[A2k] IP-Watch: US Businesses Urge Obama To Stoke Trade War With India

Thiru Balasubramaniam thiru at keionline.org
Fri Jun 7 03:58:40 PDT 2013


US Businesses Urge Obama To Stoke Trade War With India

Published on 7 June 2013 @ 12:25 am

By Kelly Burke for Intellectual Property Watch and William New

The heads of seventeen United States industry associations, including the
US Chamber of Commerce, today (6 June) issued a letter to President Barack
Obama alleging that the Indian government is engaging in discriminating
policies against US exports and encouraging swift action by the US
government. Among the concerns is the country’s treatment of patents.

The businesses expressed concern that recent policy decisions in India
undermine internationally recognised intellectual property standards
that are ultimately “jeopardizing domestic jobs.”

“Over the last year, the courts and policymakers in India have engaged in a
persistent pattern of discrimination designed to benefit India’s business
community at the expense of American jobs,” the letter [pdf] said. “These
actions are unacceptable for a responsible middle-income country and rising
global power to treat its second-largest export trading partner.”

The companies urged the Obama administration “immediately to initiate
bilateral engagement at the highest levels and to coordinate closely with
the European Union and other like-minded countries. If this engagement is
not fruitful, we ask the U.S. government to respond purposefully, using all
available trade tools and diplomatic engagement.”

Among other concerns, the letter said India’s administrative and court
rulings “have repeatedly ignored internationally recognized rights
– imposing arbitrary marketing restrictions on medical devices and denying,
breaking, or revoking patents for nearly a dozen lifesaving medications.”

Specific examples of India’s actions are not provided, but one recent
development that drew the ire of western companies was a defeat in
the Indian Supreme Court of a Novartis (the Swiss pharmaceutical company)
challenge to India’s patent law provision called Section 3(d), which raised
the bar on what can be considered a true innovation for patent purposes.
The court found Novartis’ Glivec (imanitib) cancer drug to not be
sufficiently innovative under the provision (IPW, Developing Country
Policy, 1 April 2013).

Other businesses that signed the letter include the National Association of
Manufacturers, Pharmaceutical Research and Manufacturers of America,
CropLife America, BIO, Telecommunication Industry Association, National
Foreign Trade Council, US Council for International Business, and Emergency
Committee for American Trade.

The language, tone and concerns of the letter resemble the testimony of the
Pfizer pharmaceutical company legal counsel before the House Ways & Means
Committee in March. In that testimony, the Pfizer official alleged that
India has continually defied trade rules, discriminated in favour of
domestic generic companies, and abused the international system allowing
compulsory licences (allowing cheaper generic production of patented
products such as medicines). Pfizer also asked the House committee to
review all available policy tools and trade benefits conferred on India by
the US, an observer said. Also, officials from the Office of the US Trade
Representative have increasingly raised concern about India, saying it is
hurting its economy through its actions.

Meanwhile, India has granted over 160 patents to Pfizer since amending its
patent law in 2005.

Western Monopolies

Western firms, which own the majority of the world’s patents and draw
extraordinary value from them, have regularly engaged in creative ways to
protect and extend the life of their patents, such as through what is
called “evergreening,” patenting of slight variation or improvements on
previously patented technologies. Companies do not see evergreening as
frivolous but rather an essential part of the research and development
paradigm. They seek the security and reliability of knowing their rights
will be protected when they invest in other countries. Meanwhile, reports
have been circulating in the western press that most drugs developed by
western companies in recent years have only been incremental improvements
on existing drugs.

India established a patent system under the terms of joining the World
Trade Organization, but in doing so, included the provision in its
2005 patent law that makes it more difficult for patents to be obtained or
extended. Western companies and other stakeholders have
regularly complained about low-quality patents being granted in their own
countries, but have not responded well to what they see as restrictions in
the profitable Indian market.

Companies in western countries regularly take out compulsory licences, as
allowed under the WTO Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS), to get access to patented technologies, but when
developing countries like India use them for essential medicines they are
harshly criticised for misuse of the TRIPS provision.

As a possible sign of the way a trade war can escalate, the US government
recently found serious flaws in the quality of an Indian generic
drug provider to the US market. That kind of action, if politically driven,
can lead to back and forth retaliatory measures.

Is it Real?

Meanwhile, a story this week in the Business Standard of India about a
visit by Indian Parliament officials to meet US lawmakers in Washington, DC
painted a highly positive picture of the bilateral relationship and gave no
indication of a brewing battle over IP rights. Rather, the officials said
that US-India relations have drastically improved over the last 15 years.

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