US decides against downgrading India on intellectual property issues

India remains “Priority Watch” country.

By Deepak Chitnis

WASHINGTON, DC: The US has decided not to slap India with its worst possible ranking for intellectual property violations, instead putting India alongside nine other countries on its Priority Watch list.

The Priority Watch designation means that the US has “growing concerns with respect to the environment for Intellectual Property Rights (IPR) protection and enforcement” within a nation. Joining India on the list are China, Russia, Algeria, Argentina, Chile, Indonesia, Pakistan, Thailand, and Venezuela.

“In making this determination, the United States recognizes […] the critical role that meaningful, constructive, and effective engagement between India and the United States should play in resolving these concerns,” says the Special 301 Report, released on Wednesday. “Serious difficulties in attaining constructive engagement on issues of concern to U.S. and other stakeholders have contributed to India’s challenging environment for IPR protection and enforcement.”

In keeping India on the Priority Watch list, the US decided not to downgrade the country to its Priority Foreign Country designation, choosing not to risk further straining ties with New Delhi. Earlier this month, India said that if the US downgraded them, India would take the case to the World Trade Organization in protest.

The US faced intense pressure from its domestic pharmaceutical sector to levy the harsher rating upon India, which has had several of its drug companies investigated by the US Food and Drug Administration (FDA) over allegations that they have infringed on US companies’ copyrights for generic drugs. The FDA has also cracked down on several Indian factories for not complying with strict protocols.

“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, released by the Office of the US Trade Representative, says.

India is afforded more than five pages in the 63-page report. The US singles out India for its copyright and piracy problems – specifically, the large amount of video piracy that takes place in India – and criticizes the Indian government for making it difficult for pharmaceutical companies to “secure and enforce” patents.

The sale of counterfeit goods is also raised in the report, and the US also says that it is “increasingly concerned about trade secret protection in India.” The report also urges India not to discriminate against foreign contractors and companies in the interests of localization, an issue that has come up with regards to India’s burgeoning solar power program.

“The United States urges India to take specific actions to address the concerns raised, including by means of constructive bilateral engagement,” the report says. “The United States also urges India to reconsider how to meet its legitimate domestic policy objectives while fostering a climate for innovation.”