India's personal data protection bill may threaten innovation, growth: USTR

The US on Thursday raised concerns over India’s Personal Data Protection (PDP) Bill and draft non-personal data governance framework, claiming these could potentially threaten innovation and economic growth.

In its latest ‘Special 301’ Report, the US Trade Representative (USTR) kept India on the priority watch list, maintaining the country remains one of the world’s most challenging major economies with respect to protection and enforcement of intellectual property (IP).

“In December 2021, a joint parliamentary committee released a report recommending changes to the PDP Bill, 2019, that could undermine important IP protections in India. Among these recommendations was the enlargement of the Bill’s scope to include further regulation of non-personal data instead of addressing that issue under separate legislation. The US on several occasions and in various fora raised IP concerns regarding the potential implementation of India’s data governance regime. These concerns are particularly acute, given India’s outdated and insufficient legal framework for protecting trade secrets. On this and other potential legislation affecting IP, the US encourages India to undertake a transparent process that provides stakeholders with sufficient opportunity to comment,” it added.

India has over the years rejected the observations in the ‘Special 301’ Report, maintaining it was a unilateral report of the US government and India was fully compliant with multilateral IP regulations.

The USTR said patent issues continue to be of concern in India.

“The potential threat of patent revocations, lack of presumption of patent validity, and the narrow patentability criteria under the Indian Patents Act impact companies across different sectors. Moreover, patent applicants continue to confront costly and time-consuming pre- and post-grant oppositions, long waiting periods to receive patent grants, and excessive reporting requirements. Stakeholders continue to express concerns over vagueness in the interpretation of the Indian Patents Act,” it added.  

The report said while India made meaningful progress to promote IP protection and enforcement in some areas over the past year, the country has failed to resolve recent and long-standing challenges, and has created new concerns for IP rights holders.

“The US is monitoring India’s next steps, including any actions taken following the Department for Promotion of Industry and Internal Trade’s October 2020 solicitation of public comments on amending the Indian Copyright Act. The Cinematograph (Amendment) Bill, 2019, containing promising provisions to criminalise unauthorised camcording of films, continues to await Parliament approval. However, in June 2021, the Ministry of Information and Broadcasting sought public comments on a proposed Cinematograph (Amendment) Bill, 2021, which incorporates revisions to the 2019 Bill. The US is monitoring this proposed Bill,” it added.

The US blamed India for counterfeit medicines, holding that trademark counterfeiting continues on a global scale and involves the production, transshipment, and sale of a vast array of fake goods.

“The majority, by value, of all counterfeit pharmaceuticals seized at the US border in 2020-21 was shipped from or transshipped through India, China, and the Dominican Republic. A recent study by the Organisation for Economic Co-operation and Development and the European Union Intellectual Property Office found that China, India, the Philippines, Vietnam, Indonesia, and Pakistan are the leading sources of counterfeit medicines distributed globally,” it added.

The report said despite India’s justifications of limiting IP protections as a way to promote access to technologies, India maintains high Customs duties directed to IP-intensive products, such as medical devices, pharmaceuticals, information and communications technology products, solar energy equipment, and capital goods.

“In the pharmaceutical (pharma) sector, the US continues to monitor the restriction on patent-eligible subject matter in Section 3(d) of the Indian Patents Act and its impact. Stakeholders also continue to raise concerns as to whether India has an effective system for protecting against the unfair commercial use, and unauthorised disclosure, of undisclosed test or other data generated to obtain marketing approval for pharma and agricultural chemical products,” it added.