India - Protecting Intellectual Property India - IPR
India remains one of the world’s most challenging major economies with respect to protection and enforcement of IP. Despite positive statements and initiatives upon which the Modi Administration has embarked, the pace of reform has not matched high-level calls to foster innovation and promote creativity. India has yet to take steps to address longstanding IP issues that are affecting innovative industries. India remains on the Priority Watch List in USTR’s Special 301 report for 2019.
Engagement and Developments
Engagement with India on Intellectual Property Rights (IPR) continues, primarily through the Trade Policy Forum’s Working Group on Intellectual Property. In 2016, India released its comprehensive National IP Policy, with its primary focus being on awareness and building administrative capacity. The portfolio of Copyright and Semi-Conductors shifted to the Department of Industrial Policy and Promotion, Ministry of Commerce, which was subsequently renamed as the Department of Promotion of Industry and Internal Trade (DPIIT). Under DPIIT, a Cell of IP Promotion and Management (CIPAM) was set up and is tasked with implementing the IP Policy and interagency coordination. However, their focus appears to be awareness building amongst citizens. In 2017, CIPAM conducted the first ever all India enforcement workshop for police officers and launched a toolkit for police to enforce IP rights. Post this initiative, the Ministry of Home Affairs announced that IP would become a mandatory subject for all police training academies.
In 2016, the state of Telangana set up India’s first IP Crime Unit, to combat the menace of internet piracy. In 2017, Maharashtra followed suit by setting up the Digital Crime Unit (MCDCU) and has taken down many sites that carry infringing content. The MCDCU is the first public private partnership unit for the law enforcement agency in all of India. As of 2019, they have blocked over 250 sites that carry predominately infringing content. In 2018, Mizoram became the third state to announce the setting up of a Digital Crime Unit to combat digital fraud and copyright theft.
In 2016, the Indian Patent Office (IPO) hired 458 examiners to address the issue of patent and trademark backlog. In 2017, the Patent Rules and the Trademark Rules were revised, to include strict timelines to dispose of cases and streamline examination. Special discounts for filing and an expedited examination for start-ups was introduced. With the hiring of these examiners and these initiatives, the wait-times at the Indian Patent Office were reduced. In 2019, the IPO released draft Copyright Rules and a second Patent Rules Amendment - these are under consideration and yet to be finalized.
Legislative Climate in India
India has adequate copyright laws, and in July 2018, India acceded to the WIPO Internet Treaties, namely the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT). In 2019, India ratified the Lisbon, Nice and Lacarno Agreements on classification of various types of IP. In 2019, the cabinet approved anti-camcording language to be inserted in the Cinematographic Bill. This anti camcording provision now needs to be passed by parliament before it takes effect.
Pharmaceutical and agro-chemical products can be patented in India. Plant varieties are protected by the Plant Varieties and Farmers’ Rights Act. However, the interpretation and application of the patent law lacks clarity, especially regarding several important areas such as compulsory licenses, pre-grant opposition provisions, and the scope of patentable inventions (e.g., whether patents are limited to new chemical entities rather than incremental innovation). Indian law does not protect against the unfair commercial use of test data or other data submitted to the government during the application for market approval of pharmaceutical or agro-chemical products. In 2017, The Pesticides Management Bill (2008), which would allow data protection of agricultural chemical provisions, was revised and all provisions relating to data protection were removed, this bill is pending in Parliament.
Indian law provides no statutory protection of trade secrets. The Designs Act allows for the registration of industrial designs. The Designs Rules, which detail classification of design, conform to the international system and are intended to take care of the proliferation of design-related activities in various fields. India’s Semiconductor Integrated Circuits Layout Designs Act is based on standards developed by WIPO; however, this law remains inactive due to the lack of implementing regulations.
Customs officers have ex-officio authority to seize and destroy counterfeit goods, though rights holders must pay for storage and destruction of counterfeit materials. In the past few years, with regular training customs and police enforcement has marginally increased. The new customs recordation system allows trademark owners to record their brands and trademarks with the ministry and seek affirmative action in case of any counterfeit issue at the ports. However, in 2018, the IPR Custom Rules of 2016 were revised and as per the new rules, patents are no longer the scope of custom protection.
Regulatory Hurdles
Despite, these positive developments, since 2017 we have seen new regulatory hurdles and challenges that may affect the commercialization of intellectual property.
- Just days after the National IP Policy, the Ministry of Agriculture released the “Licensing and Formats for GM Technology Agreement Guidelines, 2016” (GM Licensing Guidelines). This measure would force companies to license their technology as well as impose unprecedented up-front terms and conditions on private party transactions covering a broad range of genetically-modified agricultural products. The GM Licensing Guidelines called for immediate termination of all private licensing agreements, following which, each company would have 30 days to enter into a new license agreement prescribed by MAFW. However, on May 24, the government changed the notification to draft guidelines following concerns expressed by high-level interagency officials and business leaders. MAFW then re-issued the guidelines in draft form, open for comments. There is has been no open stakeholder engagement on this issue now. The GOI’s refusal to strongly repudiate MAFW’s GM licensing guidelines has already resulted in the withdrawal of next-generation innovative biotechnology from the Indian marketplace and has given pause to many other companies who seek to protect their innovative products. The government is yet to formally rescind these guidelines. Furthermore, MAFW wrote to DIPP requesting them to revoke Monsanto’s patent claiming the patent was against public interest. The Monsanto case has been remanded back to court for trial.
- In April of 2017, the Ministry of Health and Family Welfare (MoHFW) by way of a notification removed the requirement for companies to inform whether a drug is under patent or not at the time of filing for a manufacturing license. This is a regressive step and against the IP Policy that calls for better center and state coordination. This coupled with liberal price controls for pharmaceuticals and medical devices, creates uncertainty for the sector.
- 2017, also saw several pharmaceutical drugs and medical devices come under price control. The use of Para 19 of the Drug Price Control Order was implemented to bring drugs not under the essential medicine list under price control. Until now, only one patent drug is under price control. In 2018 and 2019, a series of pharma price controls have been administered bringing more patented drugs under price control.
- India announced its Government Procurement Policy, which called for localization requirements. In keeping with this new Policy, MIETY introduced a Government Procurement of Cyber Products Policy, that requires all IP ownership to be transferred to the Indian Company. In 2018, DPIIT cancelled several government tenders, stating they did not meet the localization requirement as set out in the 2017 Policy mentioned above.
- India finalized its examination guidelines for Computer Related Inventions. Between 2016 and 2017, India required the hardware to be novel along with the software. That specific provision was removed and in doing so, it merely restated the law, that computer software per se were not patentable. It removed all examples of what can and cannot be patentable and replaced it by stating that it would be left to the discretion of the patent examiner to allow or disallow an application.
- India also actively engages at multilateral negotiations and the WTO TRIPS Council. India has strongly supported and sometimes led the charge in calling for open technology transfer, liberal use of compulsory licensing cross sectors, price controls and protection of traditional knowledge. These negotiations will have an impact on innovation, trade, and investment in IP-intensive products and services.
- In 2018, GOI of India formed an inter-ministerial group to investigate reinstating royalty caps for all technology collaborations and brand licensing, limiting the amount of foreign exchange that can leave the country.
- In 2019, the National Biodiversity Authority has proposed mandated royalties to be paid under the access and benefit sharing agreements by companies that use genetic resources occurring in India.
Taking its cue from the European Union’s General Data Protection Rules (GDPR), in 2018, India began to signal its intent to tightly regulate the cross-border flow of data and protect individual privacy. Meanwhile, the DPIIT released the e-commerce policy, which went beyond GOI’s own data privacy protection bill calling for localization of data and likened data as a natural resource. It would appear that this bill and localization requirements will be the focus of the new Indian government for several months.
In any foreign market, companies should consider several general principles for effective protection of their intellectual property. For background, please link to our article on Protecting Intellectual Property and Stopfakes.gov for more resources.
IP Attaché Contact for India (Acting)
Ms. Komal Kalha
American Centre, 24 Kasturba Gandhi Marg, New Delhi, 110001
+91 11 2347 2000
Komal.Kalha@trade.gov