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US places India on 'Priority Watch List' for Intellectual Property protection

Long-standing IP challenges facing US businesses in India include those which make it difficult for innovators to receive, maintain, and enforce patents in India, particularly for pharmaceuticals.

Published: 29th April 2020 11:16 PM  |   Last Updated: 29th April 2020 11:16 PM   |  A+A-

US Trade Representative Robert Lighthizer

US Trade Representative Robert Lighthizer (File Photo | AFP)

By PTI

WASHINGTON: The US on Wednesday placed India on the 'Priority Watch List' for lack of sufficient measurable improvements to its Intellectual Property framework on the "long-standing" and "new challenges" that have negatively affected American right holders over the past year.

The US placed 10 countries, including some of its major trading partners like India and China, on the list, alleging that enforcement of the intellectual properties have deteriorated or remained at inadequate levels and the Americans who rely on their protection have difficulty with fair and equitable market access.

The countries placed on the list by the Trump administration on Intellectual Property (IP) related issues are Algeria, Argentina, Chile, China, India, Indonesia, Russia, Saudi Arabia, Ukraine and Venezuela. Kuwait has been removed from the last year's list that included 11 countries. And in 2019, the US had removed Canada and Thailand from the list.

"The Trump administration is committed to holding intellectual property rights violators accountable and to ensuring that American innovators and creators have a full and fair opportunity to use and profit from their work," said US Trade Representative (USTR) Robert Lighthizer after the release of annual Special 301 Report on the adequacy and effectiveness of trading partners' protection of IP rights.

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Barbados, Bolivia, Brazil, Canada, Colombia, Dominican Republic, Ecuador, Egypt, Guatemala, Kuwait, Lebanon, Mexico, Pakistan, Paraguay, Peru, Romania, Thailand, Trinidad & Tobago, Turkey, Turkmenistan, the United Arab Emirates, Uzbekistan and Vietnam have been placed on the Watch List.

In its report, the USTR said that India had been placed on the 'Priority Watch List' for lack of sufficient measurable improvements to its IP framework on the "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, maintain, and enforce patents in India, particularly for pharmaceuticals; ineffectual enforcement activities, copyright policies that fail to incentivise the creation and commercialisation of content, and an outdated and insufficient trade secrets legal framework, it said.

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, it said.

And, it still has not established 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 pharmaceuticals and certain agricultural chemical products, the USTR claimed.

It said China's continued placement on the Priority Watch List reflected US' concerns with Beijing's system of pressuring and coercing technology transfer.

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And the continued need for fundamental structural changes to strengthen IP protection and enforcement, including as to trade secret theft, obstacles to protecting trademarks, online piracy and counterfeiting, the high-volume manufacturing and export of counterfeit goods, and impediments to pharmaceutical innovation, it said.

In its report, the USTR said that over the past year, India has been inconsistent in its progress on IP protection and enforcement. The report said that while India's enforcement of IP in the online sphere has gradually improved, a lack of concrete benefits for innovators and creators persists, which continues to undermine their efforts.

It said that India remains one of the world's most challenging major economies with respect to protection and enforcement of IP. Patent issues continue to be of particular concern in India as longstanding issues remain for innovative industries, it said.

The USTR said that the potential threat of compulsory licenses and patent revocations, and the narrow patentability criteria under the India Patents Act, burden companies across different sectors. "Moreover, patent applicants continue to confront costly and time-consuming pre and post-grant oppositions, long waiting periods to receive patent approval, and excessive reporting requirements," it added.

The USTR said that in the pharmaceutical sector, Section 3(d) of the India Patents Act remained problematic. One implication of its restriction on patent-eligible subject matter is the failure to incentivise innovation that would lead to the development of improvements with benefits for Indian patients.

India still lacks an effective system for notifying interested parties of marketing approvals for follow-on pharmaceuticals, which would allow for the early resolution of potential patent disputes, it said.

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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 products, solar energy equipment, and capital goods, it said.

Noting that the levels of trademark counterfeiting continue to remain problematic, the USTR said the US brand owners continue to report excessive delays in obtaining trademarks and a lack of quality in examination. "The United States intends to continue to engage with India on IP matters, including through the US-India Trade Policy Forum's Intellectual Property Working Group," the report said.

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