Special Report: India Rocked By Report Of Secret Assurance To US Industry On IP 22/03/2016 by Patralekha Chatterjee for Intellectual Property Watch 2 Comments IP-Watch is a non-profit independent news service, and subscribing to our service helps support our goals of bringing more transparency to global IP and innovation policies. To access all of our content, please subscribe now. You also have the opportunity to offer additional support to your subscription, or to donate. That the Indian government has been under pressure from the United States to change its patent regime is no secret among those who follow the public discourse on intellectual property rights. Now, a new controversy about India’s alleged private assurance to the US-India Business Council (USIBC) and other lobby groups that it would not invoke compulsory licensing for commercial purposes seeks to add fuel to fiery speculation about a shift in India’s policy on IPR. The controversy pivots on a 5 February 2016 submission by the USIBC to the Office of the United States Trade Representative (USTR) annual Special 301 report. The Special 301 Report is prepared every year by the USTR under Section 301 as amended of the (US) Trade Act of 1974. The report aims to identify trade barriers to US companies due to intellectual property laws in other countries The USIBC describes itself as the premier business advocacy organisation representing more than 350 of the largest global companies investing in India. In its submission to USTR last month, the Council stated: “Despite compulsory licensing denials, Industry continues to be concerned by the potential threat of compulsory licensing. The Government of India has privately reassured [Industry] it would not use Compulsory Licenses for commercial purposes. USIBC would be further encouraged if the Government of India made a public commitment to forego using compulsory licensing for commercial purposes and in public emergencies only, which would greatly enhance legal certainty for innovative industries.” Relations between India and the United States have improved sharply in recent years but the two countries continue to lock horns when it comes to IPR. India has been on the USTR’s Special 301 ‘watch list’ for years, much to the chagrin of many within India. [Update: The Indian government has issued a statement declaring that reports that it privately assured that it will not issue any more compulsory license is “factually incorrect.” Read the full statement here.] There have been recent media reports that the Government of India has privately assured that it will not issue any more compulsory license. It is hereby clarified that such reports are factually incorrect. In this regard, it may be noted that India has a well-established TRIPS compliant legislative, administrative and judicial framework to safeguard IPRs. Under the Doha Declaration on the TRIPS Agreement Public Health, each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted. Even as Government of India is conscious of the need to spur innovation and protect individual rights, it retains the sovereign right to utilize the flexibilities provided in the international IPR regime It may be noted that to date, there has been only one case of compulsory license in India and that too after a well-thought out and laid down process, which was subsequently upheld right up to the highest Court of the land. The Government of India has neither confirmed nor denied the veracity of these alleged private assurances which are now under media glare. Rajiv Aggarwal, joint secretary in India’s Department of Industrial Policy and Promotion (DIPP) tasked with overseeing Intellectual Property Rights as well as Investment Promotion & International Cooperation for America, did not immediately respond to queries from Intellectual Property Watch on the matter. The US-India Business Council, whose February 5 missive stirred the pot this time, also has gone quiet. Sukanya Sen, a spokesperson of the USIBC, told Intellectual Property Watch that “at this time, the Council is not issuing any statements and will have to respectfully decline taking up any further questions on the issue.” Indian protestors against medicines patent provisions in FTA, 2013 Worries about these “private assurances” comes at a time when the Government of India is in the process of rolling out a national intellectual property rights (IPR) policy. India has always maintained that its IPR regime is TRIPS-compliant and aligned to the 2001 Doha Declaration on the TRIPS Agreement and Public Health which reaffirms flexibility of TRIPS member states in circumventing patent rights for better access to essential medicines. (TRIPS is the 1994 World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights). But the tension between the requirements of public health and industry, especially foreign investors, has never been resolved. At the time of writing, the final text of India’s IPR policy is before the Union Cabinet. No one knows its final shape nor when it is likely to be released. However, a leaked draft that has been in the public domain, courtesy Washington-based non-profit Knowledge Ecology International, notes “In future negotiations in international forums and with other countries, India shall continue to give precedence to its national development priorities whilst adhering to its international commitments and avoiding TRIPS plus provisions.” The draft says India will continue to use flexibilities under the TRIPS agreement, and does not recognise TRIPS-plus provisions such as patent linkage. All this remains part of India’s publicly declared stand on IPR. But is something shifting behind closed doors in backstage deals? Health activists say they are extremely worried about India abandoning the earlier consensus of adherence to public health goals under pressure. “When CL [compulsory licence] provisions are used, prices decreases can range from 50% to 97%, resulting in massive cost savings to governments and patients, and a significant increase in the number of patients able to access the medicines. This is the option, embedded in our national law, which is being gifted away by the ‘private assurances’. It is a disingenuous attempt to strike at the very heart of the legislative intent embodied in the Indian Patents Act,” wrote Amit Sengupta, Associate Global Co-ordinator, People’s Health Movement. In an article in The Wire Sengupta points out in his article that David Hirschmann, the senior vice president of the US Chamber of Commerce, uses exactly the same phrase regarding “private reassurance” in his submission to the USTR. (Note: the USIBC is affiliated with the US Chamber) Medical charity Médecins Sans Frontières (MSF, Doctors Without Borders) has also expressed its deep concern about the recent revelations in the media that a US industry lobby group – the USIBC and US Chamber of Commerce – had received verbal, private assurances from Indian officials that it will not use ‘compulsory licensing’ for commercial purposes. According to MSF, other IPR-related developments that can negatively impact access to medicines include the following – the Indian Patent Office embarking on the process of amending the patent rules to introduce fast track patent examination. This, MSF argues, “will undermine the ability of patient groups to file pre-grant oppositions in time.” MSF says it is also disturbed that “the USIBC – a group that receives funding from pharmaceutical companies – was allowed to conduct training for patent examiners who assess applications covering many life-saving pharmaceutical products (medicines, vaccines, diagnostics). This allows the US pharmaceutical industry who wants a more favourable patent regime to influence India’s patent office decisions.” Nationalist groups which support the Narendra Modi government in many other areas are worried about what they perceive as increasing external pressure in India’s domestic matters. Ashwani Mahajan, author, academic and National Co-convenor of the Swadeshi Jagran Manch which advocates self-reliance, told Intellectual Property Watch “India’s patent regime is TRIPS-compliant and meets global standards. There is no need for the United States to tell us what to do. Be it section 3(d) of the Indian Patent Act , Compulsory Licenses or pre-grant opposition – these are all part of our declared patent policy. This controversy about private assurances is not good. I will take up the matter with the Government.” Interestingly, the Swadeshi Jagran Manch is the economic wing of the Rashtriya Swayamsevak Sangh (RSS) which advocates a muscular Hindu nationalism and provides the ideological fuel to the India’s ruling Bharatiya Janata Party. India’s drug-makers are taking a less strident stand on the controversy. Some are upset that verbal assurances given behind closed doors are out in the open. Some dismiss the controversy as hype. “What are these ‘private assurances” that are being talked about so much? These could have been just casual, verbal assurances which often happen during talks. I see this as an example of lobbying by bodies like USIBC. The aim is to pressure India. The government of India has not officially said anything on the matter. Nor has there been any change in the patent law,” Indian Drug Manufacturers’ Association (IDMA) Deputy Secretary-General T R Gopalakrishnan told Intellectual Property Watch. The IDMA has 900 members. The Indian Pharmaceutical Alliance (IPA), which represents 20 big drug makers, says India’s patent laws are fully WTO-compliant. However, “if the government of India had said something privately, USIBC should not have embarrassed it by making it public,” IPA Secretary General D.G. Shah told Reuters. As the storm rages on, the Alliance for Fair Trade with India (AFTI) has applauded members of the House Ways and Means Committee for encouraging USTR Michael Froman and Secretary of Commerce Penny Pritzker to allow more US industry input and involvement in discussions with India (IPW, North American Policy, 16 March 2016). The jury is out on whether India will continue to stand by the public interest safeguards which are currently part of its patent law and which it is entitled to as part of TRIPS flexibilities, both in policy and practice. But in the near future, one thing seems certain. There is going to be increased collaboration between American and Indian companies. Speaking about the relationship between India’s generic drug makers and multinational pharmaceutical enterprises, IDMA’s Gopalakrishnan felt collaboration was happening and is likely to continue in the coming days because of the commercial logic embedded in such deals. Patralekha Chatterjee may be reached at email@example.com."Special Report: India Rocked By Report Of Secret Assurance To US Industry On IP" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.