The US Chamber of Commerce's Global Intellectual Property Center released the third annual edition of its International IP Index 2015 two days ago. The report ranked India second last among 30 nations , only above Thailand. Meir Pugatch is part of the team that brought out the Index. Pugatch is Professor of intellectual property, innovation and entrepreneurship at the University of Maastricht, the Chair of the Health Systems Management division at the University of Haifa, and the Managing Director of Pugatch Consilium. In an interview with Jyotindra Dubey of BT, he shared his thoughts on India's low ranking in the Index.
Q. How has India performed in your latest study as compared to last year? What's your outlook for India in coming years?
A. India's score has increased from the second edition of the GIPC Index from 6.95 to 7.23. India is a country full of potential. New positive policy announcements have been made, which if carried out and supplemented with other IP reforms would significantly improve India's score.
Q. India has moved one rank up in 2015 only above Thailand. Is it because of addition of new countries in your study or has India really taken steps to improve its IP environment?
A. India moved up slightly in score mainly due to its improving its environment in Trade Secrets and Market Access. In a positive step, working in dialogue with a variety of stakeholders, including the international business community, the Indian government earlier in 2014 announced a revision to its Preferential Market Access (PMA) policy. Originally, the PMA policy had included procurement by private-sector entities as well as the public sector. However, with the new policy in place, the private sector has been exempt from this policy. At the same time, other economies' scores, for example Thailand, decreased.
Q. In which parameters did India perform poorly and what are the major reasons behind this?
A. India faces challenges across the board and in all categories of the Index. With regards to Category 1: Patents, Related Rights, and Limitations, specific issues include the additional requirement to patentability that goes beyond the international novelty, inventive step, and industrial applicability requirements. Under Section 3(d) of the Indian Patent Act, there is an additional "fourth hurdle" with regard to inventive step and enhanced efficacy that limits patentability for certain types of pharmaceutical inventions and chemical compounds. This approach to patentability requirements is inconsistent with the TRIPS Agreement, which specifies three basic patentability requirements. India also does not have in place a number of IP rights such as regulatory data protection and patent term restoration, two fundamental components for the life sciences. There is also a history of using compulsory licensing for commercial and non-emergency situations.
On copyright and trademarks, India has high levels of piracy, not least in the online space and there is a limited framework for addressing online piracy and circumvention devices. There is also quite poor application and enforcement of civil remedies and criminal penalties. Finally, India is not a contracting party to any of the major international IP treaties referenced in the GIPC Index.
Q. What has been the biggest deterrent for India's IP environment? And what should be the immediate step for India to improve its IP environment?
The biggest challenge has been the absence of a vision for a need to reform, and recognition that protecting IP and providing IP rights is of real value and gain. IP rights significantly contribute to social and economic development including foreign direct investment, innovation outputs, high tech job creation and increased rates of R&D.
How do you see the recent Indo-US discussions on IP Laws?
A. With the recent election of Prime Minister (Narendra) Modi, announcements by the new administration that India will reform its national IP environment, and the launch of a new national IP rights strategy, there are reasons to be optimistic that the new government will take steps to strengthen India's IP environment. The sentiments expressed in the new draft National IP Rights Strategy document that the "objective of the IPR strategy is to transform India into an innovative economy as would reflect in high rankings in appropriate development and innovation indices" is a laudable and achievable goal. New bilateral dialogue mechanisms between the United States and India - including the high-level IP Working Group of the Trade Policy Forum - have potential to elicit positive changes to India's IP system.
Q. What's your take on the first draft of new IPR policy of India?
A. Documents released by the Indian government (including the draft IP strategy in July and subsequent 'National IPR Policy' submitted by the IPR Think Tank in December 2014) contain a number of positive elements relating to need to improve the administration of India's current framework and administration, the need for increased enforcement against piracy and legal reform (for example on trade secrets). Combined with more concrete measures for IP rights in other sectors (eg the life sciences) this would be positive movement.
Q. What sectors are worst impacted in India due to its poor IP environment?
A. India has the potential across the board in a number of key industries from life sciences to content to ICT. For example, despite the richness and ubiquity of Indian culture and creative products - highlighted by the Bollywood film industry - the economic contribution of the creative economy and creative sectors in India is limited.
For instance, estimates suggest that film piracy may have reduced the value of the Indian film industry by up to 50 per cent. And looking at life sciences, despite the tremendous growth in the capacity and willingness to conduct clinical trials in India, it would seem that India's potential is still significantly untapped, given the fact that the volume of clinical trials conducted in India is still quite limited relative to the size of its population. Here, too, the absence of biopharmaceutical IP rights and protection has hurt India.