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THE onslaught has been concentrated and well-orchestrated. The opening salvo was fired at the hearing of the House of Representatives’ Ways and Means Trade Subcommittee on the state of India’s trade relations with the US. That was in March, and the testimonies of US industry chiefs portrayed India as protectionist and arbitrary. Then came a series of missives from industry organisations and lawmakers to President Barack Obama and Secretary of State John Kerry, all of them complaining about India’s patent laws and discriminatory trade practices. On June 27, there was a meeting of the House Subcommittee on Commerce, Manufacturing and Trade that was tellingly titled, ‘Tangle of Trade Barriers: How India’s Industrial Policy is Hurting US Companies’.
Three of India’s regulatory and policy requirements have been singled out for attack. The first is a crucial safeguard in India’s Patent Act of 2005, Section 3d, which bars extension of patents on new forms of a known substance. This is a regular practice known as evergreening that innovator companies use to extend the patent life of drugs. Pharma multinationals which have been engaged in a long running legal battle against the patent law faced their biggest setback in April this year when the Supreme Court upheld India’s patentability norms in the high-profile Novartis case involving its anti-cancer Glivec drug.
Since then, they have been using various forums to lash out at the country’s discriminatory policies (see ‘US pharma strikes back’, Down To Earth, June 16-30, 2013). The other two measures increasingly in the line of fire are mandatory local content in solar energy projects and the preferential market access (PMA) rules which impose local content requirements on procurement of information and communications technology (ICT) products by government and private sector entities. The US has already lodged a complaint at the World Trade Organization (WTO) on the solar issue.
Noting the seriousness of the charges on India’s patent regime which have hogged centrestage, Indian Ambassador to the US Nirupama Rao wrote to member of the Senate India Caucus in June that India’s patent regime was in compliance with the Trade Related Intellectual Property Rights (TRIPs) of WTO and that it was not discriminatory. “The highest share (20-30 per cent) of all patents granted in India has gone to US nationals and corporations. And, of all the patents granted for pharmaceutical inventions bet ween 2005 and 2011, more than 85 per cent were owned by foreign companies in India,” her letter pointed out.
To set right the misleading and exaggerated claims made by industry, the ambassador made it clear that just one compulsory licence (CL) had been issued so far. “It is important to understand the legal and public health context of such licensing. I wish to reaffirm that the provisions of the CL enshrined in the India Patent Act are in accordance with the provisions of the TRIPs Agreement and the Paris Convention.”
But this has been ignored by US experts commenting on India’s so-called discriminatory and protectionist measures. For instance, Stephen Ezell, senior analyst with the Information Technology and Innovation Foundation (ITIF), claims that India “has issued at least four CLs” and these were “granted on the specious grounds”. He has demanded the US International Trade Commission “initiate an investigation of how India’s mercantilist policies damage the US economy” as it did with China in 2011.
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