India’s growing population, at 1.3 billion citizens now, represents the second-largest consumer market in the world, and may soon be the largest. Its productive capacity is also growing. In nominal terms, India’s nearly $2 trillion GDP makes it the 10th-largest global economy—third in terms of purchasing power—and it is likely to enjoy respectable 5.5% and 6% growth, in 2014 and 2015, respectively, as per estimates by the Asian Development Bank. India has already proven its competitive advantages in cutting-edge, high-value technology and services industries that are shaping 21st century economies.
Notwithstanding this tremendous allure, global corporations have found it difficult to do business in India in recent years. Interventionist government policies created a sense—in some cases, a reality—that the rules were arbitrary and subject to sudden, even retroactive, change. This was particularly the case for industries that rely on intellectual property rights to finance the capital-intensive research and development that is necessary for the introduction of life-changing new products such as medicines and health care technology. Even the threat of compulsory licensing and patent revocations was sufficient to create the legal uncertainty that is anathema to investment in innovation. One widely-cited report, the International Intellectual Property Index researched by the Israel-based Pugatch Consilium and published by the US Chamber of Commerce, found India ranked last among 25 key global markets on the regulatory and governance factors most closely watched by global innovative industries. Accordingly, the inauguration of Indian Prime Minister Narendra Modi this past May was welcomed by the international business community as a critical opportunity to refresh a relationship with the Indian government that had reached a stalemate.
Since then, anxious investors have awaited a signal that the new government was serious about its rhetoric of a newly competitive Indian business climate. With Tuesday’s announcement by commerce and industry minister Nirmala Sitharaman of a new Indian government policy to promote intellectual property, the waiting could be over. “India needs to aggressively tell the world that we believe in intellectual property rights,” said Amitabh Kant, secretary of the commerce and industry ministry, according to press reports. Coming just weeks ahead of Prime Minister Modi’s much-anticipated visit to the United States, the move could only be viewed by US investors as a sign that if they “make in India” they will indeed be made welcome.
As pleased as international business may be if these policy proposals are carried out, the real audience for this message is in India as it can represent the fulfillment of a promise that this government is serious about putting India on a path of sustained growth and development. Because the real benefit of intellectual property reform is not to outside investors, it is to India and its own innovators, businesses, and consumers who deserve to enjoy access not only to the world’s innovations, but especially to the home-grown variety.
An intellectual property policy that puts India among the world’s standard-setters for innovation would include the following elements:
1. A principled commitment to the legal rights of patent, copyright, and trademark rights holders, as well as legal protection of trade secrets;
2. Ratification and implementation of key international intellectual property treaties, such as the Patent Law Treaty and other World Intellectual Property Organization (WIPO) treaties, the Berne Convention, and the Singapore Treaty on the Law of Trademarks;
3. Refutation of compulsory licensing (CL) as a commercial tool, and a policy of rejecting CLs except in emergency situations as defined by the World Trade Organizations Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);
4. Patentability requirements based solely on the TRIPS criteria of novelty, inventive step, and industrial applicability;
5. And streamlining of IP-related bureaucracies to permit the efficient registration of patents, copyrights, and trademarks, and the enforcement of the same.
Countries that earn a reputation for promoting and protecting the creation of intellectual capital reap important domestic benefits: They incentivise the substantial R&D investments necessary for the location of capital-intensive industries and the jobs they create; they foster a legal and financial infrastructure that enables the successful commercialisation of new products by small-scale innovators; and, they ensure their citizens the earliest possible access to the newest technologies.
Not all innovators are created equal. Culture and environment help shape the ideas and thought processes that lead to new products. Accordingly, the creative capacity of India, once fully unleashed, may lead Indians to develop innovations yet undreamed of by their American, European, or Chinese counterparts. From a self-described “consumer” of intellectual property, India could become the pathfinder for new avenues of global innovation.
It begins with the confidence that India and Indians can compete and succeed in the global economy. If the Modi administration is serious about creating an enhanced environment for intellectual property and it appears to have that belief—there is a clear indication that the Indian moment is here. If so, the world’s innovative industries are ready to help make it happen.
Notwithstanding this tremendous allure, global corporations have found it difficult to do business in India in recent years. Interventionist government policies created a sense—in some cases, a reality—that the rules were arbitrary and subject to sudden, even retroactive, change. This was particularly the case for industries that rely on intellectual property rights to finance the capital-intensive research and development that is necessary for the introduction of life-changing new products such as medicines and health care technology. Even the threat of compulsory licensing and patent revocations was sufficient to create the legal uncertainty that is anathema to investment in innovation. One widely-cited report, the International Intellectual Property Index researched by the Israel-based Pugatch Consilium and published by the US Chamber of Commerce, found India ranked last among 25 key global markets on the regulatory and governance factors most closely watched by global innovative industries. Accordingly, the inauguration of Indian Prime Minister Narendra Modi this past May was welcomed by the international business community as a critical opportunity to refresh a relationship with the Indian government that had reached a stalemate.
Since then, anxious investors have awaited a signal that the new government was serious about its rhetoric of a newly competitive Indian business climate. With Tuesday’s announcement by commerce and industry minister Nirmala Sitharaman of a new Indian government policy to promote intellectual property, the waiting could be over. “India needs to aggressively tell the world that we believe in intellectual property rights,” said Amitabh Kant, secretary of the commerce and industry ministry, according to press reports. Coming just weeks ahead of Prime Minister Modi’s much-anticipated visit to the United States, the move could only be viewed by US investors as a sign that if they “make in India” they will indeed be made welcome.
As pleased as international business may be if these policy proposals are carried out, the real audience for this message is in India as it can represent the fulfillment of a promise that this government is serious about putting India on a path of sustained growth and development. Because the real benefit of intellectual property reform is not to outside investors, it is to India and its own innovators, businesses, and consumers who deserve to enjoy access not only to the world’s innovations, but especially to the home-grown variety.
An intellectual property policy that puts India among the world’s standard-setters for innovation would include the following elements:
1. A principled commitment to the legal rights of patent, copyright, and trademark rights holders, as well as legal protection of trade secrets;
2. Ratification and implementation of key international intellectual property treaties, such as the Patent Law Treaty and other World Intellectual Property Organization (WIPO) treaties, the Berne Convention, and the Singapore Treaty on the Law of Trademarks;
3. Refutation of compulsory licensing (CL) as a commercial tool, and a policy of rejecting CLs except in emergency situations as defined by the World Trade Organizations Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);
4. Patentability requirements based solely on the TRIPS criteria of novelty, inventive step, and industrial applicability;
5. And streamlining of IP-related bureaucracies to permit the efficient registration of patents, copyrights, and trademarks, and the enforcement of the same.
Countries that earn a reputation for promoting and protecting the creation of intellectual capital reap important domestic benefits: They incentivise the substantial R&D investments necessary for the location of capital-intensive industries and the jobs they create; they foster a legal and financial infrastructure that enables the successful commercialisation of new products by small-scale innovators; and, they ensure their citizens the earliest possible access to the newest technologies.
Not all innovators are created equal. Culture and environment help shape the ideas and thought processes that lead to new products. Accordingly, the creative capacity of India, once fully unleashed, may lead Indians to develop innovations yet undreamed of by their American, European, or Chinese counterparts. From a self-described “consumer” of intellectual property, India could become the pathfinder for new avenues of global innovation.
It begins with the confidence that India and Indians can compete and succeed in the global economy. If the Modi administration is serious about creating an enhanced environment for intellectual property and it appears to have that belief—there is a clear indication that the Indian moment is here. If so, the world’s innovative industries are ready to help make it happen.
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