The international IPR Regime governed by TRIPS Agreement, India’s progress towards fulfillment of obligations there under and the developed world’s TRIPS Plus IPR protection and enforcement agenda, and the use of plurilateral and bilateral mechanisms to bypass multilateral arrangements like TRIPS Agreement are some of the important issues to understand in the overall IPR scenario. This article explores this and also attempts to understand the lapses and challenges, if any, in the enforcement of IP rights.
As we all may recall a fable which used to be a part of our school syllabus that, ‘it is difficult to break a bundle of sticks, but the sticks can be broken separately one by one’. The same is probably what the developed countries have tacitly or instinctively understood between themselves, and have since been trying to bring in maximum levels of intellectual property rights protection world over. That is why instead of negotiating the maximum standards IP protection and enforcement standards at the multilateral forum like WTO, they have chosen to resort to bilateral Free Trade Agreements with the developing countries and plurilateral Anti-Counterfeiting Trade agreement amongst themselves.
Developing countries at WTO are like the sticks in a bundle which cannot be swayed upon or broken, as collectively they have a greater bargaining power, so developed countries have brought out the good old “divide and rule” policy. And the much stringent IP rules are negotiated and built into Free Trade Agreements like the recent one between India and European Union which is about to be signed in 2011.
The cajoling and coaxing bordering on coercion and undue influence have been so much so that on 30 April 2011, the Indian Prime Minister, Manmohan Singh, urged the Indian negotiators “not to take IPR obligations, particularly in the pharmaceuticals sector, beyond domestic laws or as mandated in a WTO pact” negotiating Free Trade Agreement (FTA) with European Union, officially known as Bilateral Trade and Investment Agreement (BTIA). The advice crystallizes points of divergence between the EU and India upon inclusion of “TRIPS Plus” obligations in the FTA. It further highlights the differences in the perception and the approach of the developed and the developing world on the issue of TRIPS Plus obligations.
The intent of the developed countries to do away with multilateral TRIPS Agreement through plurilateral and bilateral arrangements calling for TRIPS Plus IPR Regime has been put forth in a paper titled “Multilateral zing TRIPs-Plus Agreements” by Jean-Frederic Morin of University e Libre de Bruxelles, where he argues that “theorists have suggested that bilateralism is used by economically powerful states as their control over multilateral negotiation declines, introducing broader and stronger patent protection norms is considered more easily achieved …” and further observes that “through bilateral agreements than in the multilateral fora. Asymmetry in economic power presents powerful states with an alternative path in creating desired norms that they would not be able to negotiate successfully at the multilateral level.”
Before we go any further, let’s understand few basic things about economic importance of IPRS, purpose and intent of WTO, TRIPS Agreement and India’s obligations under TRIPS, TRIPS Plus and its implications, obligations and developed world’s TRIPS Plus enforcement trends.
“ACTA so far has proceeded in a translucent manner that has caused anxiety amongst stakeholders. It is a double-edged sword which, depending on the intent of IP owners and its usage, can cause both advancement as well as severe constraints on competition and thus consumer welfare. Without embedding competition and consumer concerns in its framework, it raises more questions than the answers it provides.”
Intellectual Property rights (IPR) such as patents, trademarks, designs, copyrights or geographical indications hold increasingly important place for the inventors, creators and businesses. These rights enable themto prevent unauthorised exploitation of their creations and distinctive signs, or to allow such exploitation in return for compensation. IPRs are one of the most important aspects of any modern economy and their protection and enforcement are the sine qua non of any economy’s ability to compete in the global economy. That competitiveness is built on the innovation apart from the value being added to the products by high levels of creativity. Therefore enforcement of intellectual property goes to the heart of an economy’s ability to compete nationally and globally. Otherwise economic growth and jobs are hampered when the IP i.e. ideas, brands and products are pirated and counterfeited. Moreover, counterfeit products like counterfeit drugs often place citizen’s safety or health at risk.
In 1995 the World Trade Organization (WTO) was brought into existence by about 150 states, to facilitate the rule-based trade amongst the member states, to promote legitimate trade and to do away with trade barriers. Trade related aspects of Intellectual Property Rights called TRIPS Agreement was a part of WTO pact. The Agreement came into existence essentially from the desire to narrow the gaps in the way intellectual property rights are protected around the world, and to bring them under common international rules. It established minimum levels of protection that each government had to give to the intellectual property of fellow WTO members. It was acknowledged that there was a huge gap between the developed and the developing world interms of the level of social, economic, scientific, Industrial and technological development, and ,therefore, a series of balancing measures were provided for in the TRIPS Agreement to balance the public interest and the rights of the IPR holders.
Though India like other developing countries had their reservations as to the need, desirability and utility of the obligations which they were asked to undertake under TRIPS Agreement, the argument put forth by the developed countries was that ‘it strikes a balance between the long term benefits and possible short term costs to society. Society benefits in the long term when intellectual property protection encourages creation and invention, especially when the period of protection expires and the creations and inventions enter the public domain. Governments are allowed to reduce any short term costs through various exceptions, for example to tackle public health problems’.
Between 1995-2005, the ten year transition period which ended in 2005, India legislated and amended its domestic IPR laws to bring them in sync with the prescribed standards which were set in the TRIPS Agreement within the transition period of 10 years, as was envisaged therein. And India has had to allocate and expend significant amount of already scarce resources to bring in legislative changes to protect and enforce IPRs in line with TRIPS obligations.
A paper titled “Multilateral agreements and a TRIPS-plus World: The World Intellectual Property Organisation” (WIPO) published by Quaker United Nations Office states TRIPSplus, as a concept, refers to the adoption of multilateral, plurilateral, regional and/or national intellectual property rules and practiceswhich have the effect of reducing the ability of developing countries to protect the public interest. It is in effect ‘any intellectual property agreement negotiated subsequent to TRIPS among and/or involving WTO creating higher protection and enforcement standards.” The paper further states that inclusion of any new standards would limit the ability of the developing countries to “promote technological innovation and to facilitate the transfer and dissemination of technology; take necessary measures to protect public health, nutrition and to promote the public interest in sectors of vital importance to their socio-economic and technological development; and take appropriate measures to prevent the abuse of intellectual property rights by right holders or the resort by right holders to practices which unreasonably restrain trade or adversely affect the international transfer of technology.” The paper further observes as tot the implications of TRIPS Plus as an “… over-emphasis upon the benefits of intellectual property while giving very little attention to its costs is the usual policy of the developed world…”
The EU has been demanding that India should enforce a tougher Patent protections and exclusive marketing rights particularly in pharmaceuticals and fulfil its TRIPS obligations. But Indian govt. has been resisting the same because of following reasons: It shall affect access to medicines out of reach for millions of people in the developing world. Further recognizing and strengthening protection of intellectual property rights over pharmaceutical products and processes will lead to high drug prices, low access to medicines and a weakening of pharmaceutical industries in the developing countries. It would reduce or eliminate competition from generic production of medicines. As the minimum term of 20-year patent protection required by TRIPS effectively allows a pharmaceutical company a monopoly over the production, marketing and pricing of patent protected medicines. It will be able to keep the price of the drug high during the protection period, free from competition. Resultantly, denying patients cheaper alternatives.
Domestic manufacturing of pharmaceutical products in developing countries will come to a standstill. Developing countries are able to produce new medicines by a process of reverse engineering; that is, researchers in developing countries may develop a new process different from the process invented (and protected by patent) to manufacture the new medicine or chemical entity. Reverse engineering is possible only in countries where the patent law protects processes but not products. The TRIPS Agreement extends the scope of patent protection to both products processes. It would therefore be possible to apply for patent rights over products for 20 years, and thereafter, further periods of 20 years each could be applied for products covered by patented processes. The TRIPS Agreement further requires patents to be granted, regardless whether the products are imported or locally produced. This will mean that a MNC can supply global markets under the patent monopoly, exporting the finished product instead of transferring technology or making foreign direct investment. This is contradictory to the argument of TRIPS proponents that strictpatent regimes will increase the flow of technology and investment into developing countries.
The concerned authorities do take action such as conducting raids, seizing products in this regard, but due to some of the reasons, mentioned below, it becomes highly difficult for them to ensure that infringement does not occur, hence, Nehru Place and Palika Bazaar along with other similar markets continue to thrive in India:
The mains reasons are lack of deterrent punishments under the Copyright Act, high level of corruption, time consuming litigation, ineffective raids as no stringent action is taken to enforce the provisions. Easy availability of the raw materials required for their manufacturing and their high demand (cause of high price sensitivity of the customers in India) is another reason why it’s highly difficult to curb and limit these offences. When raids are conducted the shops are shut down for the time being but later are reopened. Another reason is that these markets only distribute such products in these areas whereas the manufacturing units are at different places, when raids are conducted only a limited amount is seized and sealing of the shops remains ineffective as products still being manufactured can find their way into the market through some other means
If we look at the developments relating to international IP regime since 2005, a distinct surge in TRIPS Plus enforcement trends have been observed, when India at a huge man and material costs built up the entire legislative and administrative paraphernalia, it cannot be denied that there is a concerted multipronged approach in mounting a relentless pressure upon developing countries like India through differentmethods. The developments are nothing but a multilayered and multipronged attack to neutralize the balance between rights of IP holders and public interest which was sought to be reached at through TRIPS Agreement.
In 2007 the negotiations for bilateral trade agreement between India and European Union (EU) started. In its background note on FTAs, especially between India and EU, CEC an organization which works for the dissemination of information on issues of labour and livelihoods, clearly states the motivation behind negotiating such bilateral agreements “…FTAs are a preferred route for this as multilateral negotiations afford developing countries collective bargaining space while FTAs do not. Once sufficient FTAs are in place, the new regime can then be pushed more easily through multilateral forums like the WTO at a convenient time…”. The note further observes that “. It notes, “The EUs interest in pushing these ‘expanded’ FTAs is part of a broader agenda to maintainEurope’s competitive edge in the world economy. This has been clearly spelt out in 2006 document released by the European Commission entitled ‘Global Europe: Competing in a Globalized World.’ This document outlines EU’s new international trade policy stressing an aggressive push for market expansion for European goods in, and imports of raw materials from, the Global South through a series of FTAs measures taken by some of our biggest trading partners to restrict access to their supplies of these inputs are causing some EU industries major problems. Unless justified for security or environmental reasons, restrictions on access to resources should be removed.”
A paper titled’ Interpreting And Implementing The Trips Agreement: Is It Fair?’ by J. Malbon & C. Lawson, explores the nature of bilateral Free Trade Agreements (FTAs) between a strong state and a weak state containing TRIPS-Plus terms, and tries to understand whether TRIPS-Plus treaty terms as are built into such FTAs. And the paper maintains that these FTAs are often criticized as unfair or exploitative serving the self-interest of a strong state at the expense of the interests of a weak state. An implication underlying the criticisms is that TRIPS-plus terms are obtained through coercion or undue influence, or unfair exploitation of the strong party’s dominant position. The paper imagines an idealized situation in which the Vienna Convention on the Law of Treaties is amended in line with domestic contract law provisions so as to void treaty provisions that are obtained by coercion and unfair exploitation of a party’s dominant position. And it speculates as to whether such a reformedlegal position would influence a change in party behaviours to bring about “fairer” outcomes.
Around the same time i.e. in 2007, developed countries led by USA along with Japan, European Union, Canada, South Korea and Singapore amongst others started negotiating a plurilateral agreement between themselves, called the ACTA, the draft of which was released on November 2010 which is subject to legal review. It intends to establish international standards on IPR enforcement. ACTA would establish a new international legal framework that countries can join on a voluntary basis and would create its own governing body outside existing international institutions such as the WTO and the World Intellectual Property Organization (WIPO). Negotiatingcountries have described it as a response “to the increase in global trade of counterfeit goods and pirated copyright protected works.” It seeks address primarily issues concerning counterfeit goods, generic medicines and copyright infringement on the Internet.
“SPECIAL 301”
Another important piece in the troika of this multipronged strategy to bring in much stringent IP regime better known as TRIPS Plus is “Special 301” ,besides plurilateral ACTA, and bilateral FTAs. It is a report which has put India on “Priority watch list 2011” and tracks the copyright enforcement and protection issues world over. It is Prepared by Intellectual Property Alliance (IIPA) and Published by United States Trade Representative (USTR). It is an annual review of the global state of IPR protection and enforcement. Priority watch list is a list ofcountries whose IPR compliance is not satisfactory from the US point of view. This report dwells in detail on a series of enforcement, legislative and market access measures to allow the IP right holders to have ‘adequate protection and enforcement’ of their rights.
The critique in the Special 301 is that the Indian government falls short by failing to fully implement the WIPO Internet Treaties. However, we note that India is not a signatory to either of the WIPO Internet Treaties and does not have an international obligation to do so. Once again, it appears that insufficient weight has been placed on India’s progress in protecting IP rights over the Internet and undue emphasis placed on the lack of implementation of a formal treaty."
Amongst the measures advised by “Special 301” to be specifically implemented by India are that the Police must conduct suomoto raids upon the copyright pirates, creation of an antipiracy task force, training police and prosecutors, establish specialized IP courts, judges and procedures, empower customs to “effectuate ex officio seizures” followed by destruction of pirated goods. Allow market access by eliminating market access barriers including those imposed on motion pictures, entertainment software and business software. But ironically it fails to tell as to where the resources would come from to allow already overburdened police force to conduct suomoto raids, establish specialist IP courts etc. Besidesthe suggestions are largely are part of TRIPS Plus agenda which India has strongly opposed at WTO along with other important developing countries.
In October 2008, Dutch customs authorities seized a ship load of Indian generic medicines while in transit to Latin America citing a EU patent protection regulation no. 1383 of 2003. The Indian exporter fearing costly and protracted litigation chose to bring the medicines back. India through its diplomatic channels ‘Patent protection should not be used as an excuse for hampering the distribution of generic drugs among the poor people across the globe’ said Dutch Foreign Trade Minister Frank Heemskerk’s in February 2009 when he was confronted over the issue of seizure of ship-load of generic Indian medicines on the way to Brazil and Columbia on the charges of patent infringement under European Commission regulation 1383, which evoked a sharp reaction from India and Brazil. As neither in India nor in Brazil the patent sought to be protected was registered!
In a Writ Petition no. WP(C) No.7833/2008 , Bayer, a US based pharmaceutical multinational, sought to prevent Cipla, an Indian Pharmaceutical company ,from obtaining a drug license from the Drug Controller on the ground that it would infringe its patent and argued before the court as to the need of patentlinkage with the drug licensing mechanism and sought to achieve that by way of judicial interpretation. But Hon’ble Delhi High Court declined to interpret law as there is no law on the point in India and maintained that such an act would be like entering into legislative domain. Hon’ble Court while listening to letters patent appeal against the decision in the Writ observed on the situation as to the developed world’s TRIPS Plus enforcement agenda that: Discontent over TRIPS’ patent provisions goes well beyond pharmaceuticals. Patent systems are, by nature, the most administratively demanding form of IP protection, requiring extensive record-keeping and sophisticated technical analysis. Yet, given that the top ten industrialized countries account for 94% of patents granted worldwide, the benefits of patent protection are heavily skewed. Even TRIPS’ defenders concede that its patent mandate represents an onerous and costly obligation whose immediate benefits will redound primarily to rich multinational companies. Furthermore, because technology is a cumulative enterprise, TRIPS opponents worry that enforcing patent monopolies will deny developing countries access to vital technology, relegating them to a future of economic dependency.” The Division Bench further observed that: “There is also merit in the contention that patent linkage is a TRIPS Plus concept and India has only signed on to TRIPS. Worldwide there is a raging debate on whether patent linkage should be permitted. There is no uniformity in the policy of different countries. In the U.S.A for a short period of 30 months, during which the onus is on the patentee to seek an injunction against the alleged infringer, patent linkage is recognised. If within that period no injunction is granted by the court of law, then the marketing/manufacturing approval is granted to the generic manufacturer. Unless, there are express provisions in the DCA requiring the DCGI not to grant marketing approval to a generic manufacturer in respect of a patented drug, it is not possible for this court to read such a requirement into the law.”
Indian delegation to WTO TRIPS Council on 9 June 2010 forcefully argued against the surge in the bilateral and plurilateral initiatives to undermine multilateral TRIPS Agreement. The delegation voiced their concerns and stated that “There is no doubt that IPR enforcement is an issue of fundamental importance, which India takes very seriously. However, our concerns emanate from levels of enforcement which far exceed those foreseen in TRIPS Agreement.”
It further observed that ‘RTAs and plurilateral initiatives like the ACTA… call for higher levels of protection which are likely to disturb the balance of rights and obligations enshrined in the agreement, interalia, in the Preamble (the Objectives and Principles, Art 7-8) and have the potential to constrain the flexibilities and policy space provided by the TRIPS Agreement to developing country members like India, particularly in areas such as public health, transfer of technology, socio-economic development, promotion of innovation and access to knowledge. They could also potentially negate decisions taken multilaterally such as the Doha Declaration on Public Health in WTO and the Development Agenda in WIPO…’
On the problems related to enforcements
“Enforcement of Intellectual property rights in India faces lots of challenges and needs to be strengthened, keeping the larger national interest in mind. Though, there are number of legislations, which regulate the IPR, in the form of specific IPR laws i.e. Trademark, Copyright, Patent laws as well as Indian Penal Code and Civil procedure code, but need of hour is a specialised and tactful judiciary system. Apart from Metro and few big cities, there is a great need for the improvement in awareness in Judicial system and police authorities about the severity of infringement of IPRs and the need to enforce the rights of genuine IPR holder. Few most affected industry segments from the ailment of piracy are software, music and film industry, which are struggling hard to protect their IP rights for want of proper enforcement and it directly burns a hole in their pocket. Besides judiciary and police administration, there is also a tendency amongst the larger public to go for the pirated software, books, audio or video CDs and adding to the woes of the genuine IPR owners is the open roadside sale of such pirated products, without any adverse action against them.
Another reason why enforcement is not so strong is the safety related aspects of it, as getting raids through the help of local police authorities may endanger the personal safety of the employees/representatives of the IPR holder company, as the persons being raided may go to the extent of causing personal harm. That’s is the reason most of such enforcement related work in office automation industry i.e. printer cartridges/ photocopy toner companies is outsourced to third party agencies, who along with the local police authorities carry out such raids/investigation.
As a measure of strengthening the IPR enforcements, the IPR holder should be encouraged to participate in enforcement actions. The quantum of damages awarded by the courts should be such that they not only compensate the right holder for the losses suffered, but should also act as a deterrent for infringers form engaging in illegal activities.”
Some of the criticisms of TRIPS Plus trends aired by the delegation are as follows:
If we want to stem the surge of TRIPS Plus enforcement trends, then there is a need to talk tough as it holds true for developed countries as well as developing countries like India that if we need their money and technology they also need our markets, our human and material resources to even carry out their secretarial work. Besides their economies are still reeling under post recession turmoil, as fears are being expressed as to some of the economies may default on their debt obligations. So it’s a situationwhere India holds a considerable leverage in terms of business and investment opportunities.
As was stated by Union Commerce and Industry Minister Mr.Anand Sharma, on the issue of Latin America bound Indian generic medicines being seized by Dutch customs on the pretext of patent protection even though the patent holder was neither registered in India or Brazil!, that as a result of India’s firm stand, during the recent India-EU Summit, EU informed that the Commission has intensified efforts on finalisation of proposal for revision of Regulation 1383 which was invoked to seize Indian drugs. And whatever may be the motives of the developed country it is pertinent that equity and fair play must be practiced at the international level and the fact that 90 per cent of the world’s patents are held by the top ten most developed countries, should not be used to deny the poor and developing countries from their legitimate development related need for technologies and health care systems etc.
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