India and IPRs Laws

By Ayush Kukreja,

(Image source: LegalDocs)

Copyrights, trademarks, patents, etc are terms which are often non-synonymous with economic significance and put away as indifferent to the facets of micro and macro trade. It suffices to attach the notion of ‘proprietorship’ and hence the meaning of ‘intellectual property rights’ is lost. Intellectual property rights (IPRs) basically refer to industrial and copyright laws. Industrial laws can be further broken down into trademarks, patents, industrial designs and geographical indications. While copyright laws are mostly restricted to the entertainment industry, we lay specific significance to industrial laws because they bear the most relevance for the economy.

Amidst the crippling trade war between the US and China, IPRs should be given more importance now than ever. India seems to be the next target of the US conglomerates, who cannot stand the 5th largest GDP churning country free riding the tariff benefits it enjoys. India stands at 36th rank out of 45 countries when it comes to the protection of IPRs and this explains the lack of Foreign Direct Investment (FDI), investments in Research and Development (R&D) or technology transfers into the country. The year 2018 saw India at 43rd position and the renewed ranking seems definitely promising, but it was the result of the delayed effects of the one and only policy on IPRs implemented by the Indian government in 2016. It lays the bare minimum standards for IPRs implementation in India under the World Trade Organization’s (WTO) TRIPS agreement and ensures fast track procedures for startups and legislative issues.

On the surface, all this promises optimism and reform in the “Ease of doing business” index for India but the country has bigger issues in the field of healthcare to deal with, which is where the IPRs agreements and norms allow “developing countries” like India some leeway for cheaper alternatives. Methods such as ‘compulsory licensing’ and ‘ever greening’ legally allow India to manufacture drugs at highly subsidised costs. This trendsetting activity by India has made several big pharmaceuticals take the matter to the courts where India has always courted the matter in its favour. The recent Pepsico Lays vs Gujarat farmers’ case is not just all about infringement of IPRs on the grounds of genetically modified potato seeds but also casts a moral shadow over the ethics of conducting business and agriculture. Regardless, there remains an unquestionable stance on the lack of public-private partnerships. Government interests never coincide with corporates and nobody seems to be least bothered about investing in India.

TRIPS Agreement saw the shift in India’s policy from ‘process-patents’ to ‘product-patents’ which was a huge transitional move away from the reverse engineering technique which the Indian manufactures would apply to get to the product without putting brains into it. There seems to be substantial upliftment in the R&D sector, but the lack of other forms of investments has hindered the incentive generation process. Returns on borrowing money from the banks are usually higher and have a short-time window. One dollar invested through venture capital channels certainly bears more outputs than one dollar invested in the R&D sector. Labour, capital and manufacturing are no longer the driving forces of the economy and this is the realisation India needs to have. Innovation and entrepreneurship should be the primary objective initiatives likes ‘Make in India’ and ‘Startup India’ need to devise. Globalisation as a blanket force, undeniably requires a “keeping up with the trends” strategy which Japan’s software industry failed to realise in the 90s and was forced to copy IBM illegally, following which the FBI’s probe sent the Japanese economy for a major setback.

WTO rules need to be complied with formal measures and India cannot make its membership value vulnerable to threats. US Chamber of Commerce ranks countries taking into account six indicators: patents, trademarks, copyrights, trade secrets, market access, enforcement and ratification of international treaties. The infrastructure required to enforce all this is already in the pipeline but pragmatic shifts in the nature of bilateral and multilateral agreements made by India in the arena of technology transfers will bear serious answers to the problems we are faced with. A storm of ‘intellectual’ wars awaits if India fails to realise the gravity of the situation.

(Ayush Kukreja was a Research Intern at Centre for Public Policy Research. Views expressed by the author is personal and need not reflect or represent the views of Centre for Public Policy Research)