Context: The United States has again placed India on its ‘Priority Watch List’.

India has been on the priority watch list reportedly for over 25 years, for “lack of sufficient measurable improvements to its IP framework that have negatively affected US right holders”.

The office of the US Trade Representative identified 11 countries, including India, in its ‘Priority Watch List’. The list topped by China also includes Indonesia, Russia, Saudi Arabia and Venezuela. Besides this, the US Trade body has placed 25 countries, including Pakistan, Turkey and the UAE, on the watchlist.

What is priority 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.

Why India is placed under this?

Lack of sufficient measurable improvements to its Intellectual Property (IP) framework on long-standing and new challenges, which has negatively affected American right holders over the past year. India remains one of the world’s most challenging major economies with respect to protection and enforcement of IP.

• Long-standing IP challenges facing US businesses in India include those which make it difficult for innovators to receive and maintain patents in that country, particularly for pharmaceuticals, insufficient enforcement actions, copyright policies that do not properly incentivise the creation and commercialisation of content, and an outdated and insufficient trade secrets legal framework.
• India also further restricted the transparency of information provided on state-issued pharmaceutical manufacturing licenses, and expanded the application of patentability exceptions to reject pharmaceutical patents.
• India also missed an opportunity to establish an effective system for protecting against the unfair commercial use, as well as the unauthorised disclosure, of undisclosed test or other data generated to obtain marketing approval for certain agricultural chemical products.
• Last year it engaged with India to secure meaningful IP reforms on long-standing issues, including patentability criteria, criteria for compulsory licensing and protection against unfair commercial use, as well as unauthorised disclosure, or test of other data generated to obtain marketing approval for pharmaceutical products.

Implications:

1. Countries under priority watch list will be the subject of increased bilateral engagement with the USTR to address Intellectual Property (IP) concerns.
2. USTR would be reviewing the developments against the benchmarks established in the Special 301 action plans for countries that have been on the ‘Priority Watch List’ for multiple years.
3. For countries that fail to address US’ concerns, the USTR will take appropriate actions, such as enforcement actions under Section 301 of the Trade Act or pursuant to World Trade Organisation or other trade agreement dispute settlement procedures, necessary to combat unfair trade practices and to ensure that trading partners follow through with their international commitments.

What needs to be done- demands by USTR?

To maintain the integrity and predictability of IP systems, governments should use compulsory licenses only in extremely limited circumstances and after making every effort to obtain authorisation from the patent owner on reasonable commercial terms and conditions.

Such licenses should not be used as a tool to implement industrial policy, including providing advantages to domestic companies, or as undue leverage in pricing negotiations between governments and right holders.

It is also critical that foreign governments ensure transparency and due process in any actions related to compulsory licenses.

India has yet to take steps to address long-standing patent issues that affect innovative industries.