Cabinet Secretary Ajit Seth will on Monday meet officials from various ministries to discuss concerns raised by the US on India’s management of intellectual property rights (IPRs), it is learnt.
The meeting comes just ahead of the release of the US Trade Representative’s (USTR’s) Special 301 report in May. Special 301 is a trade and industry practices report that identifies intellectual property rights offenders that could face trade sanctions and other countries whose IPR regimes are deemed to be an area of lesser concern.
India has been in the latter category since 1974 and was moved into the more sinister bucket in 1994 by President Bill Clinton. There are chances that India might this year again be labelled an IPR offender facing sanctions.
According to a government official who did not wish to be named, Monday’s meeting was called on the insistence of Foreign Secretary Sujatha Singh and India’s Ambassador to the US S Jaishankar, who suggested the government engage with American companies to discuss their IPR-related concerns.
Apart from Seth and Singh, Commerce Secretary Rajeev Kher, Health Secretary Lov Kumar Verma, and secretary for the Department of Industrial Policy and Promotion (DIPP), Amitabh Kant, are expected to attend the meeting.
US companies, particularly drug makers, are believed to be building pressure on the Obama Administration to designate India among the worst IPR offenders. Multinational drug companies, finding it difficult to protect their patents in India, have alleged that Indian laws are not compliant with international norms. They, too, are lobbying Washington.
The government is expected to discuss a strategy to address IPR concerns raised by US companies while safeguarding the interests of the public and the local industry, an official who did not want to be named said.
In 1994, India and other developing countries signed the World Trade Organisation’s agreement on Trade Related Aspects of Intellectual Property Rights, which required it to start granting patents on medicines no later than 2005. India changed its patent law only in 2005, unlike other countries which did it earlier.
Trade disputes between India and the US started escalating after 2010. The US dragged India to the WTO’s Dispute Settlement Body in 2011 over poultry imports, which India had banned from the US and other countries where bird flu was detected. India retaliated with a complaint against the US over import of steel rods.
The war over intellectual property reached reached a flash point last year when the Supreme Court denied patent protection to Swiss drug major Novartis for its cancer medicine Glivec.
Multinationals were already upset with India’s compulsory licence to generic drug maker Natco Pharma to sell a cheap version of Bayer’s cancer drug Nexavar, but the Glivec order created a stir around the world.
“The compulsory licence for Nexavar and the Supreme Court verdict on Glivec were major blows for US companies as these moves impacted not only their Indian market but sales globally. They now run the risk of other governments evaluating similar strategies,” a healthcare expert who did not want to be named said.
India maintains its patent law is in line with the WTO's requirements. It has also threatened to drag the US to the WTO if it is designated an IPR offender.
Experts said it would be a challenge for the new Indian government to take a stand that would protect local industry, investment as well as the public interest. “The new government will have to strike a fine balance. On the one hand, there is the interest of the domestic industry and consumers. On the other, is the need for foreign investment and technology,” an expert who did not wish to be named said.
India is the largest foreign supplier of generic medicines to the US, which is trying to curb its healthcare expenditure. For Indian drug companies, the US is a major market because they earn a big chunk of their export revenues there.
