US, EU irked by India’s compulsory licence plan for green technologies

Amiti Sen New Delhi | Updated on October 03, 2013

American and European companies fear their patents are at risk

The US and the EU have raised strong objections to India’s decision to allow compulsory licensing in the green technology sector.

Compulsory licensing allows domestic producers to manufacture copied versions of patented environment-friendly products.

India’s National Manufacturing Policy, issued in late 2011, explicitly talks about the Government issuing compulsory licences (CL) for green technology in cases where patent holders charge unreasonable rates, or where domestic demand is not being met in a satisfactory manner.

“US and European clean-tech companies fear that Indian companies, encouraged by the provisions in the National Manufacturing Policy, will start approaching the Government for CLs to manufacture patented products, and that their patents would be at risk,” a DIPP official told Business Line.

The global market for green technology, which covers wind and solar power, water efficiency, electric vehicles, heating, ventilation and air conditioning, is estimated to be worth over $2 trillion a year and growing at an annual rate of 12 per cent.

Patent holders are not deprived of their royalties if a Government issues a CL for their products. However, the rates are determined by the issuing authority and patent holders lose control over the particular market.

Although India’s Patents Act allows compulsory licences to be issued for any patented product where the Government believes (and can prove in courts, if challenged) that the interest of the country’s consumers is not being served, so far these have been issued only for life-saving medicines.

The National Manufacturing Policy, which talks about extending CLs to green technologies, focuses on promoting use of clean technology in the country and also allows tax sops for the purpose.

The US Government, in recent meetings with Indian officials during Prime Minister Manmohan Singh’s visit, identified India’s IP regime and laws relating to CLs as areas of top concern.

“US officials were unhappy that the National Manufacturing Policy talks about issuing CLs in the green tech sector and argued that there was not much justification in violating patents in the sector,” the official said.

European countries, particularly the UK, are also consistently putting pressure on India, discouraging any attempt to issue CLs for clean technologies. UK trade officials recently met officials from the Department of Industrial Policy and Promotion (DIPP) on the sidelines of an event in Geneva to discuss their concerns.

India, however, has maintained that it has not violated any international laws and that CLs will be issued only if the strict criteria mentioned in the Indian Patent Act and the global Trade Related Aspects of Intellectual Property Rights (TRIPS) are met.

“It is not so easy to issue a CL. We have just done it for a couple of life-saving medicines so far.

The issue is being blown out of proportion,” the official said.


Published on October 02, 2013

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