Editorials, GS-3, Indian Economy, Uncategorized

‘Make in India’ not at cost of IPR: US

The US Trade Representative’s annual Special 301 report, that identifies trade barriers to U.S. companies and products due to a foreign government’s intellectual property regime, has placed India on the Priority Watch List, the same as last year.

What is special 301 report?

Under Section 301 of US Trade Act, the office of US Trade representative (USTR) prepares a list of countries whose Intellectual property right regime (IPR) has negative impact on American products. Among such countries, special attention given to two groups:

Priority watch list countries Priority foreign countries
USA uses “carrot” policy to incentivize IPR reforms e.g. funding, training, capacity building, bilateral exchanges and conferences. “sticks” policy to force IPR reforms e.g. putting trade sanctions, approaching WTO dispute resolution.

Why is India kept in the Priority Watch list, in this report?

India is kept in Priority watchlist because

  • Report has raised multiple concerns, particularly related to the potential erosion in IP standards due to its push for promoting domestic manufacturing.
  • It  is concerned about actions and policies in India that appear to favour local manufacturing or Indian IPR owners.
  • According to the report,  India has not taken the opportunity to address long-standing and systemic deficiencies in its IPR regime and has endorsed problematic policies.
  • It said India was the source of a lot of pirated and counterfeit goods reaching the U.S shores.
  • It has asked for clarity from the Government of India regarding the compulsory license decision-making process, as it affects U.S. stakeholders.
  • India doesn’t have separate Anti-Camcording law to combat video piracy.
  • India doesn’t have special takedown procedures against piracy websites.
  • India is the top supplier of counterfeit pharmaceuticals to USA. Patent holder lose billions of dollar each year due to counterfeit / pirated products.
  • Thus, India’s IPR regime is not conductive for innovation by foreigners- at least in USTR’s interpretation, hence put under “Priority watch list” of Special 301 report

Compulsory Licencing

  • Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner.
  • It is one of the flexibilities on patent protection included in the WTO’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.
  • The compulsory licensing provision arms the government with the power to ensure that medicines are available to patients at affordable rates and has so far been used in Brazil, Thailand and South Africa.
  • It gives the government the right to allow a generic drugmaker to sell copycat versions of patented drugs under certain conditions, without the consent of the patent owner.
  • The TRIPS Agreement does not specifically list the reasons that might be used to justify compulsory licensing.
  • However, the Doha Declaration on TRIPS and Public Health confirms that countries are free to determine the grounds for granting compulsory licences.

Stand of the Indian Government

  • The government of India does not engage with the process as it considers it an infringement on the country’s sovereignty.
  • Indian official sources pointed out that the categorisation is arbitrary and mostly a political decision, in order to reward or punish a target country.

How does India fare with respect to its competitors?

China too is in Priority Watch List  whereas Pakistan is in Watch List,  as according to the report Pakistan  has shown sufficient improvement in IP protection and enforcement.

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