries such as Algeria, Argentina, Chile, China, Indonesia, Kuwait, Russia, Saudi Arabia, Ukraine and Venezuela in the USTR Priority Watch List.

April 28, 2019 / 12:26 PM IST

The US government in the past week retained India on the “priority watch list" for its alleged poor enforcement of intellectual property (IP) regulations.

The US Trade Representative (USTR) alleged India's inclusion for lack of sufficient measurable improvements to its IP framework on long-standing and new challenges that have negatively affected US right holders over the past year.

"Long-standing IP challenges facing US businesses in India include those which make it difficult for innovators to receive and maintain patents in India, particularly for pharmaceuticals, insufficient enforcement actions, copyright policies that do not properly incentivize the creation and commercialization of content, and an outdated and insufficient trade secrets legal framework," USTR said in its report.

"In addition to these long-standing concerns, India also further restricted the transparency of information provided on state-issued pharmaceutical manufacturing licenses, expanded the application of patentability exceptions to reject pharmaceutical patents, and missed an opportunity to establish an effective system for protecting against the unfair commercial use, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for certain agricultural chemical products," the report added.

The USTR report also castigates India on counterfeit medicines. It says that China and India are reportedly leading sources of counterfeit medicines distributed globally, and up to 20 percent of drugs sold in the Indian market are counterfeit and could represent a serious threat to patient health and safety.


India was clubbed along with other countries such as Algeria, Argentina, Chile, China, Indonesia, Kuwait, Russia, Saudi Arabia, Ukraine and Venezuela in the Priority Watch List.

The USTR's Special 301 report is a Congressionally-mandated annual report that has been issued every year beginning 1989. It identifies trade barriers to US companies and products in foreign shores due to the host country's intellectual property laws, including trademarks, patents, copyright and trade secrets.

The US government exerts pressure on countries on its watch list to address both emerging and continuing concerns and reviews the list annually based on public hearings. The countries that continue to fail were put on priority foreign country category that mandates the US government to impose unilateral trade sanctions.

US already told India about withdrawing zero tariffs on certain imported goods like pharmaceuticals. India enjoys certain trade benefits filed under the Generalised System of Preferences (GSP), which is a preferential tariff system extended by developed nations to developing countries. India exported about $5 billion worth of pharmaceuticals.

Pressure tactics

Well US government does acknowledge the fact that over the past year, India took steps to address IP challenges and promote IP protection and enforcement. But it further states that many of the actions have not yet translated into concrete benefits for innovators and creators, and long-standing deficiencies persist.

Counterfeit goods and piracy, have to be controlled, as it harms the health, economy and reputation of the nation. But the other major grounds named in the report for inclusion such as patentability criteria, compulsory licensing criteria and data exclusivity, are pressure tactics on India to dilute hard fought legitimate flexibilities to protect public health.

In 2005, India amended its Patents Act, 1970 to introduce product patents in line with Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, disbanding its liberal patent regime that only identified process patents. Its patent regime is in line with global trade rules, further dilution means compromising on public health.

We have already argued here India's predicament at controlling spiralling costs of patented cancer medicines.

India’s patent and drug regulatory laws and policies have helped to protect price-lowering generic competition, so much so that the country is known as the "pharmacy of the developing world" because it supplies affordable quality generic medicines globally.

Medecins Sans Frontieres (MSF), the Paris-based non-profit organization that provides international medical humanitarian services alleges that placing India is at the behest of US's powerful pharmaceutical industry that's demanding more stringent intellectual property standards and enforcement in third world countries to undermine their competitors.

"Such pressure violates the integrity and legitimacy of the system of legal rights and flexibilities created by the TRIPs Agreement, as reaffirmed by the Doha Declaration for the World Trade Organisation members to meet their rights and public health obligations," MSF said.
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Apr 28, 2019 12:26 pm

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