In a move aimed at removal of India from the USTR Priority Watch List, Indian Pharmaceutical Alliance (IPA) has filed its submission to the USTR for 2017 Special 301 Review citing in support several actions taken by the government for improving the IPR environment and enforcement.

Priority Watch List comprises countries which have lenient patent laws affecting interests of the US medicine manufacturers. Last year USTR's Special 301 Review, which is a congressionally-mandated annual report identifying trade barriers to US companies and products due to IPR in other countries, had placed India on Priority Watch List expressing concern over certain provisions in India’s patent regime including provisions related to pre-and post-grant challenges, irregularities in the application of Section 3(d), use of compulsory licensing and failure to ensure data exclusivity.

In a submission to USTR, IPA, a representative body of 20 Indian research based pharmaceutical companies, has appealed to USTR to review its Special 301 Report, 2016 on India in the wake of a better environment for the protection and enforcement of IPR over the last couple of years. Strong channels of engagement with the United States on IPR issues, improved communication with industry stakeholders, increasing public recognition of the importance of IPR, integrity of judicial processes, deliberate and transparent process employed in India’s evaluation of a compulsory license application in 2015, implementation of the National IPR Policy, four fold rise in patent examiners have contributed to improved IPR environment in the country, added IPA.

IPA general secretary DG Shah said that the increasing commercial collaboration between US and Indian pharmaceutical companies is indicative of the ways in which US companies are increasing their revenues from India and spreading their development costs. It must, however, be noted that the Indian market for expensive medication under patent is small. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act will undoubtedly reduce litigation time for IPR disputes in the long term.

Talking about compulsory licensing, he said “There has been no grant of compulsory license in 2015 and 2016 or revocation under Section 66. We are also not aware of any abusive patent opposition.”

Clarifying doubts about Section 3(d), Shah stated that Section 3(d) does not discriminate between Indian and foreign applicants for patents. Market access, to the extent it is influenced by patent protection, is neither unfair nor inequitable to US persons as compared to Indian persons or those domiciled elsewhere. Section 3(d) is in conformity with the TRIPS Agreement. Patents Act in India ensures that even if there are procedural delays in the grant of a patent, whether by reason of examination or opposition, there is no erosion in the effective life of the patent, which remains 20 years from the date of first filing (Section 53). Further, there is no substantive damage to the patentee due to delays in grant, as the Indian statute provides for damages from the date of publication of the patent application in the event of infringement of a granted patent (Section 45(3)). Section 3(d) only restricts secondary patents that do not increase efficacy and typically lead to evergreening. He equated Section 3(d) of India’s Patent Act with Hatch-Waxman provision.

The proposed provision in the Patent Amendment Rules noted in the 2016 Report which gave rise to the apprehension that patent applicants would be pressurized into local manufacture has been removed.

Talking about data exclusivity, he said “There is no clarification about the extent of adverse impact of the lack of data exclusivity on US companies. No specific details have been provided in past submissions by US companies in this regard. We do not expect that the impact will be significant. Our expectation is also borne out by the simulation studies conducted by the United States International Trade Commission (USITC) that the likely increase in employment in the US if India provided for TRIPS-plus IPR on par with the prevalent standard in the US indicated ‘employment gains of less than 10,000 jobs’ for all US sectors put together. The pharmaceutical industry would account only for a fraction of this.”