In its 2015 Special 301 Report on Intellectual Property Rights, the office of the United States Trade Representative (USTR) has retained India in its “Priority Watch List”, noting however that bilateral engagement between the two countries on IPR concerns had increased over the past year. The USTR had done an Out-of-Cycle review of India in 2014, mentioning the improvement in trade ties, and this year ruled out another immediate review. The U.S. wants India to bring its IPR regime closer to norms that the former seeks and has been uncomfortable in particular with the clauses in the Patents Act of 2005. The Act provides for a high standard of patentability, allows for compulsory licensing provisions and pre- and post-grant objection to patents. The progressive Act has been invoked in several judgments recently in relation to pharmaceutical patents — for example, the Supreme Court upheld the sale of a generic version of the cancer drug Nexavar in December 2014, and upheld the Indian patent office’s rejection of >Novartis’s application for a patent for its anti-cancer drug , Glivec. It must be mentioned that patent laws in India are compliant with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The restrictive patenting laws have protected a thriving generic pharmaceutical industry producing low-cost drugs in India. The industry has gradually become export-driven, resulting in these companies becoming keen to tie up with major pharmaceutical companies abroad by seeking voluntary licensing arrangements. Other countries have also looked at India’s Patents Act as a model, with affordability of pharma products and drugs being a key concern.
It is in this context that Prime Minister Narendra Modi’s statement in New Delhi on April 24, asking for aligning India’s patent law with “global standards”, is a cause for concern. The refrain of the Central government over the past year on this issue is that a strong IP regime is necessary for economic growth and investment. This is clearly a misplaced concern, as such an emphasis is being pushed by big pharmaceutical companies that are uncomfortable with the “health safeguards” in the Patents Act and that have lobbied with the USTR to keep India under “priority watch”. Last year the government had agreed to the creation of a high-level bilateral intellectual property working group with the U.S. While these arrangements with the U.S. may be useful to mitigate any prospective attempts by the USTR to impose trade sanctions, the government must retain its own position on IP and the patents regime in India, and should not allow any dilution of its patent laws that safeguard the public interest.
