Patently misleading: India's IP regime not as poor as made out to be

The International Intellectual Property Index 2018, issued by the Global Innovation Policy Centre (GIPC) of the US Chamber of Commerce, which places India close to the bottom at 44 among the 50 assessed nations regardless of appreciable improvement in its score on various counts, lacks adequate conviction to be taken at its face value. India’s score of over 30 per cent (12.03 points out of 40) in this index marks a tangible ascend over 25 per cent (8.75 out of 35) in the previous year. This, according to the GIPC’s own reckoning, is the largest percentage improvement for any participating country. Besides, the index report admits marked advances made by India in at least four critical areas: Patenting environment for computer-related inventions; injunctive relief against copyright infringing websites; recognition and protection of well-known trademarks; and intellectual property (IP) awareness and education.

Though the report also lists some weaknesses in the Indian IP regime, these are not entirely incontrovertible. Many of these reflect primarily the perceptions of the US and other rich countries, discounting the needs of developing societies. The contentious areas include a framework for the protection of life sciences IP; non-conformity of patentability norms with international standards; lengthy pre-grant patent challenge procedures; provision for compulsory licensing; and limited participation in international IP treaties. The Indian IP system is governed by the Patents Act, as amended in 2005 and 2012. It is totally consistent with the global agreement on Trade-Related Intellectual Property Rights (TRIPs) and the flexibilities allowed under it to developing countries to protect their domestic industry and public interest. Even the provision for compulsory licensing, which allows organising local production of patented products (read drugs) to meet exigencies, does not violate the TRIPs.

What truly seems to upset the US and other developed countries is the unambiguous and strict definition of patentability in the Indian law. It does not allow evergreening of patents on trivial grounds and without any significant incremental innovation. Instead of permitting perpetuation of control over products through patent extension, the Indian law seeks to strike a balance between patent-based monopolies and the wider public interest. Similarly, the objection regarding low participation in global IP treaties is also not entirely tenable. India is a member of several agreements in this field, which automatically extends applicability of trademarks to nearly 90 countries.

Nevertheless, regardless of these misgivings, the IP index cannot be totally ignored as it is deemed a precursor to the annual Special 301 report of the Office of the US Trade Representative (USTR) which judges countries on the basis of their IP environment. India has, for some years, been kept on the “Watch List” of the 301 report which contains countries whose IP regimes are deemed of concern. This position now seems unlikely to change this year as well, thus, sending misleading signals to prospective investors in innovation-intensive sectors, particularly the pharmaceutical industry, which has the potential to make India the pharmacy of the world. Well-judged efforts are, therefore, imperative for India to counter this disinformation. Measures are also needed to improve enforcement of IP protection rules to curb infringement of patents through forging and counterfeiting.