Open Forum

New Delhi, 13 May 2009

US Watch List

INDIA MUST CURB IMITATION TRADE

By Dr PK Vasudeva

The annual report on alleged inadequate protection of US intellectual property rights released this month by the Office of the US Trade Representative evokes a mixed reaction. On the one hand it is heralded by patent-and copyright-based industries as a welcome step, on the other civil society groups are grossly unhappy with it.

The yearly Special 301 report unilaterally evaluates US trading partners on the effectiveness and adequacy of their intellectual property rights’ protections to combat counterfeiting, internet and digital piracy, or intellectual property as it relates to health policy. The report is broken out into a priority watch list and a lower-level watch list, and can ultimately lead to trade sanctions against offenders.

This year, the USTR has put 12 countries on the priority watch list - including new additions of Canada, Algeria and Indonesia - and 33 countries including India on the lower list. Other 301 highlights include: Proliferation of the manufacturing of counterfeit pharmaceuticals in Brazil, China, India, Indonesia, and Russia, and the sale and distribution of counterfeit drugs. Canada, France, Germany, Italy, Japan, New Zealand, Taiwan and Poland are also being eyed for innovation or pricing in the pharmaceutical sector, and other health-care service concerns.

Accordingly, Canada, China, Greece, Hungary, Korea, Poland, Romania, Russia, Spain, Taiwan, Ukraine and Vietnam are under special scrutiny for internet piracy, particularly the re-transmission of live sports telecasts over the internet. China, India, Indonesia, Malaysia and the Philippines were cited for piracy of movies, films, ring tones, games and scanned books in mobile devices like cell phones or flash drives, as were Bangladesh, China, India, Russia and Thailand for having to combat illegal optical disc production.

”In this time of economic uncertainty, we need to redouble our efforts to work with all of our trading partners - even our closest allies and neighbours such as Canada - to enhance protection and enforcement of intellectual property rights in the context of a rules-based system,” says US Trade Representative Ron Kirk, who is on the job.

Canada is in the position it is for not following through on recent commitments to implement stronger copyright reform, claims the US. The Americans also have “serious concerns” with its failure to accede to and implement the World Intellectual Property Organization (WIPO) “internet” treaties, and with the volume of infringing products shipped into the country.

“Canada’s weak border measures continue to be a serious concern for IP owners,” the report quotes. However, Canada has countered previously it does not recognise the 301 process as it is entirely industry-driven, according to Canadian law professor Michael Geist.

Algeria was elevated to the priority list because of the January law that bans some imported drugs and medical devices in favour of locally-made ones. As for Indonesia it has too been put on the priority list because of reasons including lack of implementation of optical disc regulations, ineffective prosecution of IPR crimes, counterfeit medicines and an ineffective national IP task force.

Interestingly, the US has been historically using the Special 301 list for political pressure, and both Algeria and Indonesia have been on its opposite sides on intellectual property policy issues at the World Health Organization (WHO) and the WIPO.

The two other countries on the priority watch list are Russia and China. The former was cited for slow implementation of 2006 agreements that include cracking down on optical disc and internet piracy, unfair commercial use of data, and border enforcement, whereas the latter has been blasted for its rogue “collecting societies” that negotiate licences with unauthorised websites. Beijing is raising eyebrows in the US for internet piracy and reports that officials are urging more lenient enforcement of IPR laws to protect jobs in a failing economy.

Given the background of the global economic downturn, dominant rights-holding nations, such as the US and Europe, have been heightening their focus on enforcement and protection. On a more positive note, for the first time since the Section report has been released, Korea is not on any watch list. It was removed after it made improvements to its IPR regime within the past year, although internet piracy is still a concern.

Despite New Delhi’s adoption of the product patents regime in early 2005, the US continues to retain India among the most severe category of countries accused of not providing an adequate level of IPR protection. On the other hand, Washington has taken Pakistan off the priority watch list of countries providing inadequate IPR protection after Islamabad improved its patent laws and enforcement machinery.

Officials in New Delhi need to make a note that the country is among the 48 countries that have been retained in the priority watch list 2006. The report specifies that: “India made some improvements to its IPR regime during the past year but IPR protection concerns remain due to inadequate laws and ineffective enforcement.”

“The United States urges India to improve its IPR regime by providing stronger protection for copyrights, trademarks, and patents as well as protection against unfair commercial use of undisclosed test and other data submitted by pharmaceutical companies seeking marketing approval for their products,” it elaborates even while calling on New Delhi to join and implement the WIPO treaties.

The World Intellectual Property Organization has been spearheading a global campaign to harmonise patent examination, search and grant standards in countries around the world. India is already a member of the WIPO but faces opposition domestically to implement all its treaties. Additionally, the US government, under pressure from its pharma industry lobbies, has been arguing with New Delhi for data exclusivity on new drugs introduced in India.

“India improved its patent protection regime when it passed legislation by amending Patent Act 1970 in early 2005 to provide for product patents for pharmaceuticals and agricultural chemicals. While this was a positive step, the new legislation has important omissions that detract from India’s patent regime. Additionally India’s copyright laws and enforcement system are weak,” is the USTR’s observation.

It noted that although New Delhi had pledged to improve the trademark regime, foreign trademark owners are experiencing difficulties “due to procedural barriers and delay”. In addition, India’s criminal enforcement of IPR is weak, with deficiencies in a number of areas including border enforcement, judicial dispositions and imposition of deterrent sentences.

It is thus time for India to sort out the mess. It must address the IPR issues especially the implementation part and take stringent action against the violators to curb the counterfeit trade. --INFA

 (Copyright, India News and Feature Alliance)