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GIPC Panel and Report Considers India an Outlier on IP Protection

Thursday, July 25, 2013
ByNatasha Dhillon

Highlighting the release of the Global Intellectual Property Center's report, India: International Outlier on IP, and the growing concern that India is not committed to IP protection after the Indian Supreme Court's denial of Novartis's patent application for Glivek, the U.S. Chamber of Commerce hosted a July 18 presentation at its Washington D.C. headquarters about how to not only protect U.S. intellectual property interests, but any creator or investor who wants to participate in the Indian marketplace.

The event featured keynote addresses from Rep. Erik Paulsen (R-Minn.) and Rep. John Larson (D-Conn.) who discussed their recent letter to the White House, in which they outlined congressional concerns about India's IP environment and its effects on the U.S.-India trade relationship.

The event also included a panel discussion, which began with David Torstensson of Pugatch Consilium, a boutique consultancy that offers research and analysis on growing sectors in the knowledge economy. As an author of the GIPC International IP Index and report, Torstensson presented an overview of the report's methodology and findings about the “consequences of India's failure to develop and adhere to international best practices in the field of IP rights.”

Manisha A. Desai of Eli Lilly and Co., a research-based pharmaceutical company in Indianapolis, addressed the particular problems presented when applying for patent protection in India, and Michael Schlesinger of the International Intellectual Property Alliance, a coalition of seven U.S. trade associations, explained how these problems affect not only foreign companies, but also Indian companies.

'It is An Issue of Fairness.'
Paulsen said that his central concern was “a disturbing trend, where India is turning inward; in which India is directing barriers to trade and investment, and discriminatory practices.”

Representing the 3rd congressional district in the western Minneapolis suburbs, Paulsen's concern began when he saw the effect Indian IP policies were having on Minnesota-based high-tech, agriculture, and biopharmaceutical industries. Similarly, Larson's interest was due to his concern about India's forced localization requirements for IP-intensive manufacturing and the jeopardizing effects it could have on manufacturing industries and jobs in not only his district which includes Hartford, Connecticut, but the United States.

Paulsen said India's IP practices, such as its local content provisions, have given domestic companies in India an unfair advantage over American companies. Such an advantage is a problem for American innovation, he said.

Larson recognized that American creators and investors need the assurance that their intellectual property will be protected “because [the] United States and [its] international partners understand that innovators have the right to own what they create, and take steps to ensure that those rights are protected.”

The perceived need to protect American innovation was why 170 members of Congress signed onto a letter to the White House on June 18, expressing congressional concerns about India's lack of IP protection and its potential negative consequences for the U.S. economy, they said.

Paulsen said that after recent talks with India's finance minister, P. Chidambaram, and Secretary of State John Kerry's recent visit to India, he and Larson remained hopeful that a solution could be found. However, the details of such a solution were still being defined, they said.

Larson wanted Congress to get more involved with U.S. trade partners, but stated that more than Congress was needed for there to be a significant change. Paulsen agreed and suggested that India be made aware of each of its IP violations, and called for help from many of the private sector attendees to assist in building a line-by-line record.

They were optimistic, but did suggest that if a solution was not found there were reservations about the ability of the U.S.-India trade relationship to continue to flourish.

Findings and the Difference Between India and China
David Torstensson gave a slide presentation on the GIPC's report, which indicated “that the Indian economy has performed well below that of comparable countries that have stronger national IP environments.”

Measuring the availability, enforcement, and application of IP rights, Torstensson said the 25 factors used indicated that should India adopt a much stronger IP rights framework and policies, foreign direct investment would increase significantly.

Compared to other countries whose IP environments had similar starting points, India was ranked the lowest. Significantly, India was ranked lower than China and Russia, a point focused on by the panel, Paulsen, and Larson.

Torstensson said the difference between India and China's rankings was due to India's lack of IP legislation and regulations, and its failure to adhere to international IP standards. He said China has instituted legislation and regulations to a certain extent and its challenge arises more in the areas of application and enforcement, but India faces issues in all three areas.

What Needs to Change
When the panel addressed the central question of how to move forward. Torstensson indicated that India does not need to rise to the top levels of IP protection as seen in the United States and the United Kingdom, but suggested that it should reach at least the levels of other BRIC countries.

Desai said this could be achieved if India worked to fix the delays and loopholes throughout the system. Referencing her company's experience with India's patent system, she explained how none of the Eli Lilly products have been granted Indian patent protection. She noted that

in the interest of protecting its domestic industry, the government of India has significantly impeded the innovative pharmaceutical industry in its efforts to obtain or to enforce patents. This anti-IP stance, combined with additional barriers in the regulatory approval process and in pricing regulations for new medicines, severely undermine the promise of India.

She stated that no one can ever hope to have IP protection until India recognized innovation, had a system that adhered to international standards, and stopped its discriminatory practices.

Schlesinger noted that there have been recent efforts to stop illegal recordinng of movies and internet piracy, but stated that judicial reform is needed. Importantly, he said they “they need to recognize intellectual property theft for what it is: theft.”

Questioning the Disastrous Forecast
In April, Novartis lost an appeal for patent protection of its cancer drug, Glivek, after the Indian Supreme Court ruled that the new version was not a significant improvement over the older version (63 PTD, 4/2/13). A representative from the Indian embassy applauded the event, but questioned the focus on the Glivek ruling as an example of India's lack of commitment to IP protection. He said that one denied patent should be looked at in context with the 146 patents granted to Novartis.

Desai responded and said that it is not about solely granting a patent, but enforcement of the patent and its value, and that the subject matter of the 146 other patents could vary greatly to the compound in Glivek that Novartis was seeking to protect.

Mark Elliot of the Global Intellectual Property Center and moderator of the discussion, noted that the focus on Glivek's denial was not only because Novartis gave Glivek to patients in India for free, but more importantly because 40 other countries have granted Glivek patent protection.

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