Thursday, 1 May 2014

US defers decision on downgrading of India's intellectual property regime

NEW DELHI: The United States on Wednesday deferred decision on India's intellectual property regime, providing partial relief from the much anticipated downgrade that could have led to trade sanctions against the country.

The US Trade Representative (USTR) would now conduct an 'out of cycle' review for India's case later this year.

ET had on Wednesday cited this as the first and the most likely possibility for the US to adopt, in the backdrop of ongoing elections in India.


The USTR reviewing whether India's intellectual property environment has deteriorated enough to warrant a label of 'priority foreign country', a label which could trigger American trade sanctions against India.

The prospect of engaging with a new political establishment, which may have fresh takes on many contentious issues raised by the US government may have prompted it to adopt a 'wait and watch' approach. However the US TR has not minced words in harshly attacking a series of recent  patent related policy moves and legal pronouncements here.

The US trade government agency held that 'IP protection and enforcement challenges are growing, and there are serious questions regarding the future of the innovation climate in India across multiple sectors and disciplines'.

In the pharmaceutical sector and increasingly in other sectors, such as the agro-chemicals and green technology sectors, some innovators face serious challenges in securing and enforcing patents in India, said US' special 301 report which grades select countries on what it thinks have defaulted in providing IP protection. 

On the expected lines, the US TR is sharply critical of India's judicial and subsequent policy interpretation of section 3(d), which aims to sieve out frivolous patents and thwart attempts of 'evergreening' of patents and compulsory licensing .

The report says that section 3(d) may be setting different standards for patenting different 'inventions', by setting a higher threshold for drugs. India's interpretation could limit the patentability of potentially beneficial innovations such as .. as drugs with fewer side effects, decreased toxicity, improved delivery systems, or temperature or storage stability and those innovations which enjoy patent protection in other countries, the report said.

The US would monitor developments around compulsory licensing of patents in India. Seeking greater transparency on current 'inter-ministerial process that is considering over a dozen patented medicines as candidates for government- initiated compulsory licenses', US has urged India to o take inputs from innovators in such matter.

It has also expressed concern over India promoting compulsory licensing in its National Manufacturing Policy as a tool for government entities to implement technology transfer in the clean energy sector.

By allowing opposition of patent before and after the grant, India allows applications to be tied up in costly challenge proceedings for years. The patent term for innovator begins from the application filing date, thus impeding an  .applicant's ability to make investments and conduct business, US feels.

It has also demanded data protection for pharma innovator firms without which it cribs 'companies in India reportedly are able to copy certain pharmaceutical products and seek immediate government approval for marketing based on the original developer's data'.

Online piracy in India, which has the third largest userbase worldwide at 120 million users and the rampant practice of video piracy through camcording disturbs US.

US Chamber of commerce, which has been lobbying for pressure on India, welcomed the decision.

"We are encouraged that USTR recognizes the growing concerns with India's deteriorating IP environment, and support the decision to initiate an 'out-of-cycle' review of India. We hope that this step will generate much needed dialogue for the US and Indian governments to address the concerns identified in the Report. We look forward to working with the next Government of India to promote a robust IP climate" said US Chamber of Commerce's Global Intellectual Property Center (GIPC) Executive Vice President Mark Elliot. 


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