International politics and IPR

Dr R Saha, Senior Adviser, CII elaborates on the robustness of India’s IPR regime particularly related to laws and the judicial system

The recent WTO’s Trade Policy Review (TPR) in respect of India has put to rest any misgivings about the robustness of India’s IPR regime particularly related to laws and the judicial system. The TPR covered the Indian IPR system in reasonable detail, describing the basic features of Indian IPR laws, administration, policy initiatives and important court judgments. Nowhere does the TPR state that India is not compliant with TRIPS and WTO. India’s stand on its IPR laws being compliant with TRIPS is fully seconded by WTO. Surprisingly, agencies like United States Trade Representative (USTR) do not think that India’s IPR regime is TRIPS compliant. A close look into USTR’s findings reveals an element of partiality and a repetition of thoughts over years. TPR has appreciated the progress made by India in designing and building its IPR regime in the last four years. It has discussed Section 3(d) in the context of the Supreme Court’s decision but it does not find anything wrong with this provision of the Indian Patent Act. While quoting the compulsory license (CL) case (NATCO v Bayer), TPR also referred to requests for CL rejected by the Patent Office implying that India is taking a balanced view in the matter. In his final remarks, the Chairman of the Review Committee expressed the concerns of some members regarding protection of trade secrets and test data but nothing to question India’s compatibility with TRIPS. Despite this, it may be flagged that in all future bilateral discussions, there would be explicit pressure on India to have new laws on trade secrets and test data.

Indian laws, especially in relation to exclusions of inventions from patentability, have been keenly studied by many developing countries. Section 3(d) of the Indian Patent Act brings relief to patients from expensive drugs based on secondary patents by laying strict criterion of inventiveness/ obviousness. Recently, the Federal Circuit of US Appeal Court invalidated Pfizer’s reissue patent on ‘Celebrex’, a medicine for arthritis, and declared it a case of obvious-type double patenting. The judgment would be a big relief to Lupin, the Indian pharma company as it opens the road to market the generics of Celebrex in the US.

It is reported that Brazil and Argentina are contemplating introducing provisions similar to Section 3(d) in their patent laws. Other developing countries may follow suit. This may be a cause of concern for developed countries and their large corporations. Could this be a reason for the developed countries taking a rather strict and unexplainable negative view on the Indian patent law? Absence of provisions like those in Section 3(d) would encourage secondary patents and follow-on drugs which tend to suppress the market of generics despite the generics being much cheaper. This usually happens through the active participation of prescribing doctors and health delivery systems which are influenced by big companies, through their powerful and wide marketing network in many countries. Obviously, patients are made to spend more on medicines if the generics market is not allowed to grow. It may be noted that the problem of expensive medicines will be faced by patients of all countries including the most developed ones. This may apply more to medicines for cancer, AIDS etc. All nations have to address this issue seriously.

India’s support and commitment to multilateral arrangements for promoting and strengthening global trade and commerce has been acknowledged and praised in the TPR. Multilateral trade agreements address the needs of more than 150 countries. Let us examine this with the trend being set up by a few select countries for promotion of non-multilateral IPR arrangements which is becoming a point of serious concern for the remaining member countries. In the past few years, three important developments have come to light namely, Anti-counterfeiting Trade Arrangement (ACTA), IP 5 and Trans Pacific Partnership (TPP). Most of the discussions in this respect have been held behind closed doors.

IP 5 is a step towards harmonisation of patent rules and practices among participating countries namely, the US, the EU, China, Japan and South Korea. It may become a supporting point for member countries of WIPO to support, at some point in time, the Patent Law Treaty (PLT) and the Substantial Patent Law Treaty (SPLT). India has not become a member of PLT and SPLT because there is considerable doubt on whether a level playing field would be available to developing and least developed countries. China’s participation in IP 5 needs to be closely followed as it may influence discussions in BRICS. It goes without saying that the existing multilateral arrangements like TRIPS may also undergo some changes due to arrangements like IP 5 which may not be in the interest of India and other developing countries.

The Anti-Counterfeiting Trade Agreement (ACTA) is an agreement to create new global intellectual property (IP) enforcement standards in respect of copyrights and related matters, and trademarks. The text of the ACTA is now available in public domain and it can be seen that it talks of severe damages, and of provisional measures to be adopted by authorities while disposing infringement suits. The provisions are quite tough in regard to digital technologies. In order to avoid circumvention of effective technological measures, people and companies engaged in the manufacture, importation or distribution of devices including software used for circumvention would be subject to penalty. An important question to be pondered over is “Who are the designers and suppliers of such devices?” Aren’t they from the developed countries? An ACTA Committee would oversee the functioning of the Agreement and will also be the settlement body in case of disputes. One does not know at this stage about the likely erosion of the importance of the Dispute Settlement Board (DSB) under WTO. All these are TRIPS plus provisions being pushed by a few nations and may become important features during negotiations on Free Trade Agreements (FTA). However, even the original signatories have not yet ratified the Agreement. The EU refused to ratify it in 2012. One view could be that if there is no unanimity among such a smaller number of countries, how could it possibly influence multilateral arrangements substantially or otherwise?

Details of discussions of TPP are not available in the public domain. However, many reports do appear in media and Internet which have disclosed many important features of the trend in the thinking of countries participating in close room discussions. The 12 nations negotiating TPP are: the US, Japan, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand and Brunei. This would represent 40 per cent of world trade, according to WikiLeaks. Among many provisions, which may lead to a TRIPS plus situation, the important ones are listed here. TPP is aiming to have provisions that would help extending patent-term based on clinical data exclusivity including for biological vaccines and medicines. It is likely to facilitate secondary patenting by pharmaceutical companies (by completely removing provisions similar to those of Section 3(d) of the Indian Patent Act), which would block competition by more affordable generic drugs. Further, nations may be required to accede to the 1991 version of UPOV as well as provide for patenting of plants and genes in plants. Such provisions would be damaging to small farmers in developing countries and may also lead to a possible extinction of climate friendly plants developed by various farmer communities across the world. The beneficiaries would be large agricultural corporations. TPP also favours declaring of trade secret violation as a criminal offence. It is interesting and intriguing that all the negotiating countries are not on the same page; apparently TRIPS plus requirementsare being pushed by Japan and the US.

Trade secrets are being discussed vigorously in many platforms within and outside India. Efforts are on to make trade secret violations a criminal offence so that the rules are in line with those of the US and Japan. Historically, the whole issue of trade secrets became a central point of late because of discussions in the Silicon Valley when emerging IT industries started facing the problem of quick attrition. Do we have a similar situation in India and other developing countries? We must anticipate that these developments e.g., trade secret violations being treated as a criminal offence, will find its way into future discussions in TRIPS Council and also in bilateral FTAs. Strong trade secret laws may have multiple benefits for companies and perhaps some governments too. However, these can be used to stop easy flow of information in a democracy. Even journalistic freedom, so essential for democracies, may be seriously compromised. A careful and considered view needs to be taken whether India and other democracies need a separate law or not.

Developing countries need to be alert about these developments and take special note of the damaging stance taken by some developed countries especially in regard to public health and agriculture. Countries not having a developed drug industry may be big losers. The more complex issues relating to trade secrets, data exclusivity, digital rights management etc. may be better addressed through a common platform of developing countries. Authorities engaging in bilateral and plurilateral negotiations should not be happy winning an argument in a meeting or two but keep a long-term view in focus as well.

(The views expressed above are that of the author)