Why did PM Modi agree to give away India’s patent sovereignty to Americans?

With the hype of his Madison Square Garden show overshadowing everything else, Prime Minister Narendra Modi’s US visit was dubbed as a great bilateral victory for India. As the popular consensus went, Modi wowed both the Indian Americans and American politicians and even managed to get a joint op-ed article with President Barack Obama in the Washington Post stressing the importance of the partnership between the two countries.

Was it really a huge socio-economic and political success for India? There can be two opinions about it, however at least in one extraordinarily crucial sector, India is going to terribly lose. The agreement with the US in the sector will affect India’s sovereignty and the lives of its present and future generations.

 Why did PM Modi agree to give away India’s patent sovereignty to Americans?

Prime Minister Narendra Modi. Image courtesy PIB

The sector in question is Intellectual Property Rights (IPR). Take a look at the following text from the joint statement by the US and India after Modi met with Obama.

"The leaders discussed their concerns about the current impasse in the World Trade Organization and its effect on the multilateral trading system, and directed their officials to consult urgently along with other WTO members on the next steps. The leaders committed to work through the Trade Policy Forum to promote a business environment attractive for companies to invest and manufacture in India and in the United States. Agreeing on the need to foster innovation in a manner that promotes economic growth and job creation, the leaders committed to establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of the Trade Policy Forum."

The devil is in the detail. It talks about a high level bilateral working group on intellectual property. While India has been proud of its intellectual property regime, that abides by multilateral agreements such as those at WTO, and TRIPS flexibilities, why should it have a committee to discuss it with the US? More over, the decision comes at a time when activists in India have been demanding more robust action on intellectual property rights, particularly in pharma sector so that more people can access lifesaving medication.

The decision to set up the committee is a complete sell out to the US interests because India had decided not to cooperate with an earlier investigation by the US International Trade Commission (USITC) into India's IP issues. The investigation was titled'Trade, Investment and Industrial Policies in India: Effects on the US Economy', and the USITC had even conducted a public hearing. The investigation was necessitated by a joint letter by the Senate Committee on Finance and the House Committee on Ways and Means in August 2013. In their Joint Letter, these Committees requested USITC to prepare a fact-finding investigation report on India by 30 November 2014.

On IP protection and enforcement, the letter, said: "India has not yet taken action to fully and effectively protect and enforce copyrights, including in the digital environment and has applied its patent law in a discriminatory manner, particularly against innovative US pharmaceutical companies, so as to advantage its domestic industries. It also said that “Beyond any particular action India has taken, the Government has enunciated a broader policy objective to develop and support Indian domestic industry by forcing foreign firms to use local facilities and suppliers and to transfer their intellectual property to Indian entities."

With the USITC investigation and the pressure from domestic lobbies - both political and economic - it was very clear that the US wanted Indian IP policies to change in such a way that it benefited the most. For the Americans, it has been a thorn in the flesh that obstructed their free wheeling trade practices.

The most dangerous aspect of the proposed committee that India has agreed to is the empowerment for decision-making. Why should the US be allowed a role on India’s decision making responsibilities in IP?

One of the worst hit, if this committee moves forward and makes decisions that tinker with the existing IP policy, will be the pharma industry. In the recent past, the country has seen how a conducive IP policy, that doesn’t violate international conventions, has greatly helped millions of people who are in need for urgent modern medical care. The compulsory licensing (in simple terms, breaking the patent of an MNC company because of domestic medical needs) of a couple of drugs have brought down their prices manifold and there is demand for more such decisions from healthcare activists. The US pharma lobby has been wrongfully going to town against such decisions saying that India doesn't respect patent and innovation.

It was the existing IP policy that helped build India’s pharma industry, which now is the lifeline for not only the country’s healthcare needs, but also that of most of the developing world. This regime is extremely crucial for ensuring an enabling environment for the pharma industry because it is still not capable of developing new drugs on its own given the poor resources at its disposal.

For the manufacturing sector, the present Patent Act is important to access technology, particularly the climate friendly technologies that the joint agreement is talking about. Regarding agriculture, India’s existing regime is important to deny patent to seeds that otherwise would tie farmers to the stranglehold of MNC companies. The existing regime is also favourable to Indian biotech companies.

Ever since the Indian supreme court dismissed Swiss pharma company Novartis patent plea for its cancer drug Glivec last year, there has been intense pressure on India from the US pharma companies. The US industry and trade bodies have tried to depict India as an IP-rogue whereas the reality was that India always complied with multilateral agreements that it was party to.

The Supreme Court order that rejected the Novartis plea was remarkable for its vision, when it said: "We certainly do not wish the law of patent in this country to develop on the lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skillful lawyers, and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent."

The ITC investigation was a result of the pressure from the US lobbies and the Indian government (under Manmohan Singh) rightfully refused to cooperate with it. Now, by agreeing to a joint committee that will oversee Indian patent policy, India has dangerously opened its policy space to the Americans.

It certainly doesn’t augur well for India and Indians.

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Updated Date: Oct 08, 2014 11:35:28 IST