Among the major world economies, India is one of the most challenging with respect to the protection and enforcement of intellectual property (IP) rights. Despite the Indian government’s many positive statements and initiatives, developments have been few and the pace of reform has not matched repeated high-level calls to foster innovation and promote creativity. India has yet to take meaningful steps to address longstanding IP issues faced by innovation-driven industries. In 2022, India remains on the Priority Watch List in USTR’s Special 301 report.
Developments Over the Last Five Years
India announced its first National IPR policy in 2016. Today, the portfolios of Patents, Designs, Trademarks, Copyright, Geographical Indications, and Semiconductor Integrated Circuits Layout Design all fall under the Department for Promotion of Industry and Internal Trade (DPIIT). Under DPIIT, the Cell for IPR Promotion and Management is tasked with implementing India’s National IPR Policy. It spearheads the Indian government’s efforts to streamline IP processes, increase IP awareness, promote commercialization, and enhance enforcement.
Over the past five years, the Indian government has taken positive steps to strengthen its IPR regime, such as efforts to modernize its IP offices; increase manpower; use IT and technology in e-filing of applications; deliver certificates of grant and registration of patents and trademarks in a digital format; reduce the number of trademarks forms; use video conferencing for hearing of IP applications; create expedited examination procedures; and spread awareness on IP issues.
DPIIT, in association with the Federation of Indian Chambers of Commerce and Industry, launched an IPR enforcement toolkit to aid police with handling IP crimes, in particular counterfeiting and piracy. The Maharashtra Cyber Digital Crime Unit was established in August 2017 as a public-private partnership to enable industry to work directly with state police to combat digital piracy. The Unit serves as a potential model for digital enforcement that other Indian states can emulate and replicate.
The Ministry of Education’s Innovation Cell has also taken steps to foster innovation and promote IP literacy and awareness in classrooms across the country.
U.S. Government Engagement
Engagement with India on IPR continues, primarily through the U.S.-India Trade Policy Forum’s Working Group on Intellectual Property, which restarted in June 2021 after a gap of nearly three years. Under the Forum, working-level engagements between the United States and India have also been positive and focus on helping India develop a more transparent, predictable, and reliable enforcement environment. Further, the United States and India continue to actively engage across various platforms, such as the U.S.-India IP Dialogue, and routinely through bilateral interactions on specific IP issues. In addition, the United States maintains positive working relationships with Indian customs, police and judiciary officials, as well as with industry representatives to discuss ways to strengthen India’s important enforcement ecosystem.
To further bilateral engagement on intellectual property matters, in December 2020, the United States Patent and Trademark Office and DPIIT signed a Memorandum of Understanding relating to IP technical cooperation mechanisms and the promotion of IP, which is guided by a biennial work plan.
Legislative Climate
While India has laws covering almost all types of intellectual property rights and enforcement procedures, the legislative process is often lengthy and uncertain, and the same issues can remain pending for many years. This can create uncertainty for industries and complicate their strategic IP enforcement decisions.
The Commercial Courts Act, enacted in 2015 and amended in 2018, was established to help reduce delays and increase expertise in judicial IP matters. However, to date only a limited number of courts have benefited under the Act. Rights holders report jurisdictional challenges have reduced the effectiveness of the commercial courts, and inadequate resources for staffing and training continue.
Pharmaceutical and agrochemical products can be patented in India. Plant varieties are protected by the Protection of Plant Varieties and Farmers’ Rights Act, 2001. However, Indian law does not protect against unfair commercial use, nor against the unauthorized disclosure of undisclosed test or other data submitted to the Indian government during the application for market approval of pharmaceutical or agrochemical products.
The Designs Act allows for the registration of industrial designs. The current Designs Rules detail classification of designs, largely to conform to international standards, and are intended to address the proliferation of design-related activities. India’s Semiconductor Integrated Circuits Layout Design Act is based on standards developed by the World Intellectual Property Organization; however, the law remains inactive due to a lack of implementing procedures as well as lack of interest in filings.
A June 2018 amendment to the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, removed patents from the scope of customs protection. Accordingly, the new customs recordation system permits owners of trademarks, designs, copyrights, and geographical indications to record their IPR with Indian customs authorities and seek enforcement actions for any related counterfeit activity. Customs officers have ex-officio authority to suspend the clearance of suspect imported goods they believe are counterfeits and subject them to examination, seizure, and destruction, though rights holders may have to bear these costs. Also, the goods may subsequently be released if rights holders do not comply with the recordal requirements.
Protection and enforcement of trade secrets is challenging as there are no civil or criminal laws in India that specifically address their protection. While India relies on contract law to provide some trade secret protection, this approach is effective only in situations in which a trade secret owner and a party accused of misappropriation have a contractual relationship. Criminal penalties are not expressly available for trade secret misappropriation in India and civil remedies are reportedly difficult to obtain and often do not have a deterring effect.
India does not provide data protection for the registration of agricultural products. Despite previous attempts to introduce data protection provisions into the Pesticides Management Bill, the pending bill, introduced in 2020, does not provide for data protection for the registration of new pesticides.
Released in June 2021, the proposed Cinematograph (Amendment) Bill contains provisions criminalizing illicit camcording and proposes to enhance penalties against piracy. Unfortunately, the draft bill also creates new concerns for right holders by proposing to apply a broad set of exceptions from the Copyright Act to anti-camcording activities.
In June 2021, India’s Department Related Parliamentary Standing Committee on Commerce presented its 161st Review of the Intellectual Property Rights Regime in India Report. The Report emphasizes that the IPR regime should be in compliance with international agreements, rules and norms, and be compatible with those of other nations and foreign entities. While many of the recommendations in the report, such as those relating to trade secrets protection, IP enforcement, and dedicated IP benches at the High Courts, are welcomed, some recommendations, such as those relating to compulsory licenses and statutory licensing for online broadcasting, raise serious concerns and are regarded as problematic for IP rights holders.
In August 2021, the Ministry of Health and Family Welfare launched efforts to frame the new Drugs, Cosmetics, and Medical Devices law to replace the existing Drugs and Cosmetics Act, 1940, by setting up an eight-member expert committee headed by the Drugs Controller General of India (DCGI).
On data protection, a Joint Parliamentary committee released recommendations in December 2021 for a new bill entitled the Data Protection Bill, 2021, that could have undermined important IP protections and stifled innovation, particularly in view of India’s outdated and insufficient legal framework for protecting trade secrets. The bill was scrapped in August 2022, though a future bill is set to be introduced within a new legal framework covering data privacy in India.
In December 2021, the Indian government referred the Biological Diversity (Amendment) Bill, 2021 to a Joint Parliamentary Committee for review. The bill seeks to facilitate fast-tracking research and the patent application process; the transfer of research results while utilizing biological resources available in India; decriminalization of certain provisions; and bringing more foreign investments in the chain of biological resources, including research, patent, and commercial utilization.
Regulatory Climate and Hurdles
Despite several positive developments, there are also many regulatory hurdles and challenges that affect the commercialization of IP in India. For instance, the interpretation and application of patent law can be unpredictable and inconsistent, particularly in important areas such as determining the scope of patentable subject matter, pre-grant opposition proceedings, and provisions governing the granting of compulsory licenses.
In 2016 and 2017, the Patents Rules and the Trademarks Rules were revised, adopting strict timelines to dispose of cases, streamline examinations, and reduce certain filing fees to incentivize start-up activity. In 2019, the Patents (Amendment) Rules further expanded the categories of applicants eligible for expedited examination of their patent applications. The 2017 examination guidelines for Computer Related Inventions removed all examples of what can and cannot be patentable, deferring to the patent examiner’s discretion and raising concerns about the consistency of patentability decisions. In September 2021, the Indian government notified the Patents (Amendment) Rules, 2021, extending the benefit of fee reduction for patent application filings to all recognized educational institutions, including foreign institutions.
India’s Copyright (Amendment) Rules, 2021, became effective in March 2021. These rules introduced a host of changes regarding copyright societies, including their registration, management, and functions.
Pharmaceutical and Medical Devices
The lack of coordination between DPIIT and the Central Drugs Standard Control Organization through either patent linkages or an effective notification system invites abusive infringing activities, which compromises the ability of innovative industries to effectively commercialize and enforce their IPR in India. Liberal price controls, coupled with the potential abusive use of procedures such as pre-grant and post-grant opposition proceedings, further complicate an effective IPR regime for the pharmaceutical and medical device industries.
In April 2017, the Ministry of Health and Family Welfare removed the requirement for companies to inform whether a new drug is under patent at the time of filing for a manufacturing license. This is viewed as a regressive step and goes against India’s National IPR Policy, which calls for better central and state coordination on IP issues. India still lacks a system for notifying interested parties of marketing approvals for follow-on pharmaceuticals, which would allow for the early resolution of potential patent disputes.
The threat of price controls for patented pharmaceuticals continues to concern rightsholders. The National Pharmaceutical Pricing Authority previously made efforts to invoke emergency provisions to issue price control orders to fix prices for a number of non-scheduled drugs, including patented drugs. The 2015 National List of Essential Medicines included several patented drugs. The List is currently under revision again, and the threat of patented drugs being added to the list remains a significant concern. There are also strong concerns over the unpredictable and opaque application and implementation of the Trade Margin Rationalization formula for price monitoring of the non-scheduled market, including for patented drugs. In January 2019, the Department of Pharmaceuticals amended its 2013 Drugs (Prices Control) Order to exempt manufacturers producing a new drug patented in India from price controls for five years from commencement of their commercial marketing of the drug in India. While this is viewed as a positive development, serious concerns remain over its implementation or potential dilution. Industry continues to seek clarity from Department of Pharmaceuticals on how the amendment is to be implemented.
In the pharmaceutical sector, the absence of clear guidance in implementing Section 3(d) of the Indian Patents Act has restricted patent-eligible subject matter in a way that fails to incentivize innovation by hindering the development of improvements to benefit Indian patients.
In December 2020, the Department of Pharmaceuticals issued guidelines for implementation of the provisions of the 2017 Public Procurement Order, specifying a minimum of 80 percent local component requirement for a Class I local supplier and 50 percent to qualify as a Class II local supplier. The guidelines effectively disqualify non-local bidders from Indian government tenders.
In October 2021, the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers sought comments on the Draft Policy to “Catalyze Research & Development and Innovation in the Pharma-MedTech Sector in India.” The Draft Policy outlines the adoption of linkages between industry and academia (like that of the United States’ Bayh-Dole Act) and IP offices or technology transfer offices in academic institutions, industries, and incubation centers.
Technology, Brand, and Intellectual Property Licensing
In 2018, the Indian government formed an inter-ministerial group to investigate reinstating royalty caps for all technology collaborations and brand licensing, limiting the amount of foreign exchange that can leave the country. If implemented, such caps would negatively affect all sectors of the economy in which a company licenses its brand name or enters a technical collaboration. Prior to 2009, India had a similar provision, but it was abandoned in favor of attracting higher levels of foreign investment.
India generally has adequate copyright laws, barring some exceptions. A July 2021 Parliamentary Committee report recommended an amendment to the Copyright Act to extend statutory licensing to include internet and digital broadcasters for certain works. DPIIT has taken this recommendation under consideration, which has deeply concerned companies in the music, entertainment, and creative industries. Amending the Copyright Act to permit statutory licensing for interactive transmissions would be inconsistent with India’s obligations under relevant international treaties and would have severe implications for rights holders that make their content available online. The lack of predictability around this issue, along with the expansive granting of licenses under Chapter VI of the Indian Copyright Act and overly broad exceptions for certain uses, have raised concerns about the strength of copyright protection in India and complicated the functioning of the market for music licensing. India’s commitment at the United States–India Trade Policy Forum in November 2021 to comply with the World Intellectual Property Organization Internet Treaties was a positive step, though respective amendments to bring India’s Copyright Act into alignment with international best practices has not yet been made.
The Indian Patents Rules require Form 27 to be filed annually by patentees and licensees on the details of their commercial activities for all their patents in force in India. While the annual requirement was initially created to ensure that patentees are working their inventions in India, the form may be hindering innovation. In October 2020, revisions to Form 27 improved the situation, though it still places significant risks and undue burden on rights holders and may compromise their confidential business information and strategies. In addition, failing to comply with Form 27 requirements can create grounds for seeking a compulsory license and could lead to loss of patent, substantial penalties, and imprisonment.
Enforcement Climate
The Intellectual Property Appellate Board (IPAB) was abolished in 2021, transferring jurisdiction to adjudicate appeals over patents, trademarks, copyrights, and other IPR matters to the High Courts. India’s decision to abolish the IPAB and redirect matters to the courts has created uncertainty around adjudication of IP cases and the setting of copyright royalty rates. In July 2021, the Delhi High Court created a dedicated Intellectual Property Division (IPD) to hear IPR matters, including those previously before the IPAB. The Delhi High Court recently nominated three Judges to exclusively function as the IPD, and in February 2022 the Court notified its comprehensive rules for the IPD. At the same time, the Court notified its rules governing patent suits. The April 2022 Parliamentary Committee Report recommended that the Indian government encourage High Courts across the country to follow suit and establish their own IPDs.
In 2021, India continued to take steps against websites with pirated content. Despite positive steps taken in online copyright enforcements, such as “dynamic injunctions” for repeat offenders, copyright holders continue to report high levels of piracy, particularly online and through commercial broadcasts. This includes unauthorized file sharing of videogames, signal theft by cable operators, commercial scale photocopying, unauthorized reprints of academic books, and circumvention of Technology Protection Measures.
While there has been some progress, weak enforcement of IP by the courts and police, a lack of familiarity with investigative techniques, and the absence of a centralized IP enforcement agency, combined with failure to coordinate actions on both the national and state level, threaten to undercut progress.
See the India IPR Snapshot for more information.
In any foreign market, U.S. companies should consider several general principles for effective protection of their IP. Please see Protecting Intellectual Property and visit Stopfakes.gov for additional resources.
See the 2022 Investment Climate Statement, which includes information on the protection and enforcement of IPR in India.
For more information, contact U.S. Intellectual Property Counselor for South Asia John Cabeca at the U.S. Embassy in New Delhi or the International Trade Administration’s Office of Intellectual Property Rights Director Stevan Mitchell.