WASHINGTON — The U.S. said Tuesday it will begin an “out-of-cycle” review of India’s efforts to protect and enforce intellectual property rights, following the release of several annual U.S. reports citing India’s continued weak legal framework and enforcement mechanisms.
In April, the U.S. Trade Representative’s office cited several areas of concern in its “Special 301 Report” related to India’s IPR policies, including delays in its judicial reviews of trademark registrations and a proliferation of counterfeit product exports.
India was listed on the “Priority Watch List” with 10 other countries, including China, Argentina, Russia and Thailand, in the 2014 report that assessed steps the countries had taken in fiscal year 2013. India has been listed in the report on IPR protection every year since it was published in 1989.
While U.S. officials said they found “promising” India’s recent agreement to establish an annual high-level Intellectual Property Working Group, concerns remain about persistent and pervasive problems in the area.
“In many areas, however, IP protection and enforcement challenges are growing, and there are serious questions regarding the future of the innovation climate in India across multiple sectors and disciplines,” USTR said in the April report. Officials also said several stakeholders are calling for the “strongest censure of India’s IP environment” available under the Special 301 report.
Among the problems outlined were “significant delays” in trademark registrations in India that have led to a reported backlog of 160,000 cases, representing a “significant challenge for companies trying to invest and build brands in India,” the report said. “These delays undermine enforcement mechanisms and their ability to discourage infringing conduct.”
“Additionally, the production, sale, distribution, import and export of counterfeit goods in India remains very troubling,” USTR said.
A study analyzing seven key industry sectors, including automotive parts, personal goods, computer hardware and mobile phones, found that counterfeiting and smuggling in India “caused average sales losses to rights holders of 21.7 percent, or approximately $11.9 billion in 2012,” USTR said. The report put economic losses to the Indian government from the illicit activity at $4.26 billion.
U.S. seizures of counterfeit products from India are relatively small compared with those from China. For fiscal 2013, the U.S. seized $20.6 million of counterfeit products from India. Fake pharmaceutical products accounted for the majority of the seizures at $18.1 million, while confiscations of apparel were $383,000. By comparison, the U.S. seized $1.2 billion in counterfeit products from China. Seizures of bogus handbags and watches from China totaled $547 million, while confiscations of apparel totaled $73 million.