The Office of the United States Trade Representative (USTR) recently released Annual Special 301 report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of intellectual property rights. As part of this exercise, USTR reviewed more than one hundred trading partners for this year’s Special 301 Report and placed thirty-two (32) of them on the Priority Watch List or Watch List.

While a few countries have moved out of the Priority Watch list and a few others moved from the priority watch list to watch list, India remains on the US Priority Watch list along with Argentina, Chile, China, Indonesia, Russia, Saudi Arabia, Ukraine and Venezuela and continues to be one of the world’s most challenging economies when it comes to protection and enforcement of IP.

One of the reasons for India being on the watch list is the seemingly inconsistent progress on IP protection and enforcement fronts. The report notes while India’s enforcement of IP in the online sphere has gradually improved and there have been consequential improvements to promote IP protection and enforcement in some areas in the past years, many principal areas are in desperate need of improvement.

Some of the key struggling areas for India’s IP laws and policies which have been highlighted by USTR and stakeholders are:

Threat of compulsory licenses, narrow patentability criteria, patent revocations, lack of presumption of patent validity under the India Patents Act faced by innovative companies across sectors.

Costly and time consuming pre and post grant patent oppositions

Vagueness in the interpretation of the Indian Patent Act

Long waiting period for receiving patent approval and heavy reporting requirements

Extremely high customs duties directed to IP-intensive products such as medical devices, pharmaceuticals, Information and Communications Technology (ICT) products, solar energy equipment, and capital goods.

India continues to be one of the top five source economies for fake goods which highlights the grave nature of counterfeiting and ineffective level of enforcement.

Delays in obtaining trademark protection and lack of quality in examination.

Trademark counterfeiting

Copyright piracy issues and copyright policies that fail to incentivize the creation and commercialization of content, and an outdated and insufficient trade secrets legal framework.

Restrictions on the transparency of information provided on state-issued pharmaceutical manufacturing licenses, application of restrictive patentability criteria to reject pharmaceutical patents, and not having established an effective system for protection against the unfair commercial use, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceuticals and certain agricultural chemical products.

The Special 301 Report has maintained that the United States will continue to engage with India on IP matters and India will be subject of intense bilateral engagement during the coming year.

Interestingly, the compulsory license over Covid vaccines and medicines has received huge press in India since last year as a solution to make the vaccines and medicines related to pandemic being more widely available.