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India still on Priority watch list- USTR Special 301 Report 2022

June 27, 2022
intellectual-property

By Vikrant Rana and Arpit Kalra

The Office of the United States Trade representatives (USTR) released its Special 301 Report on April 27, 2022, an annual review of the state of intellectual property (IP) protection and enforcement in the U.S. trading partners around the world.

The Report identifies a wide range of concerns, including:

  • Challenges with border and criminal enforcement against counterfeits, including in the online environment;
  • High levels of online and broadcast piracy, including through illicit streaming devices;
  • Inadequacies in trade secret protection and enforcement in countries;
  • Troubling “indigenous innovation”
  • Forced technology transfer policies that may unfairly disadvantage US right holders in markets abroad; and
  • Other ongoing, systemic issues regarding IP protection and enforcement, as well as market access, in many trading partners around the world.

USTR Special 301 Report of 2022

The USTR Special 301 Report of 2022 quotes India as “one of the world’s most challenging major economies with respect to protection and enforcement of IP”. The Report has again included India’s name in the Priority Watch List.  This Year along with India, six other nations were included in the Priority Watch list, namely Argentina, Chile, China, Indonesia, Russia, and Venezuela.

Takeaways from the USTR Report

Stance on India

CIPAM’s activities for promotion of IPR awareness have been applauded in the Report and it states that CIPAM maintained an active social media presence.

That USPTO and India’s Department for Promotion of Industry and Internal Trade (DPIIT) have signed a new Memorandum of Understanding (MoU) related to IP technical cooperation mechanisms, and DPIIT and USPTO are in the process of entering into a biennial work plan to guide implementation of the Memorandum.

India notified Design (Amendment) Rules 2021 that reduce fees for startups seeking design protection. India-United States Trade Policy Forum (TPF), which met three times in 2021, exchanged ideas and discussed developments on patent, copyright, and trademark issues, among others.

That at the twelfth Ministerial-level meeting of the TPF held in November 2021, India clarified certain aspects of its patent and trademark systems and agreed to comply with the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty and WIPO Copyright Treaty, collectively known as the WIPO Internet Treaties. USTR engagement in the past year included Engagement with India on the administration of its patent regime, including on disclosure requirements, treatment of confidential information, patent application oppositions.

Progress: Positive or Negative?

The Report states that in the past one year India has remained inconsistent in its progress on intellectual property (IP) protection and enforcement. That although India’s enforcement of IP improved on the online front, increased IP examination staffing has reduced some patent and trademark examinations, and engagement with the United States on IP issues has accelerated.

Patent

The Issue of Patent was still a major concern in terms of:

  1. Patent revocations, lack of presumption of patent validity;
  2. The report states that the issue of narrow patentability criteria has been impacting companies of different industries,
  • That the filing of a patent application is not cost effective and consumes a lot of time in terms of pre- and post-grant oppositions, long waiting periods to receive patent grants, and excessive reporting requirements;
  1. India also maintains high custom duties directed to IP-intensive products like medical devices, pharmaceuticals, etc.,
  2. Some stakeholders also expressed concerns related to the unfair commercial use and unauthorized discloser of any data for which the patent has not been granted or when it is just on the filing stage;
  3. It would be relevant to mention herein, that taking into consideration the aforesaid concerns, in December 2021, a Joint Parliamentary Committee had taken steps and issued a revised manual of Patent Office Practice and Procedure and also revised FORM 27. Form 27 provides for the Statement of Working of Patents;
  • The Manual Instructed the Patent examiners to look into the IPO Centralized Access to Search and Examination (CASE) system and Digital Access Service (DAS) to find information filed by patent applicants in other jurisdictions;
  • A concern from the stakeholders came into light that this practice of due diligence was not being followed;

 

Counterfeit products

  • The report states that India is one of the top five source economies for fake good as indicated by the Organization for Economic Co-operation and Development’s Trends (OECD) in Trade in Counterfeit and Pirated Goods (2019);
  • That India is also a home to several markets which promote counterfeiting and piracy, as identified in the 2021 Notorious Markets List. The 2021 Notorious Markets list featured the Indian markets Heera Panna (Mumbai), Kidderpore (Kolkata), Palika Bazaar and Tank Road of New Delhi.

 Trademark Counterfeiting

  • The report states that the US brand owners have reported excessive delays in trademark opposition proceedings. For example, it remains unclear whether trademark owners can apply directly for recognition of “well-known” trademark status without having to rely on previous Indian court or trademark office decisions;
  • With reference to trade secrets, the Reports states that India relies majorly on contract law for which the civil remedies are also unachievable and also criminal penalties are missing in action if any dispute arises;
  • Trade secrets has been a growing concern within the US and Indian companies and the Report suggests the “adoption of trade secret legislation that comprehensively addresses these concerns”.

Copyright and Piracy

  • The Report states that the copyright holders continue to report high levels of piracy;
  • With respect to Section 31D, the Report states that amending Section 31D of the Copyright Act 1957, to permit statutory licensing of interactive transmissions would have severe implications for right holders who make their content available online, and that the United States urges India to ensure consistency with international standards;
  • The Report also states that the stakeholders have reported continuing problems with unauthorized file sharing of videogames, signal theft by cable operators, commercial-scale photocopying and unauthorized reprints of academic books, and circumvention of technological protection measures;
  • That Court cases and government have raised concerns about the absence of copyright for a broad range of published works;

That there has been an ambiguity in the wake of abolition of the IPAB in July 2021 as the same has raised questions on the adjudication of IP cases and copyright royalty rate setting. With reference to this point raised by the USTR, it would be pertinent to mention here that post IPAB abolition, an Intellectual Property Division (IPD) was created by the Hon’ble Delhi High Court and Rules governing the operations of the IPD were also formulated. On a positive note, the IP Division of the Delhi High Court is functional and IP cases are being adjudicated upon by this Bench, specifically designated for handling IP cases only. Hence, it is expected that in the coming months the IP cases and disputes will be enforced in a timely and expedient manner in India;

  • The Report also stated that during the last year, India has taken some strict actions against websites with pirated content and has also urged the general public to not consume content from such pirated sites;

Conclusion

The 2022 Edition of the report highlights several issues, however it is noteworthy to mention here that several initiatives are being taken to expedite trademark oppositions and prosecution processes. Further the establishment of a special Bench in the Delhi High Court for handling only IP cases is also a commendable move and it is expected that in the coming years the IP processes and handling will change for the better. It is also noteworthy to mention here about the Report of the Parliamentary Committee on Review of IPR regime in India which has made several observations and recommendations on the IP laws and regulations in India. In response to this Report, the DPIIT has also released a report on Action Taken, which suggests that the Government is considering several revisions in the IP laws as well as administrative changes which will make the Indian IPR regime robust in the coming times.

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