Resist bullying

The US has stepped back from the brink of declaring India ‘a priority foreign country’ for alleged violation of intellectual property rights but the US trade representative’s (USTR) threat of action against the country still remains.

The dispute between both countries over IPRs, especially in the pharmaceutical field, is long-standing and it aggravated recently  over India’s handling of drug patents. Drug majors, which wield influence on US policy, have campaigned with the administration to penalise India. India, as a result, was in the ‘priority watch list’ of countries with a lax IPR regime. The next step would have been to designate India as a violator of IPRs in the 2014 Special 301 report which was issued last week. That would have led to possible trade sanctions against India, a confrontation and deterioration of relations.

But the threat is still real because India continues to be under the watch list and the USTR’s statement says action has been deferred because elections are currently under way in India. The whole process is a reaction to some Indian actions which are considered to be against the interests of the pharma multinationals. In March 2012 India issued compulsory licence to an Indian company for a cancer drug which its patent-holder Bayer had priced exorbitantly.

Last year, the Supreme Court upheld a decision of the patent office to deny another pharma major patent on a drug for which it claimed patent after making only marginal changes in the composition. It has been the practice of drug companies to claim patents after ever-greening their products. The Indian patent law rejects such contrived methods of claiming patents.

 Compulsory licensing is also a legal procedure to be adopted when monopolies are misused.

The Indian law is compliant with Trade-Related Aspects of Intellectual  Property Rights (TRIPS) agreement which has given enough latitude to the signatories to frame their laws in accordance with the need to protect their interests. India has told the US that its patent regime is WTO-compliant and that it would take the matter to the world trade body if the USTR goes ahead with its threat. It has also made it clear that it would not co-operate with the US in the investigation currently on in that country on the issue. There is no case for India to soften the stance.