The Financial Express: Is it finally time for a change?

India continues to sit on the sidelines of international intellectual property laws

March 4, 2016
By: David Torstensson

The biggest piece of international news of 2015 arguably was the signing and publication of the Trans-Pacific Partnership (TPP). An ambitious trade deal, the TPP covers close to 40% of world GDP and, while not perfect, sets an important new benchmark in the realm of protection of IP rights.

The TPP agreement brings to mind how much time (21 years!) has actually elapsed since the Uruguay round, when the WTO came into being and the TRIPS agreement set an internationally-binding minimum standard for the protection of IP rights.

It also serves as a reminder of how much the world has changed since the release of the US Chamber’s Global Intellectual Property Center’s first edition of the International IP Index. Launched in 2012, the inaugural edition of the International IP Index covered 11 developed and emerging economies. Out of those 11, India ranked the last. Four editions later and while the IP Index has grown over three-fold, covering 38 economies—and a good number of those economies are racing towards new, 21st-century IP standards in the TPP—India is still ranked at the bottom, ahead of only Venezuela.

In many ways today, 21 years after the coming into force of TRIPS, 11 years after the introduction of TRIPS in India, four years since the first IP Index, India continues to sit on the international IP sidelines.

The Modi government has taken some tentative steps with a new national IPR strategy set to be published at some point in 2016 and positive statements on the need for aligning with international patents standards coming from the prime minister himself. Yet, looking at concrete action, what stands out most from 2015 is that the proposed patent guidelines for Computer Related Inventions—which would have addressed a major area of uncertainty—were suspended at the last minute.

Unfortunately, this inactivity has an economic cost. Beginning last year as part of the IP Index, we began to more actively explore the relationship between the strength of a national IP environment and rates of economic activity, whether general or sector specific. For indicator after indicator —whether it be innovation output as measured by the Global Innovation Index, access to the latest technologies, number of researchers in the workforce or levels of clinical research—India consistently lagged behind both other emerging markets and established high income economies. While there are many potential factors explaining India’s poor performance, the one core common denominator is the challenging IP environment.

The cost of this can be quantified. For example, India has great potential in becoming a major player in the global pharmaceutical arena, not only on the generic front but also in the biopharmaceutical innovation process. Yet, the current rates of clinical trials are well behind those of much smaller and less developed markets. Our research suggests that if India improved its clinical research policy environment to roughly the median level of international best practices (including IP reform), the number of new clinical trials per year could increase to above 800 and add over $600 million in direct monetary transfers and indirect economic gains, more than 50% of which would be directed to hospitals, related services and patients.

A few years ago, in these very same pages, my colleague Professor Meir Pugatch posed the question of whether or not it was time to question the Indian model on IP rights. With the policy environment on IP still stuck in neutral, I will reiterate this query: Isn’t it time India should consider using IPRs in order to leverage its huge untapped potential and take its rightful place as a global leader in innovation?

The author is a partner at Pugatch Consilium. He is also part of the team that took part in the construction and authorship of the US Chamber’s International IP Index.