South Centre concerned over US pressure on India’s IP regime

Source: TWN

Geneva, 11 Nov (Kanaga Raja) — The South Centre has expressed concern
over the pressures being placed on India by the United States Trade
Representative (USTR) through the out-of-cycle review of the country’s
intellectual property (IP) laws and practices.

In an official submission to the USTR, the Geneva-based
intergovernmental organisation of developing countries has equally
voiced its concerns over the investigations of the US International
Trade Commission (USITC) against India’s trade, investment and
industrial policies, in particular intellectual property protection
and enforcement.

The South Centre viewed these recent developments as “most
inappropriate”, as it is against the spirit of the landmark WTO Doha
Ministerial Declaration on the TRIPS Agreement and Public Health.

It underlined that India and other developing countries have the right
to use the flexibilities in the TRIPS Agreement to the fullest extent
for advancing public health needs and other development priorities.

The legal and regulatory measures that India has used for protecting
public health are fully consistent with the WTO TRIPS Agreement, the
South Centre said.

“Continued pressures on developing countries to adopt an IPR regime
that would go beyond the minimum standards in the TRIPS Agreement and
that do not make use of the flexibilities that are part of the TRIPS
Agreement would have adverse social and developmental effects,
including on the public’s access to medicines,” said the South Centre

It requested that there be a stop to these pressures that are placed
on developing countries, including India.

The South Centre’s submission was in response to the request by the
USTR to provide all necessary and relevant information for identifying
and assessing the engagement with the Government of India on
IP-related issues of concern, in the context of the Special 301
Out-of-Cycle Review (OCR) of India commenced by the USTR.

The South Centre submission noted that the USTR has initiated the
current OCR of India to evaluate progress of intensive engagement with
the Government of India on intellectual property issues to “improve IP
protection and enforcement in India…” in the context of specific
concerns raised in the Special 301 report for 2014 by the USTR
relating to civil IPR enforcement as well as India’s IP regimes
pertaining to copyright, patents, regulatory data protection,
trademarks, trade secrets and localization trends.

The Special 301 report ‘encourages’ India to strengthen civil IPR
enforcement by increasing judicial efficiency, reducing court
backlogs, establishing fast-track procedures and specialized judges.

It is the South Centre’s view, however, that India offers adequate
judicial and administrative remedies to right holders to enforce their
IP rights.

India has established a special administrative tribunal known as the
Intellectual Property Appellate Board (IPAB) which exercises
jurisdiction over trademarks, patents and geographical indications.
Right holders can also file an appeal to the High Court against the
decision of the IPAB and can also file special leave petitions before
the Supreme Court of India against any decisions of the High Court.

Indeed, said the South Centre, IP right holders have made use of the
judicial remedies available in India in a number of cases.

For example, the multinational pharmaceutical company Novartis has
initiated separate lawsuits against eight Indian companies alleging
infringement of its patent on vildagliptin, and has been granted
injunctions by the courts in four of these cases, while Merck has
filed seven separate lawsuits against infringement of its patent on
sitagliptin and has obtained injunctions in six of these suits.

Between 1995 to 2014, 366 cases of copyright infringement have been
filed in India out of which 80 have been filed by foreign copyright
owners and 52 of these have received a favourable ruling under the
Indian law.

In the area of trademarks, 1,593 cases of trademark infringement have
been filed between 1995 to 2014 out of which 449 cases have been filed
by foreign trademark owners and 302 cases have received a favourable
ruling under the Indian law.

“This demonstrates that India has a robust system of IP enforcement in
place which is fully in accordance with the requirements of Part III
of the TRIPS Agreement.”

The South Centre stressed that the TRIPS Agreement does not require a
country to establish IP enforcement procedures that are distinct from
the country’s general law enforcement system. TRIPS only requires a
country to make available appropriate judicial or administrative
mechanisms to enforce IP rights, which is provided adequately by

With regard to copyright, it appears that the US would like India to
enact anti-camcording legislation, model its statutory licensing
relating to copyrighted works upon Berne Convention standards, ensure
that collecting societies are licensed promptly and are able to
operate effectively, provide additional protection against signal
theft, adopt measures to prevent circumvention of technological
protection measures, and adopt notice and takedown measures to prevent
online piracy.

The South Centre however noted that contrary to the concerns raised in
the Special 301 report, the Consumers International IP watch-list
report has consistently placed India among the top three
consumer-friendly copyright regimes from 2009 to 2012, meaning that
India’s copyright regime is regarded as more amenable to access to
knowledge rather than restricting access to knowledge through
excessive copyright protection.

Following the amendment of the copyright law in 2012, India has
introduced technological protection measures as well as special fair
use provisions. This is in spite of the fact that India is not a party
to the WIPO Internet Treaties (WCT and WPPT) and is therefore under no
obligation to adopt such measures in its law.

Furthermore, enacting a specific anti-camcording legislation in India
may not be needed in view of the fact that camcording of a film is
already a violation under the current Copyright Act of 1957. Moreover,
the provisions on statutory licensing in India’s copyright law is
fully consistent with Article 9 (2) of the Berne Convention.

According to the South Centre submission, the USTR report also raises
specific concerns in relation to section 3 (d) of the Patents Act and
states that it may limit the patentability of potentially beneficial
inventions. It also expresses concern about issuance of compulsory
license in India, as well as the availability of pre-grant and
post-grant opposition.

The South Centre said: “The establishment by the government of a
country of its criteria to grant patents (as provided for in section 3
(d) of the Indian Patent Act and interpreted by the Indian Supreme
Court in the Novartis case), the right to issue compulsory licenses,
and the use of patent pre-grant and post-grant opposition proceedings
are, among others, important flexibilities that serve to protect
public health, consistent with the TRIPS Agreement.”

Additionally, a country may consider and weigh other important policy
objectives (such as promotion of access to health) in relation to its
grant of IPRs. None of the recent decisions in India to reject patents
on known medicines or to issue compulsory licenses on anti-cancer
medicines have been challenged before the WTO dispute settlement
mechanism, the South Centre noted.

These actions by India are fully consistent with the Doha Declaration
on TRIPS and Public Health which clarifies that the TRIPS Agreement
can and should be interpreted to advance public health goals and that
nothing in the TRIPS Agreement impedes the right of countries to adopt
policies to promote public health and access to medicines.

Indeed, said the South Centre, the concern of ensuring access to
medicines while enabling the grant of quality patents on medicines
that constitute real innovations is the objective of Indian patent

It noted that the granting of a compulsory license in India on a
medicine is not unique, in that many other countries have issued
compulsory licenses for ensuring access to affordable medicines to
meet their public health needs, including Brazil, Ecuador, Eritrea,
Ghana, Indonesia, Malaysia, Mozambique, Thailand and Zambia.

“The granting of compulsory licenses is TRIPS-consistent and is an
important measure that governments are allowed to take in furtherance
of the public interest. This has been confirmed by the WTO (Doha)
Ministerial Declaration on TRIPS and Public Health.”

According to the South Centre, it should be recognised and appreciated
that the production of generic medicines by the Indian drug industry
is of critical importance for the healthcare not only of Indian
citizens but also of millions of people outside of India, especially
in developing countries.

This is because a large portion of a broad range of medicines used by
patients in developing countries is produced by Indian drug companies
and imported by these countries from India. The provision of these
generic medicines by Indian companies is a very important factor in
India’s contribution to more affordable access to medicines for many
millions of people in developing countries.

For example, it is well known that the supply of affordable generic
medicines for HIV-AIDS patients by Indian companies, a large
proportion of this being supplied under the Global Fund and other
charitable funds, has contributed to the saving of millions of lives
in Africa and other regions.

The presence and use of TRIPS flexibilities (including through the
provision on compulsory licensing and other relevant provisions in the
Indian patent law) is a significant factor enabling the Indian drug
industry to play its important role in the treatment of diseases in
India and in the developing countries. These provisions are consistent
with WTO rules, and thus India is complying with its international
obligations in intellectual property, while also enabling the country
to meet its responsibilities in both national and international public

“Therefore, it is our view that India should be encouraged to continue
to play this role, and that there should be no hindrance placed on the
country and its drug industry to maintain its laws and to play its
important global role,” said the South Centre submission.

On the Special 301 report’s concern about the role of compulsory
licensing in India’s National Manufacturing Policy, the South Centre
argued that India’s option to make use of compulsory licensing in its
National Manufacturing Policy as a mechanism available to government
entities to effectuate technology transfer in the clean energy sector
can be considered as a component of India’s policy objective of
shifting its energy sector to clean energy in order to address climate
change and air pollution concerns.

It noted in this context that climate change is both a national and a
global problem. Under the UN Framework Convention on Climate Change
(UNFCCC), technology transfer is seen to play a key role in enabling
developing countries like India to undertake enhanced action for
adaptation and mitigation of climate change through the use of
environmentally-sound technologies.

The South Centre cited Article 4.1 (c) of the UNFCCC as requiring all
Parties, taking into account their common but differentiated
responsibilities and their specific national and regional development
priorities, objectives and circumstances, to: “Promote and cooperate
in the development, application and diffusion, including transfer, of
technologies, practices and processes that control, reduce or prevent
anthropogenic emissions of greenhouse gases not controlled by the
Montreal Protocol in all relevant sectors, including the energy,
transport, industry, agriculture, forestry and waste management

Further, Article 4.5 of the UNFCCC states that: “The developed country
Parties and other developed Parties included in Annex II shall take
all practicable steps to promote, facilitate and finance, as
appropriate, the transfer of, or access to, environmentally sound
technologies and know-how to other Parties, particularly developing
country Parties, to enable them to implement the provisions of the
Convention. In this process, the developed country Parties shall
support the development and enhancement of endogenous capacities and
technologies of developing country Parties. Other Parties and
organizations in a position to do so may also assist in facilitating
the transfer of such technologies”.

The South Centre underlined that cooperation on technology transfer
for clean technologies is a treaty commitment for all parties under
the UNFCCC, with developed countries such as the US also being
treaty-obliged to take all practicable steps to promote, facilitate
and finance, as appropriate, the transfer of, or access to,
environmentally sound technologies and know-how to developing

Therefore, said the South Centre, it is appropriate for India to adopt
policies supportive of access to clean technologies in its National
Manufacturing Policy to enhance a shift to clean energy for which
transfer of technology is necessary.

It pointed out that this is in fact similar to what the US has itself
done in promoting the use of compulsory licenses or mandatory licenses
to facilitate access to clean technologies under Section 308 of the US
Clean Air Act.

On the Special 301 report’s desire for India to provide effective
protection against unfair commercial use and unauthorized disclosure
of test or other data generated to obtain marketing approval for
pharmaceutical and agricultural products, the South Centre stressed
that there is no obligation upon India or any other country under the
TRIPS Agreement to introduce market exclusivity while protecting data
on clinical trials before marketing approval is given to a
pharmaceutical product.

Article 39.3 of the TRIPS Agreement requires WTO members to establish
protections for submitted test data only under certain conditions.
Test data must be protected in national authorities that require its
submission. But Article 39.3 does not require protection to be given
to already public data. Moreover, the obligation under TRIPS is to
protect such marketing approval data against unfair commercial use.

What constitutes unfair commercial use is determined by the national
law of each country. Indeed, TRIPS negotiators considered and
specifically rejected language requiring exclusive rights to test

Therefore, India’s law on regulatory data protection is fully
consistent with the TRIPS Agreement, said the South Centre.

It considers that maintaining the Indian law on this issue is very
important because this facilitates the production and marketing of
generic medicines by Indian drug companies.

“In our view, the model of data protection requested by the US
administration would be detrimental to the ability of generic
companies to supply generic medicines for the period of market
exclusivity, and this would have serious significant negative impact
on access to medicines, affecting patients not only in India but also
many other countries.”

In some conclusions, the South Centre believed that it is important
that in this out-of-cycle review process, “a broader view of the
public interest in India, and the global public interest, especially
the interests of people in the developing countries, should be taken.”

It is the South Centre’s view that the Indian IP laws include balanced
provisions to ensure that IP rights do not hinder the ability of the
government to adopt measures for promoting development priorities,
particularly in the area of public health. These are fully in line
with the TRIPS Agreement and reaffirmed by the Doha Declaration on
TRIPS and Public Health.

“We thus view with concern the pressures placed on India by the
out-of-cycle review (OCR) of India by the US Trade Representative to
evaluate intellectual property issues as well as the investigations by
the International Trade Commission (USITC) against India on trade,
investment and industrial policies in India particularly on
intellectual property protection and enforcement.”

According to the South Centre, the continued threat of unilateral
trade sanctions by the US to developing countries through USITC
investigations and the Special 301 review undermines the legitimacy of
the WTO, particularly the TRIPS Agreement and the WTO’s dispute
settlement system.

The USTR investigations, including the current OCR, may lead to
unilateral trade sanctions that would be illegitimate under the WTO
rules. Moreover, the mere threat of sanctions by placing a country in
any specific category in the US watch-list would appear to violate the
WTO Dispute Settlement Understanding (DSU).

The South Centre submission highlighted a WTO panel as noting in a
dispute brought in 1999 by the EU against Section 301 of the US law
that “the threat alone of conduct prohibited by the WTO would enable
the Member concerned to exert undue leverage on other Members. It
would disrupt the very stability and equilibrium which multilateral
dispute resolution was meant to foster and consequently establish,
namely equal protection of both large and small, powerful and less
powerful Members through the consistent application of a set of rules
and procedures.”

[The ruling and the panel report, adopted by the DSB on 27 January
2000 (SUNS #4595 of 28 January 2000 and SUNS #4580 of 24 December
1999), was in the dispute brought by the EU over US Trade Law Sections
301-310. In the report, the panel had said that prima facie the
provisions of the US law were not compatible with the US obligations,
but that the provisions of S. 301 could be considered to be compliant,
based on the statement of administrative actions provided to the
Congress and the US statements to the panel that it would respect the
DSU obligations in administering the powers under S. 301.

[The panel added, in the report, that its conclusions were based on
the US assurances and undertakings and that if they be repudiated in
the future or in any other way removed by the US administration or
another branch of the US government, the findings of conformity would
no longer be warranted.

[According to Mr. Chakravarthi Raghavan, veteran trade analyst and
Editor-Emeritus of the SUNS, by conveying to the panel the statement
of US administrative actions provided to the Congress, and the
assurance that the US would respect the DSU obligations against any
unilateral actions in administering the powers under S. 301, and abide
by them, assurances that were accepted and recorded in the panel
report adopted by the DSB, in effect this became a US WTO obligation
in international law. – SUNS]

The South Centre warned in its submission that continued US pressures
on developing countries to adopt an IPR regime that would go beyond
the minimum standards in the TRIPS Agreement and not make use of the
flexibilities that are part of the TRIPS Agreement would have adverse
social and developmental effects, including on the public’s access to

The Centre called for a stop to these pressures that are being placed
on developing countries, including India. +

This entry was posted in Compulsory Licensing, IP Rights, IPR policy, Novartis Case, Out of Cycle Review (OCR), Patents, Sec 3 (d), Special 301 report, TRIPS flexibilities, US pressure on India. Bookmark the permalink.

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