India continues to be on the ‘Priority Watch List’ of the United States Trade Representative (USTR)- Intellectual property (IP) rights

Part of: GS-III- CULTURE (PT-MAINS-PERSONALITY TEST)

While India made “meaningful progress” to enhance IP protection and enforcement in some areas, it did not resolve recent and long-standing challenges, and created new ones, the United States Trade Representative’s report said.

IMP POINTS

India continues to be on the ‘Priority Watch List’ of the United States Trade Representative (USTR) for lack of adequate intellectual property (IP) rights protection and enforcement, the USTR said in its Annual Special 301 Report, released.

1. India remained one of the most challenging economies for IP enforcement and protection, the report said, using language it has used previously.
2. Algeria, Argentina, Chile, China, Indonesia, Russia, Saudi Arabia, Ukraine and Venezuela are also on the Priority Watch List.
3. While India made “meaningful progress” to enhance IP protection and enforcement in some areas over the past year, it did not resolve recent and long-standing challenges, and created new ones, the report said. The same assessment was made in the 2019 report.
4. These long-standing concerns were about innovators being able to receive, maintain and enforce patents particularly in the pharmaceutical sector; concerns over copyright laws not incentivising the creation and commercialisation of content; and an outdated trade secrets framework.
5. “India also further restricted the transparency of information provided on state-issued pharmaceutical manufacturing licenses, continues to apply restrictive patentability criteria to reject pharmaceutical patents, and still has not established 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 pharmaceuticals and certain agricultural chemical products,” the report said.
6. The report also mentioned high customs duties on medical devices and Information and Communications Technology. These goods categories were have been persistent challenges in trade talks between the two countries last year — the language used in the 2020 report in this context is the same as in the 2019 report.

“Despite India’s justifications of limiting IP protections as a way to promote access to technologies, India maintains extremely high customs duties directed to IP-intensive products such as medical devices, pharmaceuticals, Information and Communications Technology (ICT) products, solar energy equipment, and capital goods,” it said.

Online IP enforcement in India has improved, the report said, but progress is undercut by factors including weak enforcement by courts and the police, lack of familiarity with investigative techniques and no centralised IP enforcement agency. The USTR also noted that India was ranked among the top five source economies for fake goods by the Organization of Economic Development and Cooperation (OECD) in 2019.

Not good for online rights

The government’s 2019 draft Copyright Amendment Rules, if implemented, would have “severe” consequences for Internet-content rights holders, the report said, as the proposed rules broadened the scope of compulsory licensing from radio and television broadcasting to online broadcasting.

Trademark counterfeiting levels were “problematic”, the report said and there were “excessive delays” in obtaining trademarks due to a lack of examination quality. The U.S., the report noted, continues to urge India to join the Singapore Treaty on the Law of Trademarks, a treaty that harmonises trademark registration.

Analyis- Priority watch list (Mains shot)

What is priority watch list?

“Priority Watch List” and “Watch List” countries are identified by the annual Special 301 Report. “Priority Watchlist countries” are judged by the USTR as having “serious intellectual property rights deficiencies” that require increased USTR attention. “Watch List” countries have been identified by the USTR as having “serious intellectual property rights deficiencies” but are not yet placed on the “Priority Watchlist”. The USTR can move countries from one list to the other, or remove them from the lists, throughout the year.

Why India is placed under this? (PT SHOT)

Lack of sufficient measurable improvements to its Intellectual Property (IP) framework on long-standing and new challenges, which has negatively affected American right holders over the past year. India remains one of the world’s most challenging major economies with respect to protection and enforcement of IP.

1. Long-standing IP challenges facing US businesses in India include those which make it difficult for innovators to receive and maintain patents in that country, particularly for pharmaceuticals, insufficient enforcement actions, copyright policies that do not properly incentivise the creation and commercialisation of content, and an outdated and insufficient trade secrets legal framework.
2. India also further restricted the transparency of information provided on state-issued pharmaceutical manufacturing licenses, and expanded the application of patentability exceptions to reject pharmaceutical patents.
3. India also missed an opportunity to establish an effective system for protecting against the unfair commercial use, as well as the unauthorised disclosure, of undisclosed test or other data generated to obtain marketing approval for certain agricultural chemical products.
4. Last year it engaged with India to secure meaningful IP reforms on long-standing issues, including patentability criteria, criteria for compulsory licensing and protection against unfair commercial use, as well as unauthorised disclosure, or test of other data generated to obtain marketing approval for pharmaceutical products.

Implications:

1. Countries under priority watch list will be the subject of increased bilateral engagement with the USTR to address Intellectual Property (IP) concerns.
2. USTR would be reviewing the developments against the benchmarks established in the Special 301 action plans for countries that have been on the ‘Priority Watch List’ for multiple years.
3. For countries that fail to address US’ concerns, the USTR will take appropriate actions, such as enforcement actions under Section 301 of the Trade Act or pursuant to World Trade Organisation or other trade agreement dispute settlement procedures, necessary to combat unfair trade practices and to ensure that trading partners follow through with their international commitments.

What needs to be done- demands by USTR?

To maintain the integrity and predictability of IP systems, governments should use compulsory licenses only in extremely limited circumstances and after making every effort to obtain authorisation from the patent owner on reasonable commercial terms and conditions.

Such licenses should not be used as a tool to implement industrial policy, including providing advantages to domestic companies, or as undue leverage in pricing negotiations between governments and right holders. It is also critical that foreign governments ensure transparency and due process in any actions related to compulsory licenses. India has yet to take steps to address long-standing patent issues that affect innovative industries.