US keeps India out of Priority Foreign Country list of 'worst IP offenders'

US Trade Representative's Special 301 Report keeps up pressure on India to fall in line with US’ interests
US keeps India out of Priority Foreign Country list of 'worst IP offenders'

Brushing aside pressure from industry, the US government has opted not to put India in the Priority Foreign Country (PFC) category, which is reserved for the “worst offenders” vis à vis protection of US' Intellectual Property Rights (IPR). The annual review of the US Trade Representative (USTR) has, however, retained India in the “Priority Watch List” of countries where there is high concern regarding insufficient IPR protection or limited market access for a person relying on intellectual property protection.

The US Chamber of Commerce along with multi-national drug companies had been asking the US government to put India in the PFC category for some time now. 

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At the same time USTR has announced a more in-depth investigation into Indian patent law (called an out-of-cycle review), through which it will maintain ongoing and increased pressure on India. 

USTR's Special 301 Report mentions of India along with Algeria, Argentina, Chile, China, Indonesia, Pakistan, Russia, Thailand and Venezuela under its Priority Watch List. Referring to India, the report has claimed that a few recent steps taken by government of India raised serious concerns about the innovation climate in India. It is a reference to the court order which granted compulsory licence to local drug manufacturer NATCO Pharma of high-end cancer drug named Nexavar.

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The report has expressed concern over “actions and policies in India that appear to be favouring local manufacturing or Indian IP owners which distorts competitive landscape.” It also mentions India’s Drug Price Control Order (DPCO) which imposes price restriction on 348 medicines, but provides some relief to locally manufactured medicines. There is, however, no mention of the name of the company and drugs.

The report has also expressed concern over trade secret protection in India, particularly the reported difficulties in obtaining remedies and damages. In connection with piracy, the report says the US continues to seek change in Indian Copy Right Act and related rules.

Renewed pressure for new government
The report has clarified that it will redouble its efforts with the new government “to improve IP protection and enforcement in India”. It will also initiate an out-of-cycle review of India to assess the progress.

Experts say these efforts are meant to maintain increased pressure on India. One of the biggest producers of quality generic medicines in the world, India has been facing pressure by the US government and the multi-national pharmaceutical industry over “insufficient enforcement of intellectual property”. 

"USTR is using every single intimidation and pressure tactic it has at its disposal at India. This is just the latest example of how USTR is attempting to penalise India for not bowing to the endless efforts of the multinational pharmaceutical industry to severely restrict generic competition in India and worldwide,” said Médecins Sans Frontières (MSF), an international organisation which works with patients on humanitarian ground. 

"The USTR is painting India as a rogue government, when in fact every action in India’s efforts to secure access to affordable, lifesaving medicines is fully consistent with global trade rules. India is playing by the rules, and USTR knows it. India’s policies have saved lives. It’s an example that should be followed, not criticised,” said MSF (see 'Testing the CL route'). It added that other countries are now considering legislation similar to that in India, which in turn has worried the US pharmaceutical industry. By their effort, it is visible that they are now seeking to curb India’s influence in global patent reform efforts which have the potential to increase access to medicines for millions in need in developing countries, said MSF. 

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