It's high time to keep India out of priority watch list

In its 'Special 301 Report' released this year on Intellectual Property (IP) Protection and Enforcement, the US Trade Representative (USTR) has continued to place India on the 'Priority Watch List' along with Russia, China, Indonesia, Argentina, Chile and Venezuela for lacking requisite IPR protection and enforcement. The Office of the USTR is the United States government agency responsible for developing and recommending United States trade policy to the President of the US, conducting trade negotiations at bilateral and multilateral levels, and coordinating trade policy within the government through the interagency Trade Policy Staff Committee (TPSC) and Trade Policy Review Group (TPRG).

USTR Annual Special 301 Report identifies trade barriers to American companies, primarily due to the IP laws and legislations of other countries. The Special 301 Report is an annual publication dedicated to the global state of IP protection and enforcement. The report labels countries of concern as Priority Watch List or Watch List countries. This year 27 countries received a designation. Designation as a priority watch list country does not come with additional penalties or enforcement, but USTR states that designated countries will be the subject of particularly intense bilateral engagement during the coming year.

This year's report is notable in that it contains a separate section dedicated to new Chinese laws on intellectual property protection and USTR's view on their enforcement. The report highlighted the problematic Section 3(d) of India's patent law, which does not allow for provision of patents for incremental innovation. The report stated that 'in the pharmaceutical sector, the United States continues to monitor the restriction on patent-eligible subject matter in Section 3(d) of the Indian Patents Act and its impacts'.

However, what is intriguing is the fact that while finalizing the 'Special 301 Report', the USTR seems to have conveniently overlooked the substantial and consistent progress made by India on number of issues on which the US companies have for long been raising apprehensions and concerns including that of IP environment in India. It is true that several actions have been taken by the Indian government for improving the IPR environment and enforcement. The Report voiced concern that patent applicants continue to confront costly and time consuming pre- and post-grant oppositions, long waiting periods to receive patent approval, and excessive reporting requirements. But, the fact is that even if the pre-grant opposition adds time to the patent prosecution time, it is less time consuming and less costly than defending the post-grant opposition proceedings. Pre-grant opposition provides an opportunity of quick assessment for patentability for the patent application. India's Patents Act has been amended several times over the years in order to be WTO and TRIPS compliant. The Patents (Amendment) Rules, 2020 were notified, which streamlined the rules to promote ease of doing business primarily revolving around the submission of the Priority Documents and the Form-27, which relates to the Statement of Working for a granted patent. In 2021, the Patent Rules were once again amended and came into force in February 2021. The major amendment in these rules is in respect of fee reduction for eligible educational institutions. This is yet another step towards the encouragement of the Indian educational institutions to become IP savvy.

The USTR also raised concerns on the contentious issue of Section 3(d) of the Indian Patents Act. However, the fact remains that Section 3(d) is an enabling provision while barring evergreening. Section 3(d) of the Patents Act only limits secondary patents that do not enhance efficacy and typically result in evergreening.

Evergreening of patents delays the entry of generic drugs which in turn adversely impacts the accessibility of drugs to the patients across the world. While finalizing the 'Special 301 Report', the USTR should have considered the fact that India has made considerable progress in the procedural aspects by abolishing the Intellectual Property Appellate Board (IPAB) with a view to resolve IP disputes efficiently and creating specialized courts and rules for handling IP matters across India. The High Courts in the states are now taking up the matters related to IP. For example, the High Court of Delhi has set-up the Intellectual Property Division (IPD) which is dedicated to hear IPR matters. The High Court of Mumbai, Calcutta and Chennai are also following similar routes and are in the process of forming the rules.

The creation of IPD at the High Court of Delhi is a historic development which is in line with similar global practices in this regard and will help in the efficient disposal of IP matters, as well as in bringing consistency in precedents set by the Courts in the area of IP law. Considering all these developments, the USTR should revisit its decision and remove India from 'priority watch list.'

(The author is freelance journalist with varied experience in different fields)