India should stand up to US bullying on intellectual property.
The United States (US) Chamber of Commerce, the Pharmaceutical
Research and Manufacturers of America (PhRMA) and the US’ National
Association of Manufacturers have all made strong pleas to the US Trade
Representative (USTR) to designate India as “Priority Foreign Country”
(PFC) in its
2014 Special 301 Report which is due for release on 30
April. They have complained that India has denied “adequate and
effective protection of intellectual property rights” (IPRs) and accused
it of back-pedalling “fair and equitable access to US persons who rely
on intellectual property”. They claim that the grounds on which India
has issued compulsory licences and the standards for patentable subject
matter found in Section 3(d) of the Indian Patent Act (IPA) have
violated its obligations under the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) of the World Trade Organisation
(WTO). Unilateral action under Special 301 was one of the big sticks
that the US began wielding in the course of the Uruguay Round (1986-93)
of the General Agreement on Tariffs and Trade. It was an effective
imperialist weapon then, but what of it now, almost two decades since
the formation of the WTO in 1995?
Under the “administrative adjudications” of Special 301 the USTR
merely establishes that the countries it blacklists (the term itself has
racial connotations) are in violation of the US government’s
interpretations of the TRIPS agreement. These designations range from
being PFC to being “watch listed” and “priority watch listed”. India has
been on the Special 301 priority watch list all along, ever since the
first Special 301 Report in 1989, except when it was upgraded to PFC for
three years. The PFC blacklisting entails loss of benefits under the
US’ Generalised Scheme of Preferences. During the Uruguay Round
negotiations, India was deemed to be among the leading countries
opposing the TRIPS agreement in the making, alongside Brazil, Argentina
and Egypt, but New Delhi soon fell in line, perhaps even before 1992
when the mere threat of being designated as PFC seems to have worked.
Come the WTO in 1995, many developing countries, including India,
hoped that the Special 301 would be ended, but that was not to be. The
US Trade Act was amended to make it appear WTO compatible. But was this
really the case? Certainly, the US
refrained from categorising other WTO members as PFC, but it did put
Paraguay in that category in 1998, even as it went on producing long
rolls of countries on its watch list and priority watch list. IPRs
worldwide have been subject to constant US surveillance. There is
however at least one panel ruling from 1999 suggesting that the 301
statute is in “presumptive violation” of the WTO’s dispute settlement
mechanism. This can surely be presumed to apply to the case of Special
301 too. So far, no WTO member has had the gumption to challenge the US
in the WTO against the illegality of its Special 301 programme.
Interestingly though, on the obverse side, the US has not taken the
issues of compulsory licence or the standards of patentable subject
matter under Section 3(d) of the IPA to the WTO, even though it has
constantly kept India on either the priority watch list or as a PFC.
India’s first-ever compulsory licence, that on Bayer’s patent on
sorafenib (brand-named Nexavar) for the treatment of kidney and liver
cancer, was essentially to combat the ridiculous monopoly price of the
imported drug, even as Bayer was given a relatively high royalty rate of
6%. Can the US dare challenge this policy action by the Indian
government in the WTO under Section 31 of the TRIPS agreement and the
Doha Declaration on the TRIPS agreement and Public Health? Indeed, the
US itself issues compulsory licences to combat monopolistic practices.
Moreover, can the US effectively challenge Section 3(d) of the IPA as
constituting a “fourth substantive (patentability) criteria”, as PhRMA
repeatedly asserts, under Article 27 of the TRIPS agreement? Charging
exorbitant prices all over the world Novartis has already appropriated
as private profit the gains from much of the tax-supported research
investments made by US’ National Cancer Institute into the invention of
cancer drugs, including Glivec. India’s Supreme Court did well in
denying it a patent under Section 3(d) of the IPA for a mere derivative
of the known substance for treating cancer that did not even enhance the
efficacy and safety of the original version.
We urge the Indian government to stand up to the bullying of the US
and not wilt under pressure in the event of India being designated as a
PFC on 30 April 2014. Indeed, the Indian government has a good case for
challenging at the WTO Washington’s Special 301 programme. It also has
the implicit backing of much of the world, not just the “third” of it. A
clear stand against US bullying may even pave the way for a reform of
the global intellectual property regime.