G.I.P.

C Report

Himanshu Gupta

Intern
FICCI IPR Division

The Global Intellectual Property Center, a subordinate of the U.S. Chamber of Commerce has
released her latest GIPC International IP Index-2014 report Charting the Course, a 2nd such
report since 2012, to gauge the I.P environment of 25 countries based on 30 factors
categorized under 6 categories.

The latest report expresses a great disappointment with regard to the Indian I.P. regime,
awarding her a trifle score of 6.95 out of 30, a concerning aggregate of 23.23% beside placing
her at last, even below countries like Indonesia, Nigeria and Vietnam, expresses its anathema
over the stringent patentability requirement in India and issue of compulsory license for the
cancer drug Nexavar that G.I.P.C. considers are in violation of TRIPS agreement and expresses
her abhorrence over limited presence of Digital Rights Management legislation, and feels that
the application and enforcement of civil remedies and criminal penalties to balk I.P. infringers
are below expectation besides expressing her serious concern over non-availability of
Regulatory Data Protection & Patent Term restoration, use of Compulsory Licensing, and high
level of software & music piracy and counterfeit goods and at last, wishes India to be a
contracting party to a major International IP treaties like WIPO Internet Treaties, Singapore
Treaty on the Law of Trademarks, Patent Law Treaty etc.

Some of the silent features of the GIPC report are:

1. GIPC considers that the Indian Patentability Requirement does not align with the
International standards of novelty, inventive steps and industrial applicability but has an
additional fourth hurdle with regard to inventive step and enhanced efficacy that limits
patentability for certain types of pharmaceutical inventions and chemical compounds.
The report seems to consider that the requirement with regard to enhanced efficacy is
foiling the creative and innovative environment but a deeper thought would disapprove
the above statement. The Report fails to consider the concerning issue of evergreening
of patent where a patent holder try to extend the monopoly given to his/her existing
invention by trying to patent a new forms of existing pharmaceutical substances that do
not demonstrate significantly enhanced efficacy. The section 3(d) of the Indian Patent
Act, is against the evergreening of patent that doesnt promote a culture of making
effort to innovate breakthrough technology but allow pharmaceutical companies to
 maintain the high cost of life-saving drug by just sitting on to a particular patent for
unreasonably extended period of time.
2. The report abhors the only instance of issue of compulsory license with regard to
Nexavar to a generic drug manufacturer Nacto and the upheld of the C.L. by the
Intellectual Property Appellate Board that was lauded by the Nobel Leaurate for Peace
Mdecins Sans Frontires. The GIPC considers that the issue of the C.L. was against the
spirit of TRIPS agreement and was for commercial purpose.
It seems that GIPC failed to consider that Bayer Company, proprietary owner of
Nexavar, was providing the drug at $5000, which is not affordable to large proportions
of Indians.
3. GIPC also raises concern regarding the non-availability of Patent Term Restoration for
Pharmaceutical products and Regulatory Data Protection.
Both concepts affects the generic industries and hiders the accessibility of affordable
and critical lifesaving drugs to Indians not belonging to the economically fortunate
section and thus, defying the very purpose (i.e., welfare of public) of awarding patent by
any government.
Why should GIPC expect Indian government that runs on the taxpayer money of Indians
to make efforts to bring legislations covering above issues if such legislations do not
serve the Interest of large proportions of Indians who could not afford the costly drugs?
4. India has received a criticizing and an alarming score in the Categories relating to
Copyrights and Enforcement. A score as low as 1.48 out of 6 in the category of
Enforcement and 1.47 out of 6 in the category of Copyrights reflects an unpleasant
picture of Indian I.P. regime.
A low score in the
a. indicator 13 with regard to the clear implementation of policies and guidelines
requiring proprietary software used on government ICT systems to be licensed
software (score: 0.25 out of 1).
b. indicator 10 concerning the availability of frameworks that promote cooperative
action against online piracy. (score: 0.25)
c. indicator 18 regarding the availability of frameworks that promote action against
online sale of counterfeit goods (score: 0.25)
d. indicator 21 and 22 reflecting the physical counterfeiting rates and software
piracy rates (score: 0.36 and 0.37 respectively)
e. indicator 25 and 26 concerning the criminal standards and effective border
measurement (score: 0.25 both)

depict an ugly picture of I.P. environment among the eyes of foreign corporations
belonging to different segments including films and music industry. Moreover, the
just mentioned indicators do not seems to be against the public interest but are
critical to the health of the I.P. environment. An underperformance in the indicators
concerning these issues balks the prospects of creating an environment conducive to
FDI and is harmful to the Indian economy.
 5. The GIPC wishes India to reconsider its existing legislations concerning to the
prerequisites for trademark protection, legal measure to address the unauthorized uses
of trademark and protection of trade secrets. India scored 0.25 out of 1 in indicators
concerning these issues.
6. The reasons cited by the GIPC while giving ZERO in the indicator concerning Barriers to
market access are the issuance of compulsory license and the tough patentability
requirements. Both issues seem to prejudice the interest of large proportions of Indians
who do not belong to the economically fortunate category.
7. GIPC is also unhappy with India for not being a member of various International
Treaties like WIPO Internet Treaties, Singapore Treaty on the Law of Trademarks etc.

Conclusion:
GIPC is reasonable when it shows a strong correlation between the economic status and the
I.P. environment of the country and quotes that the stronger a national IP environment, the
greater the number of IP assets generated and stored in an economy and, in turn, the higher
its levels of IP-based receipts. It is also a fact that most of the countries belonging to the
category of High Income Level (source: World Bank) have also scored high in the GIPC index
while others who scored poor in the GIPC index belong to the Lower Middle Income Level.
Thus, a good IP environment promotes creativity, innovation and encourages entrepreneurship
that helps country fight unemployment, poverty and enhances the quality of life of its citizen.

India has a high rate of software piracy and counterfeiting of physical goods and government
institutions are not being obliged to use only licensed version of proprietary software. Moreover
absence of framework promoting cooperative action against online piracy raises a serious
concern regarding Indias commitment toward creating an environment conducive to
Intellectual Property, testing the confidence of investors and demands immediate remedial
actions from the government.

But while creating I.P. framework, law makers should not ignore the larger public interests and
there is need to strike a right balance between privileges given to the I.P. creators and interest
of the public who consumes the result of the I.P. creator. Social implication of any I.P. law
should be well considered before drafting and enacting. Many indicators like the ones
advocating patent term restoration, regulatory data protection and dilution of Indian
patentability requirement seems to have adverse social implication for Indians not belonging to
economically fortunate section but constituting a large proportion of the Indian population.
Before taking any remedial action to make GIPC happy on above mentioned issues, Indian law
makers need to understand that the primary objective of Indian government is to serve the
interest of Indians.