Context: The US has placed India on the ‘priority watch list’ of the US Trade Representative. The annual Special 301 Report states that India remains one of the world’s most challenging major economies with respect to protection and enforcement of intellectual property rights.
Relevance of the topic:
Prelims: Special 301 Report of United States Trade Representative.
Mains: Issues related to IPR Protection in India.
Special 301 Report of United States Trade Representative
- Each year, the Office of the United States Trade Representative (USTR) conducts a review to identify countries that:
- deny adequate and effective protection of intellectual property (IP) rights.
- deny fair and equitable market access to the U.S.
- Based on this review, USTR, identifies countries as Priority Foreign Countries or places them on the Priority Watch List.
- Priority Foreign Countries: Countries whose acts, policies, or practices have the greatest adverse impact (actual or potential) on relevant U.S. products.
- Priority Watch List indicates that problems exist in that country with respect to IP protection, enforcement, or market access for U.S. persons relying on IP.
Reasons for placing India on the Priority Watch List
- High customs duties directed to IP-intensive products such as information and communications technology (ICT) products, solar energy equipment, medical devices, pharmaceuticals, and capital goods. This is viewed as denying fair and equitable market access to the US.
- Delay in granting patents: Lengthy patent examination process in India can lead to long waiting periods to receive patent grants and have excessive reporting requirements. This discourages innovation and investment, particularly for technology-driven industries.
- Weak enforcement of IPR: Despite having a Copyright Act, there is widespread piracy of copyrighted materials. Stakeholders have reported continuing problems with unauthorised file sharing of video games, signal theft by cable operators, commercial-scale photocopying and unauthorised reprints of academic books, and circumvention of technological protection measures etc.
- Threat of patent revocations and the procedural and discretionary invocation of patentability criteria under the Indian Patents Act impact companies across different sectors.
- Insufficient legal means to protect Trade Secrets in India.
Other Issues highlighted by the US
- Compulsory Licensing:
- Provision under the Indian Patent Act, 1970, that allows the government to grant licenses to third parties to produce, use, or sell a patented invention without the consent of the patent holder. E.g., In 2012, India granted its first compulsory license to Natco Pharma to produce a generic version of a cancer drug, Sorafenib, which was patented by Bayer. The decision aimed to increase access and affordability to the cancer drug in the country.
- However, compulsory licensing is viewed by the US and other countries as against the interest of their companies.
- Evergreening of Patents:
- Section 3(d) of the Patents Act, 1970 states that the mere discovery of a new form of a known substance that does not result in increased efficacy or the use of a known process with insignificant changes, may not be considered patentable. It aims to ensure that patents are granted only for genuinely innovative and significant inventions.
- However, determining whether a modification or improvement qualifies as a substantial enhancement of efficacy can be subjective and prone to legal disputes.
While steps to improve IP Office operations and procedures have shown some progress, India’s overall IP enforcement remains inadequate.
Also Read: Revamping India’s Intellectual Property Rights Ecosystem