[Ip-health] IP-Watch: Special Report: India Rocked By Report Of Secret Assurance To US Industry On IP

Thiru Balasubramaniam thiru at keionline.org
Tue Mar 22 09:36:39 PDT 2016

Special Report: India Rocked By Report Of Secret Assurance To US Industry

<http://www.ip-watch.org/author/patralekha-chatterjee/> FOR INTELLECTUAL

That the Indian government has been under pressure from the United States
to change its patent regime is no secret among those who follow the public
discourse on intellectual property rights. Now, a new controversy about
India’s alleged private assurance to the US-India Business Council (USIBC)
and other lobby groups that it would not invoke compulsory licensing for
commercial purposes seeks to add fuel to fiery speculation about a shift in
India’s policy on IPR.

The controversy pivots on a 5 February 2016 submission by the USIBC to the
Office of the United States Trade Representative (USTR) annual Special 301
report. The Special 301 Report is prepared every year by the USTR under
Section 301 as amended of the (US) Trade Act of 1974. The report aims to
identify trade barriers to US companies due to intellectual property laws
in other countries

The USIBC describes itself as the premier business advocacy organisation
representing more than 350 of the largest global companies investing in
India. In its submission to USTR last month, the Council stated: “Despite
compulsory licensing denials, Industry continues to be concerned by the
potential threat of compulsory licensing. The Government of India has
privately reassured [Industry] it would not use Compulsory Licenses for
commercial purposes. USIBC would be further encouraged if the Government of
India made a public commitment to forego using compulsory licensing for
commercial purposes and in public emergencies only, which would greatly
enhance legal certainty for innovative industries.”

Relations between India and the United States have improved sharply in
recent years but the two countries continue to lock horns when it comes to
IPR. India has been on the USTR’s Special 301 ‘watch list’ for years, much
to the chagrin of many within India.

The Government of India has neither confirmed nor denied the veracity of
these alleged private assurances which are now under media glare. Rajiv
Aggarwal, joint secretary in India’s Department of Industrial Policy and
Promotion (DIPP) tasked with overseeing Intellectual Property Rights as
well as Investment Promotion & International Cooperation for America, did
not immediately respond to queries from *Intellectual Property Watch* on
the matter.

The US-India Business Council, whose February 5 missive stirred the pot
this time, also has gone quiet. Sukanya Sen, a spokesperson of the USIBC,
told Intellectual Property Watch that “at this time, the Council is not
issuing any statements and will have to respectfully decline taking up any
further questions on the issue.”

But the tension between the requirements of public health and industry,
especially foreign investors, has never been resolved.Worries about these
“private assurances” comes at a time when the Government of India is in the
process of rolling out a national intellectual property rights (IPR)
policy. India has always maintained that its IPR regime is TRIPS-compliant
and aligned to the 2001 Doha Declaration on the TRIPS Agreement and Public
Health which reaffirms flexibility of TRIPS member states in circumventing
patent rights for better access to essential medicines. (TRIPS is the 1994
World Trade Organization Agreement on Trade-Related Aspects of Intellectual
Property Rights).

At the time of writing, the final text of India’s IPR policy is before the
Union Cabinet. No one knows its final shape nor when it is likely to be
released. However, a leaked draft <http://keionline.org/node/2340> that has
been in the public domain, courtesy Washington-based non-profit Knowledge
Ecology International, notes “In future negotiations in international
forums and with other countries, India shall continue to give precedence to
its national development priorities whilst adhering to its international
commitments and avoiding TRIPS plus provisions.” The draft says India will
continue to use flexibilities under the TRIPS agreement, and does not
recognise TRIPS-plus provisions such as patent linkage.

All this remains part of India’s publicly declared stand on IPR. But is
something shifting behind closed doors in backstage deals?

Health activists say they are extremely worried about India abandoning the
earlier consensus of adherence to public health goals under pressure.

“When CL [compulsory licence] provisions are used, prices decreases can
range from 50% to 97%, resulting in massive cost savings to governments and
patients, and a significant increase in the number of patients able to
access the medicines. This is the option, embedded in our national law,
which is being gifted away by the ‘private assurances’. It is a
disingenuous attempt to strike at the very heart of the legislative intent
embodied in the Indian Patents Act,” wrote Amit Sengupta, Associate Global
Co-ordinator, People’s Health Movement. In an article in The Wire

Sengupta points out in his article that David Hirschmann, the senior vice
president of the US Chamber of Commerce, uses exactly the same phrase
regarding “private reassurance” in his submission to the USTR. (Note: the
USIBC is affiliated with the US Chamber)

Medical charity Médecins Sans Frontières (MSF, Doctors Without Borders) has
also expressed its deep concern about the recent revelations in the media
that a US industry lobby group – the USIBC and US Chamber of Commerce – had
received verbal, private assurances from Indian officials that it will not
use ‘compulsory licensing’ for commercial purposes.

According to MSF, other IPR-related developments that can negatively impact
access to medicines include the following – the Indian Patent Office
embarking on the process of amending the patent rules to introduce fast
track patent examination.

This, MSF argues, “will undermine the ability of patient groups to file
pre-grant oppositions in time.”

MSF says it is also disturbed that “the USIBC – a group that receives
funding from pharmaceutical companies – was allowed to conduct training for
patent examiners who assess applications covering many life-saving
pharmaceutical products (medicines, vaccines, diagnostics). This allows the
US pharmaceutical industry who wants a more favourable patent regime to
influence India’s patent office decisions.”

Nationalist groups which support the Narendra Modi government in many other
areas are worried about what they perceive as increasing external pressure
in India’s domestic matters.

Ashwani Mahajan, author, academic and National Co-convenor of the Swadeshi
Jagran Manch which advocates self-reliance, told *Intellectual Property
Watch* “India’s patent regime is TRIPS-compliant and meets global
standards. There is no need for the United States to tell us what to do. Be
it section 3(d) of the Indian Patent Act , Compulsory Licenses or pre-grant
opposition – these are all part of our declared patent policy. This
controversy about private assurances is not good. I will take up the matter
with the Government.”

Interestingly, the Swadeshi Jagran Manch is the economic wing of the
Rashtriya Swayamsevak Sangh (RSS) which advocates a muscular Hindu
nationalism and provides the ideological fuel to the India’s ruling
Bharatiya Janata Party.

India’s drug-makers are taking a less strident stand on the controversy.
Some are upset that verbal assurances given behind closed doors are out in
the open. Some dismiss the controversy as hype.

“What are these ‘private assurances” that are being talked about so much?
These could have been just casual, verbal assurances which often happen
during talks. I see this as an example of lobbying by bodies like USIBC.
The aim is to pressure India. The government of India has not officially
said anything on the matter. Nor has there been any change in the patent
law,” Indian Drug Manufacturers’ Association (IDMA) Deputy
Secretary-General T R Gopalakrishnan told *Intellectual Property Watch*.
The IDMA has 900 members.

The Indian Pharmaceutical Alliance (IPA), which represents 20 big drug
makers, says India’s patent laws are fully WTO-compliant. However, “if the
government of India had said something privately, USIBC should not have
embarrassed it by making it public,” IPA Secretary General D.G. Shah told

As the storm rages on, the Alliance for Fair Trade with India (AFTI) has
applauded members of the House Ways and Means Committee for encouraging
USTR Michael Froman and Secretary of Commerce Penny Pritzker to allow more
US industry input and involvement in discussions with India (*IPW*, North
American Policy, 16 March 2016

The jury is out on whether India will continue to stand by the public
interest safeguards which are currently part of its patent law and which it
is entitled to as part of TRIPS flexibilities, both in policy and practice.
But in the near future, one thing seems certain. There is going to be
increased collaboration between American and Indian companies.

Speaking about the relationship between India’s generic drug makers and
multinational pharmaceutical enterprises, IDMA’s Gopalakrishnan felt
collaboration was happening and is likely to continue in the coming days
because of the commercial logic embedded in such deals.

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