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GIPC Index And US Special 301 Report: (Ir)relevance For India

Manjusha Tiwari
23 July 2020 2:54 PM GMT
GIPC Index And US Special 301 Report: (Ir)relevance For India

Courtesy : thoughtco

India has made some significant developments in its IP regime. In 2019, India ratified three WIPO treaties namely the Vienna, Nice and Locarno Agreements.[1] India also revised the Patents (Amendments) Rule in 2019[2] by which it allows both Indian and foreign applications to apply for expedited patent examinations.[3] Moreover, an 80% rebate is being provided to start-ups on patent filing fee.[4] India also rolled out National IPR Policy in 2016 and Trademark Rules 2017[5]. India, despite having laws and regulations for intellectual property, does not fare well in the US Special 301 Report and GIPC IP Index 2020. India is ranked 40th out of 53 countries in the International IP Index released by the U.S. Chamber of Commerce Global Intellectual Property Centre (GIPC) . Moreover, India continues to be placed in the 'priority watch' list in the Special 301 Report for "lack of sufficient measurable improvements to its IP framework on long-standing and new challenge which have negatively affected US right-holders."[6] But, in reality, these reports show India in a bad light majorly because India does not cater to their profit-driven interests.

Special 301 Report

The office of the United States Trade Representatives (USTR) releases an annual Special 301 Report under section 182 of the Trade Act, 1974. This report is a result of statutory mandate of annually reviewing "foreign countries that deny adequate and effective protection or deny fair and equitable market access to United States."[7] According to Robert Lighthizer, USTR, the Report conveys to its trading partners that "protection of America's IP rights is the top priority".[8] This report names and shames America's trading partners accordingly. USTR classifies its trading partners as 'priority watch list' and 'watch list' to indicate that some problems exist in the nation in relation to IP enforcement, protection and market access. The US is authorised to develop 'action plans' for each nation that remains on Priority Watch List for a year without keeping in mind that country's needs and interests. Action plan has "benchmarks'' for nations to make them inclined to American's interests. Section 306[9] empowers USTR to observe compliance of the nation with measures like trade actions.

GIPC IP Index

The IP Index is prepared by Pugatch Consilium who has hot-shot clients including big pharma companies.[10] Interests of businessmen is represented in the Index as the US Chamber of Commerce is the world's largest business federation.[11] Therefore, it can be easily said that GIPC is not an academic institution, it is a lobbying group and its entire mandate is to protect American IP interests and it should come as no surprise that the criteria in IP index are designed to reflect how well a country protects American IP interests.[12] Two of the most blatant methodological flaws:

Development quotient- The report acknowledges that income-level of the country affects IP regimes but it itself goes on to compare all economies on the same footing by using the same 'baseline' without considering their income level. This approach is in conflict with WIPO's development agenda that says 'development dimension' is the core aspect of the global IP system.[13]

Indices and Baseline- The index does not give reasons for choosing baselines for most indicators, it goes on to say "Where no adequate baselines are found in international law or treaties, the baseline values are based on what rights holder's view as an appropriate environment and level of protection." The term "adequate" is not defined and thus it is vague and opens the door for keeping it according to "right holder's interest". The narrow approach of ignoring the aspect of 'public interest' and 'interest of competitors' is not consistent with TRIPS.[14] For copyright length indicator, minimum copyright period 95 years is chosen as the baseline instead of 'life of author plus 50 years' as envisaged in TRIPS Agreement.

Some major long-drawn concerns of the US:

Compulsory licensing- Section 84[15] deals with compulsory licensing. It is consistent with the Directive Principles of State Policy as Article 47[16] tells that the primary duty of the State is to improve public health.[17] Granting of compulsory licenses is also in line with the TRIPS Agreement. The Doha Declaration on TRIPS and Public Health[18] says that countries can determine the grounds for granting compulsory licence.[19] India is therefore justified in exercising its right to issue compulsory licenses. Still, there has been no grant of a compulsory license in the last seven years in India and the IPO has maintained a wise and cautious approach in matters of compulsory licenses.[20]

Section 3(d) of The Patents Act, 1970- It is only meant to limit evergreening of patents. In Novartis Ag v Union of India[21], it is held that Section 3(d) prevents ever-greening of patents as it does not allow patents to be granted to inventions involving new forms of a known substance unless it differs significantly with regards to therapeutic efficacy.

Limited participation in international IP treaties - India has scored 2/7 despite being TRIPS compliant. The index does not mention how and why the seven mentioned agreements are a criterion for ranking countries. Most agreements mentioned tend to have provisions that go beyond TRIPS agreement towards TRIPS plus terms. It may be advantageous to multinational pharmaceutical companies, but it is at the cost of the public health in developing economies. Therefore, being a non-signatory to the mentioned agreements is in India's interest and it's not a weakness per se as reported in the Index.

Should India pay heed?


India being a member of WTO has to comply with the TRIPS Agreement and at the same time makes sure that the common man does not suffer. The balancing of two competing interests is to be done. Article 7[22] lays down the objective of the Agreement and mentions that the IP regime should "contribute to the promotion of technological innovation, to the mutual advantage of producers and users in a manner conducive to social and economic welfare, and to a balance of rights and obligations". Article 8[23] reads "Member State's right to legislative enactments protecting public health and nutrition is recognized, provided such measures are consistent with the provisions of the Agreement". Moreover, Para 4 of Doha Declaration says "the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, the Agreement should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all."[24] Keeping this in mind and on a conjoint reading of the same, it is understood that Member states have the rights to interpret the TRIPS Agreement in a manner conducive to their public health concerns. Therefore, it was rightly said by the Commerce and Industry Minister, in Rajya Sabha, that "The Special 301 Report is a unilateral measure to pressurise the nations to enhance their IPR protection beyond WTO's TRIPS agreement. As per WTO, any kind of dispute between member states needs to be referred to the Dispute Settlement Body of the WTO and unilateral actions are not tenable under this regime. The Special 301 is an extra-territorial application of the domestic law of a country, which is inconsistent with the established norms of the WTO. In view of this, no action needs to be taken by the Government of India."[25]

India is showcasing a paradigm shift in its Intellectual Property Rights regime. However, US Special 301 Report outrightly shames nations whose practices are not in alignment to US' interests. Not only this, but measures can be taken by USTR if a unilateral action plan handed to the sovereign trading partner is not complied with. Due to this unilateral, biased approach of the Report, no deference should be paid to it by the Indian Government. To sum up, there are a lot of aspects that the report has not considered or has chosen to view with a rather myopic perspective. The Special 301 Report is not legally accurate, just a document used to threaten other countries into submission to unilateral U.S. demands. In the GIPC IP Index, scores are given ignoring the TRIPS Agreement and the WIPO Development Agenda and all other international norms for flexibilities in IP regimes. One must not take these rankings on its face value and turn a blind eye to the indicators used and methodology employed for ranking the countries. India is a developing country and must strive for improvement in its IP fronts but should not succumb to the pressure of the US and ignore India's interests, health issues and its developing needs and in trying to do so. We are a TRIPS compliant, developing country that lawfully exercises the flexibility allowed under the Agreement. India is a sovereign, welfare state driven by the Directive Principles of State Policy enumerated in the Constitution and thus keeps ahead the interest and health needs of its own people.

Views Are Personal Only,


[1]India Joins Three Key WIPO International Classification Treaties (June 7, 2019), https://www.wipo.int/portal/en/news/2019/article_0021.html.

[2] The Patents (Amendment) Rules, 2019.

[3] The Patents (Amendment) Rules Comes Into Effect, Banana IP (Sept. 20, 2019), https://www.bananaip.com/ip-news-center/patents-amendment-rules-2019-come-into-effec/.

[4] Impact of Start Up India, Ministry of Commerce & Industry (Jul. 3, 2019, 05:02 PM), https://pib.gov.in/PressReleasePage.aspx?PRID=1576869.

[5] Prem Rajani & Dikshat Mehra, Why India's New Trademark Rules are a significant step in improving Ease of Doing Business, The Economic Times (Mar. 25, 2017, 01:01 PM), https://economictimes.indiatimes.com/small-biz/legal/why-indias-new-trade-marks-rules-are-a-significant-step-in-improving-ease-of-doing-business/articleshow/57825035.cms?from=mdr.

[6] 2020 Special 301 Report, https://ustr.gov/sites/default/files/2020_Special_301_Report.pdf .

[7] 2020 Special 301 Report, https://ustr.gov/sites/default/files/2020_Special_301_Report.pdf .

[8] US Trade Representative Press Releases, USTR Releases 2018 Special 301 Report on Intellectual Property Rights (April 2018), https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/ustr-releases-2018-special-301-report.

[9] Trade Act of 1974 § 306, 19 U.S.C. ch. 12 (1975).

[10] PugatchConsilium Company Profile, http://www.pugatch-consilium.com/reports/PC_Brochure.pdf.

[11] U.S. Chamber International I.P. Index (Sixth Edition - 2018), http://www.theglobalipcenter.com/wp-c ontent/uploads/2018/02/GIPC_IP_Index_2018.pdf.

[12] Prashant Reddy, The Press Release Journalism Around the GIPC IP Index, SpicyIP , https://spicyip.com/2017/02/the-press-release-journalism-around-the-gipc-ip-index.html.

[13] The WIPO Development Agenda, http://www.wipo.int/edocs/mdocs/africa/en/wipo_ip_recs_ge_16/wipo_ip_recs_ge_16_t_3_d.pdf.

[14] TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C art. 7, 8, Apr. 15, 1994, 1869 U.N.T.S. 299.

[15] The Patents Act, 1970 §84.

[16] Indian Const. art. 47.

[17] Gaurav Sharma & Dr. Shashikant Hajare, Intellectual Property in India: The Human Rights Dilemma, 70 CNLU LJ (7), 77 (2017-18).

[18] Declaration on the TRIPS agreement and public health, https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.html.

[19] Compulsory Licensing of Pharmaceuticals and TRIPS, WTO, https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.html.

[20] Indian Pharmaceutical Alliance 2020 Special 301Submission, https://spicyip.com/wp-content/uploads/2020/03/Indian_Pharmaceutical_Alliance_2020_Special_301_Review_Comment.pdf.

[21] Novartis. Ag v. Union of India, (2013) 6 SCC 1.

[22] TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C art. 7, Apr. 15, 1994, 1869 U.N.T.S. 299.

[23] TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C art. 8. Apr. 15, 1994, 1869 U.N.T.S. 299.

[24] Declaration on the TRIPS agreement and public health, https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.html.

[25] Rajya Sabha Unstarred Question No. 330, http://dipp.nic.in/sites/default/files/ru330_1.pdf.

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