Intellectual Property Rights

This section studies emerging issues that form a part of and influence the IP landscape in the present world. This section will only present you with an overview of these issues. It is strongly suggested that you read about these in greater detail.

1.7.1 The US ‘301 Report’

The US 301 Report is representative of a larger, growing trend towards the forced universalisation of IP norms. It smacks of the kind of hubris that is normally characteristic of national security rhetoric. In this era when culture and business are strange bedfellows, never has the US discovered cultural diversity to be of such a grave threat to its entrenched economic interests. To that extent, reports like the 301 Report, threats of litigation, political pressure etc. are tools used to leverage other issues with IP laws. The manner in which business works today means that a judgement in India that enhances access to cheap generic medicine in India at the cost of ostensible patents that a multinational company holds is tantamount to a souring ‘business environment’ for US rights holders. In other words, it is the US reaching out to foreign markets because it understands the extent to which it depends on other jurisdictions, consumers and economies for the robustness of its own financial system. The Report is a unique way that the US Government has discovered to deal with its own fragility and dependence in the contemporary.

This brief note will touch upon the following themes:

• Pressure of compliance
• Particular nature of the demands
• Impact on Discourse and Progressive Development

Opacity appears to characterize US engagement with intellectual property rights more than competence. At the cost of involving more stakeholders and therefore reaching more sustainable solutions, the USTR has consistently followed a policy of asymmetricinvolvement of stakeholders, concerted effort to influence academic discourse, application of political pressure under the veil of legality to pressurise smaller countries to ratchet up their IP laws to more restrictive levels. This is a recurrent theme whether through the ACTA, ongoing negotiations on the TPP (IP Chapter) and a raft of bilateral agreements the US has concluded in which the hand of Big Content and Big Pharma is but subtle. The 301 Report, for example, is a way for the US to signal its discontent at those jurisdictions in which its industries will find it difficult to protect their pecuniary interests. Laws that allow generic medicine or enhance access to reading material online do not suit the pharmaceutical and publishing industries that lobby the USG on a continuous basis. This pressure to comply that usually takes on subtle forms at diplomatic setups, has been brazen when it comes to IP compliance. The US demands not just the protection of the rights of all stakeholders on an even playing field but the protection of specific rights of specific stakeholders in a manner that is nothing but coercive. The specificity of the demands came to the forefront in the US response to India’s Novartis judgement that established the “enhanced efficacy” standard for granting of patents. The ideology that the SC is clearly espousing is that the threshold for patents must be high given the virtual monopoly that it grants its holders at the expense of immediate innovation and access that would logically flow from a major discovery. The USG is clearly displeased with the impact the judgement would have on the “patentability of potentially beneficial innovations”. Now, it is clear that the standard of the Supreme Court is not patently at odds with the three step test for a patent: being new, must involve an inventive step and must have an industrial application. Enhanced efficacy has been read into ‘new’ with the Court opining that not every minor change in the product makes it new and deserving of legally protected monopoly. However, such technicalities aside, the specificity of the demand is worthy of attention. The Report is not just an exercise at mapping the IP developments in different nations, an exercise that no doubt all would appreciate given its academic value but is an expression of US reaction at every legal development abroad – one might say sovereignty is at stake here. The raison d’etreof sovereignty is to protect the legal and cultural diversity of nations, to ensure that the inevitable hierarchy of nations does not lead to the universalization of norms. The report is the antithesis of this idea and is deserving of a scathing sovereignty challenge. Finally, the impact that such projects of universalisation has on diversity and development merits attention. The tacit assumption of the 301 Report is the presumed correctness and efficacy of US IP laws. So, the USG is not only harming the diversity abroad but also within its borders by choosing to export and market a particular interpretation of its IP laws. This project, if successful or even just its attempt, harms the field of IP in the long run. The notion of progress in any field of study is hinged on the possibility of inclusion of a wide spectrum of opinions. The 301 Report is the way for the USG to signal displeasure, an oft-used euphemism, at IP developments that don’t suit it. This moulds the progress of IP laws in a singular direction at the cost of the value that diversity brings with it. A consequence of such efforts is the paralysis that we’re witnessing now. Long drawn efforts of the USG to shut out opinions that it doesn’t like has led to an establishment that speaks the same voice and language. When confronted with the issues that the internet, digitization and anonymity threw up, the establishment went into paralysis and displayed its police powers in all its infamous might. The teenagers, musicians and activists became the pirates of the contemporary to face the music – because listening to their side of the story was a lost art.

1.7.2 WTO and Emerging IP Norms

The World Trade Organization has played a seminal role in the process of introduction of intellectual property norms and practices into the multilateral trading system. The reason behind this interaction between trade and intellectual property is that with the maturation of the knowledge economy, ideas have become an important constituent of the trading process. Ideas have become the goods of today and are crucial for the initiation of industry, innovation and sometimes entire economies. One need only look towards Silicon Valley to understand how ideas can create and shape economies and why understanding the structures of trading of ideas is so very critical. Further, even the traditional manufacturing process and the products that are a result of it have seen an infusion of innovation and creativity in their design. This issue can be examines from the other side as well- the protection of intellectual property rights have a significant impact on economies and innovation. Regimes of IPR protection therefore assume great importance in the scheme of trade. Now, the variation of IP norms across the world was a source of concern for the WTO and entrenched business interests as the diversity does not suit profit maximization. Cultural diversity was something to be appreciated as long as it did not come in the way of business. Therefore, in furtherance of the standardization of IP norms, the Uruguay Round was commenced. The goal was to instil clarity in global understanding of IP rules across jurisdictions and to be able to resolve disputes in a predictable and amicable manner. Common international rules were negotiated and the TRIPS Agreement started taking shape. In the course of time, the TRIPS Agreement became one of the foundational agreements of the WTO, forming one of its ‘three pillars’, the other two being trade in goods and trade in services. The two principles of national treatment (Article 3 of GATT, Article 17 of GATS and Article 3 of TRIPS) and most-favoured nation form the foundation of intellectual property negotiation. The engagement of trade norms with IP rules is aimed at reducing barriers to trade, and by extension the trading of ideas. The national treatment principle states that the manner in which governments treat their own citizens must be similar to the way they treat foreigners. This is to ensure that governments do not treat their own citizens more favourably than foreigners thereby denying them the equal opportunity to access markets. The goal of equal access to markets is thwarted the moment governments set up preferences that disadvantage foreign firms. We see this extreme even today in the form of excess taxes on particular nationals in countries that are not particular friendly towards it. Business, in a certain sense, must be blind towards national differences. This prioritization of free trade is reflected in MFN Principle as well – which states that any favour granted to one’s own nationals or to any one country must be extended to all countries that are trading partners in the WTO. These two principles capture the gist of the TRIPS Agreement. Another aspect of this agreement is the process of ensuring that at least minimum levels of IP protection are offered in all countries. The Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works were the two regimes in existence prior to the establishment of the WTO. What the TRIPS Agreement did was to both cover all the areas of IP protection that were precluded by the Paris and Berne Convention and to collate all the norms in one single agreement, thereby making diplomacy on IP norms an easier process. The TRIPS Agreement covers, inter alia, copyright, trademarks, geographical indicators, industrial designs, patents, integrated circuits layout designs, trade secrets, curbing anti-competitive licensing contracts and technology transfer. TRIPS has come under a modicum of sustained criticism because of its overbroad nature. It is at the forefront of emerging IP norms that seek to sacrifice access at the altar of IP protection, without the understanding that there won’t be anything for IP norms to protect if access is not promoted instead of being diminished. Critics condemn the TRIPS in toto as being an agreement that was born out of a genuine fear of US firms that they would lose their competitiveness after the slump of the 1980s. Thus commenced the effort to link IPR and trade spearheaded by Big Pharma, and eventually also by Big Content (music, sound and other copyright-based industries), that resulted in the amendment of Section 301 of the US Trade and Tariff Act. This called for trade sanctions on countries that did not comply with basic minimum norms on IP protection. This carrot-and-stick policy has continued since in the form of tacit and explicit efforts to export US IP norms under the garb of international negotiations and well-drafted euphemisms.