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India’s National IPR Policy: A Balancing Act – Analysis

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In the knowledge driven era, companies have no time to waste in creating an intellectual property strategy.  The 21st Century belongs to entrepreneurs – driven by Creativity and Innovation, which need to be protected and channelized for better use in future. Enhancing the protection of IPR beyond the Trade-Related Aspects of Intellectual Property Rights (TRIPS), the Indian government has announced National Intellectual Property Rights (IPR) Policy that is compliant with global norms. IPR policy will lay the future roadmap for intellectual property in India. It recognizes the abundance of creative and innovative energies that flow in India and the need to tap into and channelize these energies towards a better and bright future for all. Intellectual property (IP) is a collection of ideas and concepts, which can be protected through trademarks, copyrights and patents. If you make it easy for others to steal your ideas, you can ultimately end up washing away your own path to success. The National IPR Policy is a vision document that aims to create synergies between all forms of intellectual property, concerned statutes and agencies. It aims to set in place an institutional mechanism for implementation, monitoring and review of IPR regime. National IPR Policy is designed in a way to facilitate the ease of doing business in India. The policy ensures credibility with potential investors and strategic partners encourages them to invest in India.  India claims to have been pressurized by the US to make the IPR protection stricter in India to curb the piracy of music, movies and unlicensed software, which causes losses of $7 billion annually.

To incorporate and adopt global best practices in the Indian context, NDA government (on Friday May 13, 2016) announced the long-pending, “all-encompassing” National IPR Policy with a view to promoting creativity, innovation and entrepreneurship. The government has approved a new IPR policy that seeks to encourage innovation and improve access to healthcare, food security and environmental protection. This policy shall weave in the strengths of the Government, research and development organizations, educational institutions, corporate entities including MSMEs, start-ups and other stakeholders in the creation of an innovation-conducive environment, which stimulates creativity and innovation across sectors, as also facilitates a stable, transparent and service-oriented IPR administration in the country. The Policy aims to push IPRs as a marketable financial asset, promote innovation and entrepreneurship, while protecting public interest including ensuring the availability of essential and life-saving drugs at affordable prices. Policy which is in compliance with WTO’s (World Trade Organization) agreement on TRIPS (Trade Related aspects of IPRs), aims to sustain entrepreneurship and boost Prime Minister Sh. Narendra Modi’s pet scheme ‘Make in India.’

FEATURES:

Main highlights of the IPR Policy are:

  • The Policy aims to push IPRs as a marketable financial asset, promote innovation and entrepreneurship, while protecting public interest.
  • The plan will be reviewed every five years in consultation with stakeholders.
  • In order to have strong and effective IPR laws, steps would be taken — including review of existing IP laws — to update and improve them or to remove anomalies and inconsistencies.
  • The policy is entirely compliant with the WTO’s agreement on TRIPS.
  • Special thrust on awareness generation and effective enforcement of IPRs, besides encouragement of IP commercialization through various incentives.
  • India will engage constructively in the negotiation of international treaties and agreements in consultation with stakeholders. The government will examine accession to some multilateral treaties which are in India’s interest, and become a signatory to those treaties which India has de facto implemented to enable it to participate in their decision making process, the policy said.
  • It suggests making the Department of Industrial Policy and Promotion (DIPP) the nodal agency for all IPR issues. Copyrights related issues will also come under DIPP’s ambit from that of Ministry of Human Resource Development (MHRD).
  • Trademark offices have been modernized with the aim to reduce the time taken for examination and registration to just a month by 2017. The government has already hired around 100 new examiners for trademarks. Examination time for trademarks has been reduced from 13 months to 8 months, with the new target being to bring the time down to one month by March 2017.
  • Films, music, industrial drawings will be all covered by copyright.
  • The Policy also seeks to facilitate domestic IPR filings, for the entire value chain from IPR generation to commercialization. It aims to promote research and development through tax benefits.
  • Proposal to create an effective loan guarantee scheme to encourage start-ups.
  • It also says “India will continue to utilize the legislative space and flexibilities available in international treaties and the TRIPS Agreement.” These flexibilities include the sovereign right of countries to use provisions such as Section 3(d) and CLs for ensuring the availability of essential and life-saving drugs at affordable prices.
  • The policy left the country’s patent laws intact and specifically did not open up Section 3(d) of the Patents Act, which sets the standard for what is considered an invention in India, for reinterpretation.
  • On compulsory licensing (CL), India has issued only CL for a cancer drug.

BALANCING ACT:

The National IPR policy has been announced by the government with a tagline of ‘Creative India, Innovative India’ to incentivize entrepreneurship, creativity and innovation and curb manufacturing and sale of counterfeits. The seven objectives of the policy include IPR public awareness; stimulation of generation of IPRs, need for strong and effective laws and strengthening enforcement and adjudicatory mechanisms to combat infringements. The policy seeks to promote R&D through tax benefits available under various laws and simplification of procedures for availing of direct and indirect tax benefits. Increasing awareness about IPR will help in building an atmosphere where creativity and innovation are encouraged, leading to generation of protectable IP that can be commercialized. Bringing the Copyright Act and the Semiconductor Integrated Circuits Layout-Design Act under the Department of Industrial Policy and Promotion (DIPP) would benefit industry and individuals. Commercial importance (of IPRs) will be better affected when it is under one roof and particularly with the ministry which is so oriented for promotion of such activities.

The IPR policy aim is to create awareness about economic, social and cultural benefits of IPRs among all sections of society. Moreover, the window for trademark registration would be brought down to one month by 2017. The policy aims to create and exploit synergies between all forms of intellectual property (IP), statutes concerned and agencies. There are seven objectives that guided the policy mechanism, which include IPR public awareness, stimulation of generation of IPRs, need for strong and effective laws and strengthening enforcement and adjudicatory mechanisms to combat infringements. The policy also puts a premium on enhancing access to healthcare, food security and environmental protection. It is expected to lay the future road map for intellectual property in India, besides putting in place an institutional mechanism for implementation, monitoring and review. It balances consideration of inventability, innovation and public health consideration.”

IPR Ensures Safeguards for Indian Pharma Industry

The policy comes in the backdrop of the US Trade Representative (USTR), in its annual (2016 edition) Special 301 Report (on the Global State of IPR Protection and Enforcement) retaining India on the ‘Priority Watch List’ this year for “lack of sufficient measurable improvements to its IPR framework.” Though the U.S. concerns include the “rejections” of patent applications for innovative pharmaceutical products due to “unpredictable” application of Section 3(d) of the (Indian) Patents Act, the policy ensure that no changes are made in that Section (which prevents ever-greening of drug patents) and the patent-disabling Compulsory Licensing( CL) regime.

In fact, the IPR Policy states “India shall remain committed to the (World Trade Organization’s) Doha Declaration on (WTO’s) Trade Related IPR Agreement (TRIPS) and Public Health”. There was, however, a bit of apprehension that mention of Doha Declaration and flexibility would mean there would be attempts to find loopholes in TRIPS in order to favour pharmaceutical companies. It also says “India will continue to utilize the legislative space and flexibilities available in international treaties and the TRIPS Agreement.” These flexibilities include the sovereign right of countries to use provisions such as Section 3(d) and CLs for ensuring the availability of essential and life-saving drugs at affordable prices.

The IPR Policy says that to have strong and effective IPR laws, which balance the interests of rights owners with larger public interest, steps could be taken — including review of existing IP laws — to update and improve them or to remove anomalies and inconsistencies. The review will be done in consultation with stakeholders. The changes in the laws will be those relating to the Rules on patents, trademarks, copyrights and other IPRs, but the changes will not go beyond India’s commitments at the WTO-level.

Policy at Public Cost

“The IPR policy is driven by the agenda of IP maximalism, where IP owners’ rights will be maximized at the cost of public interest. This (policy) will influence courts and judges. The policy needs to be opposed from becoming a ‘National’ Policy,” said Dinesh Abrol, Convener of the National Working Group on Patent Laws and WTO, a civil society group.
To ensure strong and effective IPR laws, the Policy states India will engage constructively in the negotiation of international treaties and agreements in consultation with stakeholders. The government will examine accession to some multilateral treaties which are in India’s interest; and, become signatory to those treaties which India has de facto implemented to enable it to participate in their decision making process. The international treaties and agreements referred to are international IP classification agreements, including the Nice and Vienna Classifications, and not pacts like the Trans Pacific Partnership, which apparently has TRIPS-plus provisions.

Encouraging IPR Filings

The IPR Policy also seeks to facilitate domestic IPR filings, for the entire value chain from IPR generation to commercialization. Besides, it also aims to promote research and development through tax benefits. Another significant measure includes the proposal to create an effective loan guarantee scheme to encourage Start-Ups. The IPR policy favoured the government considering financial support for a limited period on sale and export of products based on IPRs generated from public-funded research. We rarely exercise this power. The statement assumes significance as developed countries, including the US, have raised concerns over India issuing the CL. As per the WTO norms, a CL can be invoked by a government allowing a company to produce a patented product without the consent of the patent owner in public interest. Under the Indian Patents Act, a CL can be issued for a drug if the medicine is deemed unaffordable, among other conditions, and the government grants permission to qualified generic drug makers to manufacture it. As per Section 3(d) of Indian Patent Act 1970 marginal alterations would not entitle a company to a new patent. The patent period beyond 20 years could be extended only if there is a fresh invention and not a marginal alteration.

National IPR Policy will allow compulsory licensing with restrictions in case of a public health emergency such as epidemics and it is compliant with the World Trade Organization’s guidelines. Every country is entitled to defend its economic interests…monopolies are loved by those who own them. Ours is a balanced approach, taking into account inventability, innovation and public health.

Operational Issues:

“The policy recognizes that India has a well-established TRIPS-compliant legislative, administrative and judicial framework to safeguard IPRs, which meets its international obligations while utilizing the flexibilities provided in the international regime to address its developmental concerns.

The government has also expanded the scope of the copyright law with the inclusion of music, cinema and industrial drawing, and made the Department of Industrial Policy and Promotion (DIPP) the Nodal Ministry in the matter. IPR cell would be created in every government department and state government to coordinate with DIPP for IPR policy implementation… Approval of national IPR policy will enable coordinated action to foster creativity and innovation and also promote entrepreneurship.

Government has set a target to bring down trademark registration to one month by 2017. For the same, one of the objectives of the IPR policy is to strengthen and expand human resources, institutions and capacities for teaching, training, research and skill building in IPRs. The total number of patent applications and trademark registration requests pending as on February 1, 2016 were 2,37,029 and 5,44,171, respectively.

Ministry of Commerce is recruiting people and giving them training and modernizing offices about steps to reduce pendency of applications. The registration time for IPRs like trademarks “will come to in line with what is happening around the globe. Apparently, our waiting list will not be longer than the waiting list abroad. Government has taken adequate steps to reduce the waiting list. If India can achieve this timeline it will set a world class standard.

“It is a very progressive policy…the fact that government has said it would revisit IP laws is a good sign in these times of changing technology.
Supporting the idea of clean and green technology from developed countries is good step,” said R Saha, advisor, IPR, at industry body Confederation of Indian Industry. India’s pharma industry while lauding the policy has expressed concerns over the likely changes to be made to the IPR regime in keeping with global trends. DG Shah, Secretary General at Indian Pharmaceutical Alliance, said, “Unless the government is ready with funding and programmes to ensure access to medicine for all, any change in the legislative frame work would hurt not only the generic industry, but the people of India.”

The policy appears to be fair and impartial. We do believe that the balancing act which India has struck is responsible for life-saving drugs available at a reasonable cost in India compared to the rest of the world. Apparently the model adopted seems to be both legal, equitable and WTO compliant.

The new IPR policy will give a big boost to R & D and new innovations within the country while steps are being taken to cut waiting period for trademark and patent registrations. Terming the National Intellectual Property Rights (IPR) policy as “a great step forward for India”, and would help in creating capacities and institutions to further enhance the robustness of India’s IPR regime. “The policy envisages building capacities, institutions and awareness. It will encourage research and development for greater innovation and also look at traditional knowledge systems. The policy aimed at making India’s IPR regime far more vibrant. Need of the hour is to have more innovation, R&D (research and development) and commercial use of trademarks and other IPRs.”

Though the policy is more vocal on the promotion of modern IP, its comparative silence on the issue of traditional knowledge and the informal creativity/innovations based on it are significant. There is no evidence to show that the modern utility model and trade secret laws are useful to promote informal innovations. No serious efforts, however, are made to find out the actual need of IP in promoting creativity/innovations in both formal and informal sectors. The lip service paid to the importance of traditional knowledge and need for sui generis law for its protection without any details were clear indications.

The policy admitted that the benefits of the new changes in the IP laws in India were being enjoyed by foreign IP holders. This made it clear that the lack of innovation in India had no significance to IP laws, whether “robust, effective and balanced” or not. The policy takes a nuanced position on IPR issues and states that policy formulation is not intended to have the force of law but merely serve as the guiding principles in the administration and enforcement of IP norms.

IPR Policy, which gave a strong message of supporting the Centre’s Make in India Campaign, failed to address the question of whether a strong IP in itself was sufficient enough to attract foreign direct investment. The message is to strengthen IP system in India so that it’s a good market for foreign IP holders to exploit their IP and get maximum benefit out of it.

The measures suggested in the policy envisaged large government funding for protecting and promoting foreign IP in India even though it stated that the primary obligation of protecting IP rights was on the IP owners. Moreover, the reference to State legislations in the context of copyright protection showed how the balance in the policy was tilted in favour of IP holders against society.

Better copyright and trademark regime, as promised by the new framework, along with stronger enforcement, would attract more foreign investment into the country. “The approach of the policy towards copyrights and trademarks appears to serve well the needs of foreign companies. Granting rights faster, and a strong enforcement, are also something that will encourage them. “But a lot depends upon the way the government implements the policy. If the balance is lost we will discourage innovating companies. One great thing in the policy is the way it has addressed digital piracy,” indicating stricter steps for addressing the issue.

Lots of steps for Start-Ups had been recommended in the policy. The copyright subject matter has been shifted, which will help achieve objective of utilitarian industries like software, telecom and many more. The copyright law that used to be handled by the Human Resource Development Ministry earlier will now come under the new IPR policy.

The Policy recognizes that India has a well-established Trade Related Intellectual Property Rights (TRIPS)-compliant legislative, administrative and judicial framework to safeguard IPRs, which meets its international obligations while utilizing the flexibilities provided in the international regime to address its developmental concerns. India must provide enhanced certainty for the rights of innovators in line with international best practice. While IPRs are becoming increasingly important in the global arena, there is a need to increase awareness on IPRs in India, be it regarding the IPRs owned by oneself or respect for others’ IPRs. The importance of IPRs as a marketable financial asset and economic tool also needs to be recognised. For this, domestic IP filings, as also commercialization of patents granted, need to increase. Innovation and sub-optimal spending on R&D too are issues to be addressed.


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Dr. Gursharan Singh Kainth

Dr. Gursharan Singh Kainth

Dr. Gursharan Singh Kainth is Founder–Director of Guru Arjan Dev Institute of Development Studies

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