Explained: What’s IPR and why US has put India on the priority watch list

On Thursday, April 25, the Office of the United States Trade Representative (USTR) released its Special 301 report that placed Indian on the Priority Watch List along with 36 other countries.

The USTR says, “The Special 301 Report identifies trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise den market access to U.S. innovators and creators that rely on protection of their IP rights.”

India, Pakistan, and China are on the Priority Watch List along with Algeria, Argentina, Chile, Indonesia, Kuwait, Russia, Saudi Arabia, Ukraine, and Venezuela.

In India’s case, the USTR said it “identifies India on the Priority Watch List for lack of sufficient measurable improvements to its IP framework on long-standing and new challenges that have negatively affected U.S. right holders over the past year”.

What are intellectual property rights?

The WTO explains that IP rights are the rights provided to people for creations in their mind. An IP right gives a creator the exclusive right over the use of his/her creation for a specified period of time.

IP rights cover copyright and industrial property. In copyright issues, work produced by authors, artists, musicians, actors, singers, and filmmakers is protected by copyright for at least 50 years after their death.

“The main social purpose of protection of copyright and related rights is to encourage and reward creative work,” says the WTO.

Industrial property can also be guarded by IP rights. Design and technology inventions and trade secrets are considered protected industrial property for up to 20 years if patented.

The WTO says, “The social purpose is to provide protection for the results of investment in the development of new technology, thus giving the incentive and means to finance research and development activities.”

Why is India on the list for IP rights violations?

Brian Scarpelli of The App Association said India lacks efficient and strict enforcement of laws related to IP rights.

He said there has been some progress, like acceding to the WIPO Internet Treaties, criminalising video piracy, and the Supreme Court ruling in favour of patent rights.

But these efforts are not good enough for the US because certain legislation, like rules on software patents and the Copyright Act lack clarity. The USTR added that US businesses find it difficult to maintain patents, particularly in the pharmaceuticals industry.

It also said copyright policies do not adequately incentivise commercial content, and legal remedies for exchange trade secrets are outdated and insufficient.

Roger Murry of The Alliance for Fair Trade with India (AFTI) said India’s poor IP practices have created trade barriers for US companies.

“They [India’s IP policies] also hold back Indian innovators, creators, and entrepreneurs and rob India of critical investment and trade that could move India’s economy forward,” said Murry.

Hence, American officials decided to place India on the Priority Watch List.

Notorious Markets List

The USTR also published the Notorious Markets List that mentions online and offline markets that deal in and facilitate copyright piracy and trademark counterfeiting.

In 2017, Indiamart.com was on the Notorious Market list as an illegal pharmacy that sells controlled substances like opioids.

In 2018, Tank Road in Delhi was listed as a Notorious Market for selling counterfeit apparel and footwear directly and through Gaffar Market and Ajmal Khan Road.

USTR said, “These wholesalers appear to operate freely, allowing them to build well-established businesses over many years. USTR encourages India to take sustained and coordinated enforcement action at the Tank Road market, previously-listed markets, and numerous other non-listed markets in its territory.”

Markets in Argentina, Brazil, Cambodia, Ecuador, Indonesia, Malaysia, Mexico, Paraguay, Peru, the Philippines, Russia, Spain, Turkey, Ukraine, United Arab Emirates, and Vietnam also made the list.

Thailand’s famous Patpong Market and Turkey’s ancient Grand Bazaar were flagged as ‘notorious’, as well.

Next steps for India

To tackle concerns about IP rights, the USTR said it will increase bilateral talks with these countries and review progress of IP protection against the standards details in the Special 301 report.

If countries fail to engage successfully with the US, the USTR said it will “take appropriate actions”, such as enforcement of the law as allowed under Section 301 of the Trade Act, the World Trade Organisation (WTO) or any other trade agreements signed with those countries.

Trade relations between India and the US have not irreparable fractured. There is still an opportunity for both sides to engage in dialogue and find a mutually beneficial arrangement. If these talks are successful, the Indian government will hopefully take IP rights seriously and ensure existing legislation is implemented and new laws are passed.

Rhea Arora is a Staff Writer at Qrius

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