Despite the high-profile criticism on India’s trade practices in some quarters, the United States government has decided not to rock the boat, and has instead stuck with its earlier classification on India in its latest "Special 301 report", issued on Wednesday in the US.

The US Trade Representative’s (USTR) report that grades its trading partners has put India on its "priority watch list", along with countries like China, Thailand, Argentina and Russia. The report added that it would conduct "out of cycle reviews" on India. These reviews are a USTR tool for an exchange on IPR (intellectual property right) concerns, that had come to a boil between the two countries.

IPR, which involves protecting data collected during research, for instance, has been a bone of contention between India and the US, specially after a couple of key IP related court judgments went against big pharmaceutical companies Novartis and Bayer.

"In the coming months, the United States will redouble its efforts to seek opportunities for meaningful, sustained, and effective engagement on IP-related matters with the new government, including at senior levels and through technical exchanges, that will both improve IP protection and enforcement in India, and support India’s efforts to achieve a "Decade of Innovation" and advance its legitimate public policy goals," the report said.

These opportunities include strengthening IP-related discussions between US and Indian government officials; facilitating regular exchanges among IP-intensive industries and both governments; initiating cooperative efforts to combat piracy; and working with the Government of India to encourage the private sector to establish an IP-related task force under the US-India CEO Forum. To further encourage progress on IPR issues of concern, USTR will publish a Federal Register notice and initiate an Out-of-Cycle Review (OCR) of India in the fall of 2014, commencing an assessment of the progress in that engagement, it added.

Patents and Piracy

Expressing concern over online piracy in India, the report cited a McKinsey study dated December 2012 that said India’s Internet user base was the third largest in the world, with 120 million users, and by 2015, India will have the world’s second largest user base, estimated at 330-370 million Internet users. "This trend makes it all the more imperative that India incorporate into its legal system more effective measures to counter online piracy, including appropriate notice-and-takedown procedures and other efficient mechanisms for rights holders to seek removal of infringing content from websites, consistent with international best practices."

Tracing the several IP-related cases India witnessed, the report says, "The United States also notes with concern the continuing challenges involved with enforcement of patent rights in India, including challenges that patent holders face in securing injunctions against firms that manufacture patented inventions without authorization from the patent holder. Additionally, when approving such manufacture without authorisation, Indian state governmental authorities reportedly do not have a mechanism to confirm whether the item to be manufactured is under patent," it said, adding that recent cases such as Merck v Glenmark and Cipla . Roche illustrated this problem and underscore the need for greater regulatory coordination between officials in state and central governments.

"Finally, the United States also urges India to provide an effective system for protecting against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products, and to ensure that such a system applies to all pharmaceutical products and not just traditional Indian medicines. It is noteworthy, however, that the Pesticides Management Bill, currently before Parliament, includes provisions for data protection of agricultural chemicals for five years, although that time period begins with the product’s first marketing approval anywhere in the world. Meanwhile, data protection for pharmaceuticals remains under consideration by the Ministry of Health and Family Welfare. Without these types of protections in place against the unfair commercial use of clinical test data, companies in India reportedly are able to copy certain pharmaceutical products and seek immediate government approval for marketing based on the original developer’s data," the report said.

>jyothi.datta@thehindu.co.in

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