India stays on US watchlist for weak IPR protection

India will continue to be on the priority watchlist of the United States Trade Representative (USTR), the chief trade negotiator of the US government, due to inadequate intellectual property (IP) compliance.

The decision to retain India came after intense lobbying by the US pharmaceutical industry, which complained that India did not have adequate provisions for protection of pharmaceutical test data, required by the Trade-Related Aspects of Intellectual Property Rights (Trips) agreement of the World Trade Organisation.

The 2007 Special 301 Report of the Office of the USTR, released on April 30, states that the US remains concerned about inadequate IPR protection and enforcement in India.

It urges India to improve its IPR regime by providing stronger protection for copyrights, trademarks and patents and protection against unfair commercial use of data to obtain marketing approvals.

"A significant contributing factor in this problem is the unauthorised use of bulk active pharmaceutical ingredients (APIs) to manufacture counterfeit pharmaceuticals. Countries must do more to provide its relevant agencies with the authority to regulate and enforce against the unauthorised use of APIs domestically and to ensure that they are not exported for unauthorised use abroad," the report says.

Gajanan Wakankar, executive director, Indian Drugs Manufacturers' Association (IDMA), said the US decision was on expected lines. "However, the US has so far not taken any adverse measures other than including us on the list. It is an indirect pressure. We can expect the pressure to continue," he said.

The Pharmaceutical Research and Manufacturers of America (PhRMA), in its submission to the USTR prior to the report, wanted India to be designated as a priority watchlist country in 2007 for a variety of reasons, including non-compliance with data protection provisions and counterfeit drug problems. It felt that the "standards for patentability" of Indian patent law were inconsistent with the Trips agreement, depart from mainstream international practices or are not transparent.

"The Indian law does not allow second use and method of treatment patents. Further, Section 3 (d) of the Patents Act 1970, as amended by the Patents (Amendment) Act 2005, creates additional hurdles for pharmaceutical patents," the PhRMA submission said.

It is this very clause that has been challenged by Swiss drug major Novartis AG in the Chennai High Court.

Organisation of Pharmaceutical Producers of India (OPPI), the Indian grouping of multinational research-based drug companies, declined comment.

"I am yet to see the USTR report. OPPI has been very consistent in its argument that India needs to provide five-year data exclusivity for pharmaceuticals. We also feel that patents should not be restricted to new chemical entities," said Ajit Dangi, director general, OPPI.