Assessing Modi’s impact on IP landscape

Prime Minister Narendra Modi and his political party Bharatiya Janata Party (BJP), once again won the elections with a clear majority and formed the government in May 2019. This is the party’s second term in a row. Interestingly, during the election campaign, one of the adverts released entitled “Transforming India’s IP Landscape” counted, among others, the following achievements: 1) Quantum jump in electronic filing of IP applications from 30% in 2013-14 to 91% in 2018-19. 2) Amendments to the Trade Marks Rules 1999 reduced the number of forms from 74 to eight and also provided for filing of a single application form for all types of trademark applications. 3) 50% reduction in official fees for patent and trademark filings for startups. 4) Hearings conducted through video conferencing. 5) In 2018-19, examination of patent applications up by 47%. 6) Pendency of trademark applications brought down from 13 months to one month. 7) India’s national IPR policy rolled out in May 2016 and a special cell set up for its implementation. The Cell for IPR Promotion and Management (CIPAM) under the aegis of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce has been tasked with implementing the IP policy. CIPAM has made considerable progress in implementing each of the seven objectives set out in the policy with the aim of promoting and strengthening IP in India. They can be grouped under the following broad headings: 1) administration and management; 2) legal and legislative framework; 3) IP creation; 4) IP awareness; 5) human capital; 6) commercialisation; 7) enforcement and adjudication. It is the first time that the DPIIT (earlier known as the Department for Industrial Policy and Promotion) has been tasked with taking the IP agenda forward in a cohesive manner, addressing domestic and international concerns.

IP has been at the forefront of India’s trade relations with the USA, Japan and European countries. Most of India’s IP laws are TRIPS compliant. Further India has acceded to many international treaties to make the laws uniform and easier for foreign companies to protect and enforce their rights. Some of the recent treaties signed by India are:

  • Locarno Agreement establishing an international classification for industrial designs
  • Nice Agreement concerning the international classification of goods and services for the purposes of the registration of marks
  • Vienna Agreement establishing an international classification of the figurative elements of marks
  • WIPO Copyright Treaty
  • WIPO Performances and Phonograms Treaty
  • Marrakesh Treaty to facilitate access to published works for persons who are blind, visually impaired or otherwise print disabled

India has often been criticised for its implementation of IP law and this is going to pose a formidable challenge to Modi’s government in its second term as it seeks to attract foreign investment and increase its exports. The situation has become complex with the US recently taking a hawkish stand in a trade war against India by withdrawing preferential status to goods exported by India to the US. The US has withdrawn custom duty reduction on Indian goods imported into the US on the ground that India imposes high tariffs on US goods and that it has blocked market access to US companies. The price regulation of pharmaceutical and medical devices by India has also been controversial with the US signaling out this aspect in its Super 301 review. The report noted that 

“Section 3(d) of the India Patents Act restricts patent eligible subject matter in a way that poses a major obstacle to innovators seeking timely entry into the Indian market and India still lacks an effective system for notifying interested parties of marketing approvals for followon pharmaceuticals in a manner that would allow for the early resolution of potential patent disputes”.

In 2017, the Ministry of Health and Family Welfare created further uncertainty in the pharmaceutical market when it issued a notification that eliminated a requirement from Form 44, which asked applicants, seeking approval of a drug, to declare the patent status of that drug to the regulator. Innovative industries also face pressure to localise the development and manufacture of their products, including under provisions of the Drug Price Control Order and also due to high customs duties directed towards IP-intensive products, such as medical devices, pharmaceuticals, ICT products, solar energy equipment, and capital goods. The Ministry of Agriculture and Farmers Welfare’s Licensing and Formats for Genetically- Modified Technology Agreement Guidelines 2016 (2016 Guidelines) contained overly prescriptive terms that, if implemented, would undermine market incentives critical to the agricultural biotechnology sector and other innovative sectors. The United States continues to urge India to formally rescind the 2016 guidelines. India’s overall levels of IP enforcement remain deficient, and the lack of uniform progress across the country threatens to undercut the positive steps that certain states have taken.

The bonhomie between the US and India created by Modi seems to be fading. India has to think about its domestic concerns given its large rural population that is facing farming distress and unable to afford the royalty on genetically modified seeds. Further, access to medicines at an affordable price is an emotive issue. Added to this is India’s concerns about financial data being stored by payment companies overseas and therefore not available to them. This led to a directive, in the form of press note 2, that all such data should be stored locally. This change in policy led to concerns being expressed by the US as it directly affected payment companies such as Visa and MasterCard. Further, India’s new e-commerce policy document still in its draft stage puts heavy onus on e-commerce companies to keep the marketplace free from infringements. Further, restrictions are being placed on cross-border flow of a) data collected by IoT devices installed in public spaces and b) data generated by users in India by various sources, including e-commerce platforms, social media, search engines etc.

Overall, the Indian electorate has high expectations from the Modi government in its second term. At the same time, US, Japanese and European companies want access to the India market on terms suitable to them. At stake is 1.3 billion Indians of which more than half are below 30 years of age.

Please follow and like us: