Future free trade agreement with India

On 31 August 2021, CIPA submitted a response to the UK government’s request for input on future free trade agreement with India.

Introduction

CIPA members assist their clients (and sometimes employers) in developing global IP strategies, including for India. They also obtain IP protection in India for their clients, usually by instructing local Indian attorneys. To a lesser extent, many CIPA members act on instructions from attorneys in India to assist Indian companies in obtaining protection in the UK and/ or across Europe. CIPA members are also involved in developing and implementing commercialisation and enforcement strategies for IP rights, including rights in India. They are also involved in reviewing the impact of IP rights, including Indian IP rights, held by third parties on the plans and strategies of their clients for new products and services.

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General comment

India does not have a modern IP system that functions to a high standard. This is a significant difference for the UK’s negotiators to consider in discussions with India regarding a possible future free trade agreement, compared with the negotiations already in progress with counties, such as Australia, New Zealand and the US, which do have well-developed IP systems. In fact, the Indian system is arguably not even compliant with the minimum standards set by TRIPS. The inadequacies of the Indian IP system must be addressed if there is to be an IP chapter in a trade agreement between the UK and India. If it is not possible to persuade India to adopt acceptable levels of IP protection and enforcement, CIPA believes that it would be better not to include an IP chapter in a trade agreement. The UK should not be put in the position of appearing to endorse in any way the current lack of meaningful protection for IP in India.

Problems exist at multiple levels in the Indian IP environment. There are examples of important types of protection not being available. There are also examples of Indian law containing specific provisions designed to create additional hurdles for obtaining protection. In other areas, the written law may appear acceptable, but it is no applied effectively in practice. We have highlighted some particularly problematic areas below and would welcome the opportunity for further discussions.

Enforcement of IP rights

Our members report severe difficulty in enforcing IP rights of all types in India. In part, this is simply due to courts being overburdened, in spite of the best efforts of those employed in the system. However, in some areas, there appear to be systematic biases against enforcing IP, notably, in pharma/ healthcare technologies. Although the court system may appear to be adequate on paper, it does not operate effectively in practice. Litigants suffer excessive delays, bureaucracy and in some technology areas it is almost impossible to enforce IP rights.

Even where a litigant does succeed in getting a decision that their IP is infringed, we have multiple reports of the Indian courts being unwilling to grant injunctions.

In the few cases where an injunction is obtained, it is difficult to bring it into effect in a meaningful way. For example, frequently another infringer will spring up, nearby and involving the same people or close associates and relatives of those individuals, to resume the infringing activities within a matter of days leaving the rights holder back at square one.

Patents

In some fields, it is extremely difficult to get applications through the Indian Patent Office to grant. To a certain extent, this may simply be due to a shortage of trained examiners. However, in other areas, there appears to be a strategy to set up additional hurdles and barriers to prevent patents from being obtained. For example, in the area of pharmaceuticals, there is in practice, an additional hurdle to patentability, contrary to TRIPS. This requirement (Article 3d) is interpreted very broadly, such that new active entities are often considered to be derivatives of previous active entities and therefore excluded from patentability, when in fact they are new active substances. This is economically significant given the UK’s strength in life sciences.

Another major problem is the stringent requirements for working patents in India and the severe consequences for not complying. While this may appear to the uninitiated to be merely a bureaucratic inconvenience, in practice, it causes real difficulties; it is not easy to determine exactly which patents are worked in complex multi-component products or methods and when that working commences. It appears that system has been set up primarily to promote compulsory licensing. Other countries do not have similar requirements.

Trade marks, designs and copyrights

Our members concerns in these areas are primarily around lack of speed in procedures and in enforcement. See our comments above.

Data exclusivity/ patent term extensions

India does not provide any meaningful regulatory data exclusivity protection for pharmaceuticals, nor does it provide extensions (such as supplementary protection certificates) to compensate for regulatory delays. The lack of these types of protection is significant for biotechnology and pharmaceutical products and again, appears part of a deliberate strategy to limit the intellectual property protection in these areas compared with international norms.

Summary

In summary, it is currently difficult to obtain meaningful IP protection and even harder to enforce it effectively in the vast majority of cases in India. This is a problem for the UK as an innovative economy and for UK businesses.

A related difficulty, although not strictly speaking within the field of intellectual property, is that the Indian government’s requirements around company ownership, for example, shares in joint ventures, in many fields, means that UK businesses wishing to commercialise their innovations in India are compelled to share the details with local players. If the relationship subsequently breaks down, the UK business is then faced with the almost insurmountable hurdles for enforcing IP as mentioned above. CIPA believes this is another part of the eco-system that is set up to favour local Indian businesses at the expense of those from other countries. This must be addressed holistically.

CIPA participates in regular conversations with the Department for International Trade and the IPO and and raised these issues in virtual meetings. CIPA hopes to continue our close collaboration with government and stand ready to assist as negotiations proceed.

Date Published: 31 August 2021

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