India and IPR

India and IPR

In News:

India ranked 43 out of 45 countries in the US Chamber of Commerce’s (USCC) annual IP index, just above Pakistan, which was added to the index this year, and Venezuela.

In 2015, India was placed 37 out of 38 countries whereas US continues to be at the top of the index.

The index ranked countries based on points received on various aspects of patents, copyrights, trademarks, trade secrets and market access, enforcement, and ratification of international treaties.

National IP Policy:

The national IP policy cleared by the Union cabinet in May 2016 was considered a positive for the index.

However, as per USCC, the policy failed to address the fundamental weaknesses in India’s IP framework. The IP-intensive industries faced challenges on the patentability of computer-related inventions and Section 3(d) of India’s Patent Act 1970 which relates to restrictions on patenting incremental changes.

One of the factors that went against India was Delhi HC’s ruling which permitted photocopying of copyrighted material for educational purposes.

Problem with Index

However, many IP experts have dismissed India’s poor ranking. They explain that USCC’s IP index is a work of fiction as it is benchmarked against the Trans-Pacific Partnership agreement.

India is even below Brunei, a nation known more for its rich royalty (not of IP) than innovation/ technology, only because it signed up to the Trans-Pacific Partnership.

India has been complying well in four areas of the index

  1. Protection of IP- India is TRIPS compliant
  2. Protection of well-known trademarks
  3. Design protection is in accordance with TRIPS
  4. Brilliant border protection measures.

But, India has not been objectively assessed in these parameters.

Yet, India should continuously adhere to WTO agreements in order to save itself from unnecessary litigations.

What to do?

India’s National Intellectual Property Rights policy is a boost but filling the large gaps in India’s IPR regime must be balanced with Indian trade and public interest considerations. This is with reference to constant US pressure to impose standards that go beyond those mandated by the World Trade Organization (WTO).

The weaknesses of Indian IPR lies at

  1. Low private-sector research and development spending
  2. Pending patent applications(around 2,50,000) and trademark applications ( around 5,00,000)- due to lack of patent examiners and prolonged examination periods

These bottleneck create real economic costs.

A study on link between IPR and economic growth found a strong consensus on a positive relationship. The degree of benefits accrued may vary but the relationship holds true for both developed and developing economies.

This is the reason why government’s flagship initiatives—Make In India and Start-Up India—require a strong IPR framework.

Where IP law adherence is not a solution

The last decade was almost engulfed in negotiation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1994 to the Doha Declaration clarifying its scope in 2001—for developing nations to balance their rights with obligations, particularly in ensuring access to medicines to all.

It is a positive stand that Patent Act 1970 is compliant with TRIPS and not with more stringent US standards.

Here, Indian government and courts have been judicious in stopping ‘evergreening’ of patents by global pharma multinationals who prevent new formulations of existing medicines from being patented unless they improve therapeutic efficiency. This helps them maintain market dominance and high prices.

In 2012 Indian company Natco Pharma was allowed to make a generic version of German company Bayer’s cancer drug Nexavar.

In 2013, the Supreme Court denied Novartis a patent for its cancer drug Glivec, citing evergreening.

Breaking the old regime

The present IP law is based on a 15th century old Venetian model which provides for that patents might be granted for “any new and ingenious device, not previously made”, provided it was useful.

Barring some tweaks here and there, these principles still remain the basic principles of patent law.

Hence it is a bit paradoxical that when IP rights are meant to further innovation, the legal regimes themselves have been safeguarded from innovative experimentation.

India has to do the experimentation and ‘break’ the IP standards. India’s technological proficiency in pharmaceuticals came through the active breaking of multinational IP, yielding a world-class generic industry and affordable medications for public- local as well as global.

Now the time is ripe to break the ancient IP paradigm of old laws as it rests on the assumption that IP and the technological information that it protects can be treated as real property.

Centuries ago, there was a jurist which theorised that water could never be appropriated in the same way as land, since it “flowed”. From that the notion of high seas developed which was available by all and no exclusive nation could claim it.

Similarly, now is the time that IP regime is equated with water and provide access to all rather than equating it to land and making it a property.

Patent acceptance is not the same

India has high rate of patent invalidation but the number are even higher (50%) in US and Germany. This has a reason behind it- the patent offices often get it wrong because of less resources, limited information etc.

More than it, the art of adjudicating the merits of a patent rests on the subjective test of whether or not an alleged invention is cognitively superior to what existed before (“prior art”), leading to highly differential results across the world on the very same patent application.

The new challenge- Artificial Intelligence

With incoming of age of artificial intelligence where machines can think as well as humans and are inventing by the dozen (since its now possible to code them with creativity, the skilled person could soon be this artificially intelligent machine.

The more problematic will be the fact that the test of cognitive advancement that is central to patent law rests on the notion that person is skilled in that particular art/technology.

Under AI’s infinitely vast range, almost nothing would count as inventive or non-obvious, given that every potential combination of prior art (which is what most patents are about) is known or at least knowable to these machines.

To Conclude:

The patents now present uncertainty of an order that is far more significant than most other legal instruments and are also inefficient even on their own internal economic logic. It is a little wonder that some of the finest minds in the technology space such as Elon Musk are now giving up on patents.

Hence, there is no point to be racing in the obsolete patent game.  India should now leapfrog and think through alternative innovation incentives such as prizes and open source formats. It can be done in the same way as done in smartphones where huge cost was avoided that might have come with investing significantly in landlines, laptops and the like

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