IPRs Feature Prominently In WTO Trade Policy Review Of India

Intellectual property rights are among the issues given detailed analysis in the latest trade policy review of India by the World Trade Organization under review this week. Turns out, India has been quite busy on IP rights over the past few years.

The sixth review of trade policies and practices of India is taking place at WTO on 2 and 4 June.

The TPR report, WT/TPR/S/313, [pdf, note there is also an executive summary available] was drafted by the WTO secretariat. It stresses the importance of IP rights to India, and details changes and progress made since the last review several years ago.

Intellectual property rights gets significant attention in the review, some 14 pages across all types of IP (by comparison, government procurement, for instance, gets less than four pages). That represents over 10 percent of the total 131 pages of text (apart from tables and appendices).

The review summary states: “Since its last Review, India has taken several initiatives to modernize its IPR administration and continue its efforts to enforce IPRs. The Copyright Act was amended, inter alia, to implement the 1996 WIPO Copyright Treaty and guidelines were issued on patents for biological materials, both in 2012. In March 2012, India issued its first and only compulsory licence (on certain anti-cancer medicine).” Nowhere in the intellectual property section does it state that India is out of compliance with WTO rules, but it does raise some questions.

In the introduction to the section (3.3.5) on intellectual property rights, it quickly asserts the importance of IPRs to the Indian economy, then references moves by the government to possibly use compulsory licensing related to technology (which is nevertheless common among developed countries). It then adds that India has slipped in an index on innovation, apparently tying its IP rights activity to its innovation.

Paragraph 3.207 states: “India has an important economic interest in protecting the intellectual property rights (IPRs) of its creators and inventors, particularly in the creative and knowledge-based industries. It is an active stakeholder in the international intellectual property community, and party to key WIPO treaties. Since the last Review, India has in its 2012 telecommunications policy favoured “Indian” IPRs in line with other policies favouring local manufacture. India’s National Manufacturing Policy, while defining the functions of the Technology Acquisition and Development Fund, has stated that the Fund will have the option to approach the Government for issue of a Compulsory Licence for the technology which is not being provided by the patent-holder at reasonable rates or is not working in India to meet the domestic demand in a satisfactory manner. It is stated that such compulsory licences will be issued only within the provisions of the TRIPS. In the Global Innovation Index 2014, India slipped ten positions to rank 76th in the world.”

The report notes India’s establishment of an IPR Think Tank, which submitted a draft national IPR policy in December. It also states that the only IP law that has changed in India since 2011 was its Copyright Act.

Patents

Using World Intellectual Property Organization statistics, the report offers an interesting analysis of India’s patent situation: “India had over 40,000 patents in force as at end-2013. While the number of patent applications has been steadily increasing, the number of patents granted has decreased by one-third (Table 3.22). This may indicate that the backlog of patent applications is growing. On the resident and non-resident breakdown, Indian applicants hold less than one-fifth of the patents in force as at 2012-13. Moreover, while patent applications from residents and non-residents were about the same in 1999, in 2013 non-resident applications were three times higher than resident applications (Chart 3.5). Nevertheless, four Indian entities, including two in the public sector, figure among the top 20 applicants in India (Table A3.8).” It adds: “Sectors that have attracted the most patent applications in the period 1999-2013 are pharmaceuticals, organic fine chemistry and computer technology.”

The report says India is engaging in a variety of efforts to modernise and streamline its procedures and services and to reduce backlogs in patent applications.

Significantly, the report lists several developments it classifies as “important,” including a court case interpreting Section 3(d) of Indian Patent Law (Novartis A.G. vs. Union of India and Others), the rejection of a patent application on a hepatitis C drug, and the issuance of its “first and only compulsory licence so far,” for an anti-cancer medicine. It notes that several other applications for compulsory licences since then have not been successful.

The report also details India’s implementation of the “special compulsory licence regime” following the paragraph 6 of the Doha Declaration on TRIPS and Public Health. (TRIPS is the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.) It should be noted that production of generic medicines is a significant portion of India’s economy.

It says, “It is not entirely clear how India intends to address the issue of safeguards against diversion that are part of both the August 2003 decision and the subsequent Protocol Amending the TRIPS Agreement that proposes to transpose the decision into the text of TRIPS Agreement in a new provision, Article 31bis.” But then offers a possible answer: “However, Section 92A(2) states that the compulsory licence is to be granted solely for manufacture and export of the concerned pharmaceutical product, as per the terms and conditions specified by the Controller General of Patents, Designs and Trademarks in the decision granting the compulsory licence, which must be published. This may be viewed as ensuring transparency and appropriate safeguards.”

In other IP areas, the report details activity around policies on biodiversity and biotechnology. It also describes guidance issued on various subjects, such as patents and computer programs (which are not allowed), and the examination of patent applications in the field of pharmaceuticals.

On patented green technologies, it describes a discussion in the WTO TRIPS Council over an India policy. India has set up the Technology Acquisition and Development Fund (TADF) which will “also function as an autonomous patent pool and licensing agency,” the report says.

Copyright

On copyright, the report says, “India is the world’s largest producer of films and the total contribution of the Indian film and television industry to India’s GDP is estimated at 0.5% or Rs 500 billion (or approximately US$8 billion). This industry, in which copyright protection plays an important role, is projected to grow at a compound growth rate of 17% per annum up to 2017.” It also gives figures for the music and publishing industries.

A “major change,” it says in paragraph 3.243, “has been to ensure that copyright holders are protected against circumvention of effective technological measures and rights management devices, while maintaining an appropriate balance between the interests of the right-holders on the one hand and that of technology innovators, researchers and educational institutions, on the other. Moral rights have been extended to performers, which is in conformity with the WPPT. The right of reproduction of artistic works, cinematographic works and sound-recordings now includes storage of the protected work in any electronic or other media. In refining the rental right, the amended law defines commercial rental to exclude use for non-profit purposes besides protection of technological measures and protection of Right Management Information (RMI) in the digital network.”

Several other changes to copyright are detailed as well, such as extensions of terms of protection, extension of fair use provisions, mandatory registration of copyright societies.

Trademarks, GIs

There is an extensive description of the trademark policy in India as well. It notes that, “Unlike patents, resident trademark applications and grants represent nearly ten times those of non-resident,” and raises some cases in which foreign firms have lost in courts in attempts to establish products as having well-known marks.

The report also has a section on industrial design, and substantial sections on geographical indications, protection of new plant varieties, trade secrets and test data protection, and enforcement.

On GIs, it says India has a strong interest in protecting GIs (it has for instance Darjeeling tea), but some of its key products, like basmati rice, are not registered as GIs. Interestingly, the report lists foreign products registered as GIs in India:

“The nine foreign GIs registered so far are: Pisco Sour from Peru, Champagne and Cognac from France, Napa Valley from the United States, Scotch Whiskey from the United Kingdom, Prosciutto di Parma from Italy, Porto and Duoro from Portugal, and Tequila from Mexico. It would appear that certain European cheese GIs are being produced and sold by Indian manufacturers in India, although these are not being claimed to have originated in Europe, thus not resulting in confusion as to their origin.”

Trade Secrets, Test Data, Enforcement

On trade secrets, the report raises some doubts in its description:

“3.258. There is no specific legislation regulating the protection of trade secrets and hence no enforcement measures/penalties for violations of trade secrets, other than under contract law and common law of passing off, breach of confidence etc. It is not clear precisely how India protects against disclosure of trade secrets by third parties not party to any formal or informal contracts or confidence. However, Indian Courts have upheld trade secret protection on the basis of principles of equity and at times upon a common law action of breach of confidence as well as breach of contractual obligation. The remedies available to the owner of trade secrets are injunctions preventing the licensee from disclosing the trade secret, orders to return all confidential and proprietary information and compensation for any losses suffered due to disclosure of trade secrets.”

And on protection of pharmaceutical test data, it raises doubts about implementation of TRIPS:

“3.261. There is no specific legislation protecting test data submitted for obtaining regulatory approval of pharmaceuticals. The Drugs and Cosmetics Act of 1940 regulates the manufacture and marketing approvals for drugs and traditional medicines, while the Insecticides Act of 1968 addresses the manufacture and marketing approvals for agricultural chemicals (such as insecticides, fungicides and weedicides). However, there is no statute in place in India at this time for the protection of pharmaceutical, agrochemical and traditional medicine-related data against disclosure and reliance by third parties. Such test data is said to be protected under the Official Secrets Act. However, it is not clear how India implements the second obligation under Article 39.3 of the TRIPS Agreement, which is in addition to the obligation to provide protection against disclosure, namely, protection of such data against unfair commercial use.”

On enforcement, it praises the Indian government and industry for their efforts.

Price Controls

And elsewhere in the report, under price controls, it states:

“3.184. On 7 December 2012, the Government introduced the National Pharmaceutical Pricing Policy 2012, and subsequently the Drugs (Price Control) Order, reflecting the Policy, was issued on 15 May 2013. The objective of the Policy is to introduce a pricing framework for drugs to ensure availability of “essential medicines” specified in the National List of Essential Medicines at reasonable prices while providing sufficient opportunity for innovation and competition. Under the Policy, prices of some 348 essential medicines are regulated on the basis of formulations through “market-based pricing”, which takes the simple averages of retail prices of all brands having a market share of no less than 1% of total market turnover. The ceiling price of scheduled formulations will be revised as per the annual wholesale price index (WPI) for the preceding calendar year on or before the first day of April every year and will be notified on the first day of April every year.”

Indian Government’s Statement

The Indian government’s policy statement and other items from the WTO meetings are or will be available on the WTO website here.