Context: Recently, the United States Trade Representative (USTR) has released its Annual Special 301 Report, which placed India on the 'Priority Watch List'.
Points of Concern

• India continues to be on the ‘Priority Watch List’ of the United States Trade Representative (USTR) for lack of adequate intellectual property (IP) rights protection and enforcement.
• The report said that India remained one of the most challenging economies for IP enforcement and protection.
• Countries like Algeria, Argentina, Chile, China, Indonesia, Russia, Saudi Arabia, Ukraine and Venezuela are also on the Priority Watch List.
• The report stated that India has further restricted the transparency of information provided on state-issued pharmaceutical manufacturing licenses and continues to apply restrictive patentability criteria to reject pharmaceutical patents. 
• It still has not established an effective system for protecting against the unfair commercial use, as well as the unauthorized disclosure of undisclosed test or other data generated to obtain marketing approval for pharmaceuticals and certain agricultural chemical products.
• The reports finds that India maintains an extremely high customs duties directed to IP-intensive products such as medical devices, pharmaceuticals, Information and Communications Technology (ICT) products, solar energy equipment, and capital goods.
• The USTR also noted that India was ranked among the top five source economies for fake goods by the Organization of Economic Development and Cooperation (OECD) in 2019.

Plus Point of this Report for India

• India had made “meaningful progress” to enhance IP protection and enforcement in some areas in 2019 and had acceded to the World Intellectual Property Organization (WIPO) Internet Treaties and the Nice Agreement.
• The Nice Agreement establishes a classification of goods and services for the purposes of registering trademarks and service marks (the Nice Classification).

Online IP enforcement in India has improved but progress is undercut by factors including :

• Weak enforcement by courts and the police.
• Lack of familiarity with investigative techniques.
• No centralised IP enforcement agency.

About Annual Special 301 Report of USTR

• The Special 301 Report is prepared annually by the Office of the United States Trade Representative (USTR) that identifies trade barriers to United States companies and products due to the intellectual property laws, such as copyright, patents and trademarks, in other countries.
• The Special 301 Report was first published in 1989. It identifies trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights.

Trading partners that currently present the most significant concerns regarding IP rights are placed on the Priority Watch List or Watch List. USTR identified 33 countries for these lists in the Special 301 Report:

• Priority Watch List: Algeria, Argentina, Chile, China, India, Indonesia, Russia, Saudi Arabia, Ukraine and Venezuela.
• Watch List: Barbados, Bolivia, Brazil, Canada, Colombia, Dominican Republic, Ecuador, Egypt, Guatemala, Kuwait, Lebanon, Mexico, Pakistan, Paraguay, Peru, Romania, Thailand, Trinidad & Tobago, Turkey, Turkmenistan, the United Arab Emirates, Uzbekistan and Vietnam.

About Priority Watch List and Watch List

• “Priority Watch List” and “Watch List” countries are identified by the annual Special 301 Report.
• “Priority Watchlist countries” are judged by the USTR as having “serious intellectual property rights deficiencies” that require increased USTR attention.
• “Watch List” countries have been identified by the USTR as having “serious intellectual property rights deficiencies” but are not yet placed on the “Priority Watchlist”.
• The USTR can move countries from one list to the other, or remove them from the lists, throughout the year.