US Businesses Urge Obama To Stoke Trade War With India 07/06/2013 by Kelly Burke for Intellectual Property Watch and William New 5 Comments Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)The heads of seventeen United States industry associations, including the US Chamber of Commerce, today (6 June) issued a letter to President Barack Obama alleging that the Indian government is engaging in discriminating policies against US exports and encouraging swift action by the US government. Among the concerns is the country’s treatment of patents. The businesses expressed concern that recent policy decisions in India undermine internationally recognised intellectual property standards that are ultimately “jeopardizing domestic jobs.” “Over the last year, the courts and policymakers in India have engaged in a persistent pattern of discrimination designed to benefit India’s business community at the expense of American jobs,” the letter [pdf] said. “These actions are unacceptable for a responsible middle-income country and rising global power to treat its second-largest export trading partner.” The companies urged the Obama administration “immediately to initiate bilateral engagement at the highest levels and to coordinate closely with the European Union and other like-minded countries. If this engagement is not fruitful, we ask the U.S. government to respond purposefully, using all available trade tools and diplomatic engagement.” Among other concerns, the letter said India’s administrative and court rulings “have repeatedly ignored internationally recognized rights – imposing arbitrary marketing restrictions on medical devices and denying, breaking, or revoking patents for nearly a dozen lifesaving medications.” Specific examples of India’s actions are not provided, but one recent development that drew the ire of western companies was a defeat in the Indian Supreme Court of a Novartis (the Swiss pharmaceutical company) challenge to India’s patent law provision called Section 3(d), which raised the bar on what can be considered a true innovation for patent purposes. The court found Novartis’ Glivec (imanitib) cancer drug to not be sufficiently innovative under the provision (IPW, Developing Country Policy, 1 April 2013). Other businesses that signed the letter include the National Association of Manufacturers, Pharmaceutical Research and Manufacturers of America, CropLife America, BIO, Telecommunication Industry Association, National Foreign Trade Council, US Council for International Business, and Emergency Committee for American Trade. The language, tone and concerns of the letter resemble the testimony of the Pfizer pharmaceutical company legal counsel before the House Ways & Means Committee in March. In that testimony, the Pfizer official alleged that India has continually defied trade rules, discriminated in favour of domestic generic companies, and abused the international system allowing compulsory licences (allowing cheaper generic production of patented products such as medicines). Pfizer also asked the House committee to review all available policy tools and trade benefits conferred on India by the US, an observer said. Also, officials from the Office of the US Trade Representative have increasingly raised concern about India, saying it is hurting its economy through its actions. Meanwhile, India has granted over 160 patents to Pfizer since amending its patent law in 2005. Western Monopolies Western firms, which own the majority of the world’s patents and draw extraordinary value from them, have regularly engaged in creative ways to protect and extend the life of their patents, such as through what is called “evergreening,” patenting of slight variation or improvements on previously patented technologies. Companies do not see evergreening as frivolous but rather an essential part of the research and development paradigm. They seek the security and reliability of knowing their rights will be protected when they invest in other countries. Meanwhile, reports have been circulating in the western press that most drugs developed by western companies in recent years have only been incremental improvements on existing drugs. India established a patent system under the terms of joining the World Trade Organization, but in doing so, included the provision in its 2005 patent law that makes it more difficult for patents to be obtained or extended. Western companies and other stakeholders have regularly complained about low-quality patents being granted in their own countries, but have not responded well to what they see as restrictions in the profitable Indian market. Companies in western countries regularly take out compulsory licences, as allowed under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), to get access to patented technologies, but when developing countries like India use them for essential medicines they are harshly criticised for misuse of the TRIPS provision. As a possible sign of the way a trade war can escalate, the US government recently found serious flaws in the quality of an Indian generic drug provider to the US market. That kind of action, if politically driven, can lead to back and forth retaliatory measures. Is it Real? Meanwhile, a story this week in the Business Standard of India about a visit by Indian Parliament officials to meet US lawmakers in Washington, DC painted a highly positive picture of the bilateral relationship and gave no indication of a brewing battle over IP rights. Rather, the officials said that US-India relations have drastically improved over the last 15 years. 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