US tar­gets In­dia’s green tech poli­cies

US continues to tar­get In­dia over its in­tel­lec­tual property regime, es­pe­cially in pharma, green tech sec­tors


There are clear signs that the US will keep up its pres­sure on In­dia to tighten its in­tel­lec­tual property (IP) rights laws even if the just-re­leased re­port of the US Trade Rep­re­sen­ta­tive did not al­ter the coun­try’s rat­ing as an IP of­fender. The an­nual re­view, con­ducted uni­lat­er­ally by the US to de­ter­mine which of its trad­ing part­ners have not come up to scratch in meet­ing Amer­ica’s de­sired level of IP pro­tec­tion and en­force­ment, con­tains sharp warn­ings on what the prob­lem ar­eas are.

Pri­mar­ily, In­dia’s law on the patent­ing of phar­ma­ceu­ti­cals continues to be the ma­jor fric­tion be­tween the two coun­tries, but the other area of ir­ri­ta­tion for Wash­ing­ton is New Delhi’s ap­proach to green tech­nolo­gies. The USTR re­port ze­roes in on the na­tional man­u­fac­tur­ing pol­icy, not­ing that it pro­motes the use of com­pul­sory li­cens­ing as a way of bring­ing about tech­nol­ogy trans­fer with re­spect to green tech­nolo­gies. Un­der global trade rules, a com­pul­sory li­cence is a tool that al­lows coun­tries to le­git­i­mately over­ride patents on prod­ucts in the pub­lic in­ter­est, but de­vel­oped coun­tries have al­ways at­tacked this op­tion.

The US con­cern is that In­dia has pressed to make this ap­proach on green tech­nolo­gies mul­ti­lat­eral through its pro­pos­als at the United Na­tions Frame­work Con­ven­tion on Cli­mate Change. “These ac­tions will dis­cour­age rather than pro­mote the in­vest­ment in, and dis­sem­i­na­tion of, green tech­nolo­gies, in­clud­ing those tech­nolo­gies that con­trib­ute to cli­mate change adap­ta­tion and mit­i­ga­tion,” com­plains the USTR’s 2014 re­view. It also seeks to put a huge bur­den of guilt on In­dia and other like-minded coun­tries by warn­ing that such poli­cies and prac­tices ad­vanced do­mes­ti­cally and in mul­ti­lat­eral fora “may have the un­in­tended ef­fect of un­der­min­ing na­tional and global ef­forts to ad­dress se­ri­ous en­vi­ron­men­tal chal­lenges”.

The re­port puts heavy em­pha­sis on the need for strong IP rights to re­spond to en­vi­ron­men­tal chal­lenges, in­clud­ing cli­mate change. With­out such in­cen­tives, businesses are re­luc­tant to in­vest or en­ter into tech­nol­ogy trans­fer ar­range­ments in coun­tries that lack ef­fec­tive in­tel­lec­tual property rights ( IPR) pro­tec­tion and en­force­ment, it warns. “In the ab­sence of such tech­nolo­gies, so­ci­ety may be de­prived of crit­i­cal ad­vances to meet en­vi­ron­men­tal chal­lenges, in­clud­ing the mit­i­ga­tion of, and adap­ta­tion to, cli­mate change.”

The Su­per 301 re­port, as the re­view is ti­tled, was re­leased on April 30 and it kept In­dia on the “pri­or­ity watch list”, one step be­low “pri­or­ity for­eign coun­try” or PFC, which is the tag re­served for the worst IP rights of­fend­ers. Amer­i­can busi­ness and in­dus­try lob­bies, pri­mar­ily phar­ma­ceu­ti­cal man­u­fac­tur­ers, had

made a con­certed pitch to down­grade In­dia to sta­tus but that is some­thing the USTR has baulked at, pos­si­bly be­cause it could have pro­voked In­dia to chal­lenge the re­sult­ing penal­ties at the World Trade Or­ga­ni­za­tion ( WTO).

USTR re­viewed 82 trad­ing part­ners and placed In­dia and nine oth­ers, in­clud­ing China, Rus­sia, Ar­gentina and Pak­istan on the Pri­or­ity Watch List. An­other 27 are on the Watch List. How­ever, In­dia has been sin­gled out for what is termed an out- of- cy­cle re­view ( OCR) that will be ini­ti­ated later this year. As the re­port ex­plains, OCR is a tool USTR uses to “en­cour­age progress on IPR is­sues of con­cern”. It en­tails “height­ened en­gage­ment and co­op­er­a­tion with trad­ing part­ners” to ad­dress such is­sues.

In­dia’s re­ac­tion was prompt. Within a day of the re­port’s re­lease on April 30, Com­merce Sec­re­tary Ra­jeev Kher was cat­e­gor­i­cal that In­dia would not co­op­er­ate on such a uni­lat­eral ex­er­cise. Main­tain­ing New Delhi’s stead­fast line that its IP rights regime is in line with in­ter­na­tional com­mit­ments, Kher pointed out the OCR was “a uni­lat­eral process un­der their [US] law” and there was no ques­tion of In­dia sub­ject­ing it­self to such a re­view. “Let that be very clear... In­dia has clearly con­veyed to the US that the govern­ment of In­dia will not sub­ject it­self to in­ves­ti­ga­tions,” he said at a press brief­ing.

Trade an­a­lysts point out that al­though mech­a­nisms are in place to sort out trade dif­fer­ences, these are not be­ing used. The two coun­tries have set up a trade pol­icy fo­rum ex­pressly for this pur­pose but no meet­ing had been con­vened since 2010 be­cause Wash­ing­ton had not agreed to dis­cuss is­sues of con­cern. In­dia had twice sug­gested con­ven­ing a meet­ing of the fo­rum, once in 2011 and then in 2013, just be­fore Prime Min­is­ter Man­mo­han Singh was to visit the US. On both oc­ca­sions USTR did not agree, os­ten­si­bly be­cause it was busy in wide- rang­ing pluri­lat­eral trade ne­go­ti­a­tions.

All the same, of­fi­cial sources be­lieve there could be a clear­ing of the air when Kher meets act­ing deputy USTR Wendy Cutler to­wards the end of June. In­dia has so far re­sisted most of the US in­dus­try lobby pres­sures, es­pe­cially that of PhRMA, the club of drug ma­jors, which went into over­drive against In­dia’s IP regime. The US ac­counts for 12 per cent of In­dia’s ex­ports and is a ma­jor trad­ing part­ner, but New Delhi has stood firm against the mis­lead­ing and de­cep­tive pro­pa­ganda war aimed at over­turn­ing cru­cial safe­guards in the patents law ( see ‘ US piles on the pres­sure’, Down To Earth, July 16-31, 2013, and ‘ Stand­ing up to the US’, Down To Earth, May 1-15 2014).

Two de­vel­op­ments— a com­pul­sory li­cence on a high- priced Bayer cancer medicine that was not be­ing pro­duced in the coun­try and the de­nial of a patent to No­var­tis for a new form of an old cancer drug un­der Sec­tion 3d of the Patents Act— were the trig­gers for the all- out war on In­dia’s patent regime. Iron­i­cally, nei­ther of these de­vel­op­ments in­volved US com­pa­nies— nor could these be chal­lenged at WTO.

There has been sharp crit­i­cism of the US po­si­tion from pub­lic health or­gan­i­sa­tions. Peter Maybarduk, di­rec­tor of Pub­lic Cit­i­zen Global Ac­cess to Medicines Pro­gram, called the spe­cial OCR “a shame­ful form of ha­rass­ment”. In a state­ment on the 2014 Su­per 301 Re­port, which he de­scribed as “a morally re­pug­nant and un­nec­es­sary US govern­ment prac­tice”, Maybarduk said the USTR’s as­sess­ment “in­cludes lengthy crit­i­cism of In­dia that bends much too far to Big Busi­ness de­mands”.

Pub­lic Cit­i­zen is a Wash­ing­ton non-

The Obama ad­min­is­tra­tion should sup­port, rather than at­tack, In­dia’s key role in help­ing fa­cil­i­tate global ac­cess to life­sav­ing medicines



profit that calls it­self the people’s voice on crit­i­cal is­sues such as health­care re­form, cli­mate change, etc, as a “coun­ter­vail­ing force to cor­po­rate power”. It be­lieves USTR an­nu­ally bul­lies coun­tries for im­ple­ment­ing poli­cies that pro­mote ac­cess to life­sav­ing medicines “de­spite se­ri­ous ques­tions about the le­gal­ity of such uni­lat­eral threats un­der in­ter­na­tional law”. As such, the 301 watch list should be dis­con­tin­ued. In­stead, “the Obama ad­min­is­tra­tion should sup­port, rather than at­tack, In­dia’s key role in help­ing fa­cil­i­tate global ac­cess to life­sav­ing medicines,” Maybarduk said, since In­dia’s patent sys­tem plays by the global rules and pro­motes pub­lic health.

USTR, though, is singing a com­pletely dif­fer­ent tune, and on a rather stri­dent note. Against a back­drop of de­te­ri­o­rat­ing IPR pro­tec­tion, en­force­ment, and mar­ket ac­cess for per­sons re­ly­ing on IPR in a num­ber of trad­ing part­ners, it re­ported the fol­low­ing: “in­ad­e­qua­cies in trade se­cret pro­tec­tion in China, In­dia, and else­where, as well as an in­creas­ing in­ci­dence of trade se­cret mis­ap­pro­pri­a­tion; and trou­bling “indige­nous in­no­va­tion” poli­cies that may un­fairly dis­ad­van­tage US rights hold­ers in China; con­tin­u­ing chal­lenges of copy­right piracy over the In­ter­net in coun­tries such as Brazil, China, In­dia, and Rus­sia; and mar­ket ac­cess bar­ri­ers, in­clud­ing non­trans­par­ent, dis­crim­i­na­tory or trade- re­stric­tive mea­sures, that ap­pear to im­pede ac­cess to health­care. There are telling ironies and dou­ble stan­dards in the US ap­proach to in­no­va­tion. On the one hand, the Su­per 301 re­port de­clares that “fos­ter­ing in­no­va­tion and cre­ativ­ity is es­sen­tial to US pros­per­ity, com­pet­i­tive­ness, and the sup­port of an es­ti­mated 40 mil­lion jobs that di­rectly or in­di­rectly rely on IPin­ten­sive in­dus­tries”. Yet, on the other hand, it ad­mon­ishes In­dia and China, among oth­ers, to be care­ful while push­ing for in­no­va­tion them­selves. These coun­tries should, while for­mu­lat­ing poli­cies to pro­mote in­no­va­tion, take ac­count of “the in­creas­ingly cross- bor­der na­ture of commercial re­search and de­vel­op­ment, and of the im­por­tance of vol­un­tary and mu­tu­ally agreed commercial part­ner­ships”.

The Kher-Cutler meet­ing could per­haps bring some san­ity to the dis­course.

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