[Ip-health] Will India, US Bridge Divide Over Intellectual Property Rights?

Claire Cassedy claire.cassedy at keionline.org
Wed Dec 10 09:01:13 PST 2014


Will India, US Bridge Divide Over Intellectual Property Rights?


There is an uptick in India-United States relations. US President Barack
Obama will be in India in January as the chief guest at the country’s
Republic Day Parade. Obama, who hosted India’s new Prime Minister Narendra
Modi in Washington in September, will become the first US president to
attend such a celebration, a display of India’s military might and ethnic
diversity, as well as the first to visit India twice while in office.

A deal between India and the US on the contentious issue of public
stockholdings of foodgrains for security has helped put global trade
negotiations back on track.

“We believe in the promise of India,” US trade representative Michael
Froman told a business audience in Delhi during his visit in November this

All this augurs well for expanding ties between the two countries after the
low last year following the US arrest of an Indian diplomat. However, a key
issue, intellectual property rights (IPR), a bone of discord between the
two countries, is once again generating hard questions.

Beyond the optics and symbolism, what changes can one expect?

India’s Commerce and Industry Minister Nirmala Sitharaman has announced
that the country will soon have its own IPR policy. The India-US joint
statement during Prime Minister Modi’s recent visit to the US is committed
to establish an annual high-level Intellectual Property (IP) Working Group
with appropriate decision-making and technical-level meetings as part of
the Trade Policy Forum.

The Department of Industrial Policy and Promotion (DIPP) has constituted a
6-member IPR Think Tank to draft India’s National Intellectual Property
Rights Policy and to advise the DIPP on IPR issues. And last month, a
high-level delegation from the Intellectual Property Owners Association of
the US or IPO came down to India.

So are differences between India and the US on the thorny issues
surrounding IPR likely to be narrowed? Experts are cautious in their

“The trip to India last week was very useful to us for learning about IP
protection in India and exchanging information on the US and Indian
systems. We are hoping for a narrowing of differences between India and the
US on IPR, but it is too early to say whether the public statements,
including the November 25 India and United States Joint Statement on the
Trade Policy Form, will achieve a narrowing,” Herb Wamsley IPO Executive
Director told Intellectual Property Watch.

Walmsley said the IPO delegation met with the Department of Industrial
Policy and Promotion and discussed the “Make it in India” campaign. They
also met with industry representatives while in India.

“Articles in the press in India before and during our trip highlighted that
healthcare activists in India have a very different view from ours about
patent protection for pharmaceuticals,” Walmsley conceded, adding, “We all
want access to quality healthcare and affordable medicines, but IPO also
believes it is important to use the patent system to encourage investments
in new medicines and medical devices that can improve healthcare worldwide.”

The Organisation of Pharmaceutical Producers of India (OPPI), which
represents the research-based pharmaceutical companies in India, is equally
guarded in its reactions.

”We are glad that Government initiated discussion with the industry and
expressed a willingness to engage in constructive dialogue to address
intellectual property concerns and also resolve regulatory, quality, and
safety challenges in India. There is a need for innovation in healthcare
and we must demonstrate India’s genuine interest in fostering local
innovation and improving patient access to new medicines. The recently
announced Think Tank for formulating a national IPR policy is a good idea,
but its membership lacks a diversity of perspective. We are disappointed
that the research-based industry finds no representation at all!” Ranjana
Smetacek, OPPI spokesperson told Intellectual Property Watch.

Significantly, health activists are equally unhappy about the composition
of the IPR Think Tank. Speculation is rife about the choice of members of
the Think Tank who are tasked to draft the National IPR Policy. But the
Think Tank members themselves

have not made any public statement. The DIPP website invites comments
regarding the proposed l IPR Policy.

“Although the US pressure in the recent months has rattled the Indian
Government and public health activists, I think it is difficult to imagine
any immediate any substantial changes in the functioning of India’s patent
system. The changes, if any, may be incremental in terms of exercise of
administrative discretion and also by offering more clarity on patent
office practices. India’s stand on disengagement with the United States on
Section 301 Out-of-cycle review process initiated by the USTR only confirms
that India wants play by global multilateral trade rules. It wants to
benefit from the flexibilities enshrined in the TRIPS Agreement,” Yogesh
Pai, assistant professor of law at the National Law University, Delhi told
Intellectual Property Watch.

The reasons are not far to seek. “India’s IP regime is TRIPS-compliant. Any
substantial change through legislative amendments to dilute public policy
safeguards is politically sensitive. Similarly, it’s even more difficult to
drive case-law jurisprudence in a direction that US delegations would
anticipate owing to a strong and independent judiciary. However, I have a
feeling that administrative discretion may be streamlined and/or diluted to
some extent. The target may also be changes in patent office practices. The
least that these delegations will achieve is to have some clarity and
consistency in patent office practices specifically in relation to the
implementation of Section 3(d) of the Indian Patents Act,1970,” Pai

Pai was one of the academics consulted by the new government earlier this
year on IPR-related issues. However, at the time of writing, the fate of
the inputs given by the academics is not known.

Another Indian academic, Dinesh Abrol, professor in the Delhi-based
Institute for Studies in Industrial Development, also asserts that IPR is a
multilateral issue and questions the need to discuss it with the US in a
bilateral forum.

“India’s IPR regime is fully TRIPS-compliant. Why did we agree to a
bilateral mechanism to deal with it? Abrol told Intellectual Property Watch.

”The pointers are very clear. At the start, the government is unlikely to
change the law because that would have to go through the Parliament. But
changes could be through the IPR policy,” Abrol said.

Many organisations and individuals from across India have collectively sent
a letter [pdf] to the Prime Minister Modi, expressing their concerns on the
Joint Working Group on Intellectual Property (IP) set up between India and
the US.

So is India really buckling under US pressure?

“Partly,” says D G Shah, secretary general of the Indian Pharmaceutical
Alliance. “As the Department of Industrial Policy and Promotion (DIPP) has
become very cautious for grant of Government Use (Sec 92) CL, dealing with
special provisions for compulsory licenses on notifications by central
government. It wants to ensure that the Ministry of Health and Family
Welfare has adequate funds to make use of the CL [compulsory licence] and
that it has shortlisted companies with capabilities to produce the drug. It
should not happen that a CL is issued but none applies to manufacture it.”

“As regards Private Commercial Use (Sec 84), the experience of NATCO is a
deterrent,” Shah told Intellectual Property Watch. “Bayer, through a series
of litigations initiated against NATCO, has succeeded in pre-empting others
from considering this an option. Moreover, CL for India alone may not be
commercially viable. NATCO was expecting that a few other countries will
use TRIPS provision to allow imports from India. This has not happened….”

“India is negotiating its domestic intellectual property policies with the
United States,” James Love, director of Knowledge Ecology International, an
international NGO, told Intellectual Property Watch. “There may be some
effort to claim that India is asking the United States to change its
policies too, but this will just be an exercise in public relations. The
negotiation is about the US telling India what to do, and not the other way

“If India wanted to avoid the predictable unfairness and avoidable death
that higher levels of intellectual property protection will mean in the
area of medicines, it would show more leadership in the delinkage debate,
and demand Obama explain why high drug prices are better than delinkage,”
he said. “If the debate shifts to delinkage compared to monopolies, then
India has the high road as regards innovation, and the US can be forced to
engage in the most important reform – the only one that is both sustainable
and consistent with access for all.”

Love said the delinkage debate refers to the system of granting 20-year
monopolies on patented inventions, which does not work well for medicine,
where concerns about access, fairness and monopoly loom large. “The
delinkage alternative is to use other mechanism to stimulate research and
development, not tied to the price of the drug or the grant of a monopoly.
This would include most importantly research grants and large cash prizes
to reward successful innovations,” he said.

Professor Brook K. Baker of Northeastern University’s School of Law (US)
says there are several signals that India is trying to mollify the US with
respect to intellectual property and investment policy.

“On the medicines front, the (Indian) government has recently retracted
some of its proposed price control measures. It is backing off compulsory
licensing plans for cancer medicines, including Dasatinib despite the
Health Departments strong support for accessing cheaper generic
chemotherapy drugs. Government officials and leaders have been meeting with
US industry representatives both in the US and in India, and the government
is opening up India’s internal policy dialogue to US input both by
government and industry representative,” Baker said.

“Throughout this process,” Baker told Intellectual Property Watch, “the US
continues to harp on section 3(d) of the India Patents Act, which prevents
evergreening of patent monopolies, on compulsory licences, on data
exclusivity (now possibly through the side door of increased trade secret
protection), on enhanced enforcement, and on a more secure and stable
investment climate (a possible precursor to an investment clause with
investor-state dispute resolution).”

On the fundamentals of resisting evergreening, Baker thinks it is unlikely
that India will weaken section 3(d) and that it will stay opposed to ever
greening. However, on compulsory licensing, he said, “there may be a real
risk of a de facto moratorium, particularly as the government is now
talking about cancer drug price controls rather than compulsory licenses
for generic production. The more the US and industry have a chance to lobby
government behind closed doors, the more likely it is that the government
might make changes to create ‘a more favorable investment climate.’ “

This pressure, he told Intellectual Property Watch, “will intensify when
President Obama visits India for a second time next year. I don’t see the
US getting all that it wants, but danger of leadership accommodation is
real. To preserve India’s status as the pharmacy of the poor, I hope India
stands firm.”​

But Leena Menghaney, South Asia manager for Médecins Sans Frontières
(MSF)’s Access Campaign, told Intellectual Property Watch that it is
difficult to predict the position that India’s new government will
eventually take on IPR.

“If you see India’s statement at the TRIPS Council on innovation,” she
said, “it is very progressive, and talks about new business models and
specifically refers to market failure as the reason for the inadequate
state of antibiotic development. It also states that innovation should not
be viewed within the narrow prism of intellectual property monopolies but
framed within a holistic, knowledge ecosystem that includes open
innovation, open knowledge approaches and the de-linkage of R&D costs from
product prices.”

But in the India and United States Joint Statement on the Trade Policy
Forum, under the heading Intellectual Property and related issues, Minister
Nirmala Sitharaman together with USTR Froman state: “the paramount goal of
ensuring the poorest populations in India and the United States have access
to quality healthcare, and committed to identifying ways in which trade and
innovation policies can enhance access to quality health and affordable
medicines” Menghaney said.

Menghaney and other health activists vigorously assert that over the last
decade, India has established a balanced position on the patent system and
that while India does grant patent monopolies to a number of new
pharmaceutical products, it is trying to strike a balance between providing
IP protection and having the legal flexibility to protect the right to

“India’s new prime minister is in a unique position of responsibility in
global health,” she said. “His handling of the intense pressure from the US
successfully without undermining access to medicines will be key to India
retaining its standing as the pharmacy of the developing world, on which
MSF and millions around the world rely.”

In the tug of war between sections of the industry and health advocates,
both are keeping score. Public health groups say even if India is under
pressure, they have had victories. Activists successfully prevented
meetings reportedly scheduled between a visiting delegation of US industry
and judges of the Delhi High Court and the Intellectual Property Appellate
Board in Chennai by publicly questioning the propriety of such discussions.
That pressure is likely to be sustained in the days ahead.

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