As the countdown for President Donald Trump’s India visit begins, there has been much speculation about the nature and extent of the trade deal that could or could not be agreed upon between the two countries.
Irrespective of all other details, an issue that is certainly on the table is intellectual property (IP). India will need to tread with caution in the light of demands on that front not only in pharma, but also in the area of agriculture.
There are five good reasons why.
1. History of the issue
Lest it be forgotten, the US government raised a dispute at the World Trade Organisation’s dispute settlement body (DSB) soon after the WTO was set up. On July 2, 1996, the US requested consultations with India under the WTO concerning the alleged absence of patent protection for not only pharmaceutical but also agricultural chemical products in India, which it claimed were in violation of the provisions (Articles 27, 70.8 and 70.9) of WTO’s TRIPS Agreement. India lost that case and the amendments to the country’s Patent Act of 1970 subsequently followed.
But what is critical to retain and respect in the domestic patent law vis-a-vis agriculture is Section 3(j) that excludes from patentability “plants and animals in whole or in any part thereof other than microorganisms but including seeds, varieties, and species, and essentially biological processes for production or propagation of plants and animals”. US seed multinational corporations (MNCs) want nothing less than patents on seeds.
2. Special 301 report
The Office of the United States Trade Representative (USTR) annually prepares a report from a review of the state of IP protection and enforcement in US trading partners around the world. This report has been made every year since 1989 under its Trade Act of 1974.
In the report, it puts countries into different categories depending on the level of IP standards and how those are enforced. This exercise by USTR is to identify trade barriers to US companies from what it sees as inadequacies to IP protection in other countries. Ever since 1989, India has repeatedly been placed in either the ‘Priority Foreign Country’ category or listed on the ‘Priority Watch List’ for not having the IP levels that US wants. Therefore, an IP agreement can be anticipated. Any such agreement can only be about how to discipline India on IP.
3. Bilateral pressure
Even outside of any bilateral FTAs or BITs, the US always insists on IP in its trade and economic diplomacy in its bilateral dealings. Even before the arrival of the US entourage in India, a memorandum of understanding (MoU) on IP between the two sides has already been approved. The MoU covers the entire range of IP. It is not publicly known what it actually lays down with respect to agriculture. But the MoU was preceded by the Department of Promotion of Industry and Internal Trade (DPIIT) of the Ministry of Commerce and Industry (MoCI) discussing a review of India’s IP laws. It is the same department (then called DIPP) that in 2016 came out with the National IPR Policy, 2016 to appease the US side.
The policy seeks to bring more farmers into the IP system as well. It expressly states that it would reach out to the less visible and silent IP generators and holders, especially in the rural and remote areas, through campaigns tailored to their needs and concerns. These would include small businesses, farmers/plant variety users, holders of traditional knowledge, traditional cultural expressions and folklore, designers and artisans.
Thus far, IP systems (such as in the US) with an instrumental approach to grant monetary incentives to creators/inventors have proved incapable of granting remunerative rewards in equal measure to those socially and economically less privileged. India will have to seriously introspect if its IP law in agriculture – Protection of Plant Varieties and Farmers’ Rights (PPV&FR) Act, 2001, has resulted in either more economic returns to farmers or led to social welfare in the seed sector.
The farmers’ varieties granted plant breeder rights under this law are yet to be mainstreamed. Also, cases of benefit sharing arrangements with those using farmers’ varieties as source material for developing commercial varieties are yet to work out. So any move to tighten the IP system will only widen the gap. The implementation of the law is in favour of corporate plant breeders who hold registrations for new plant varieties. This can put restrictions of use on both farmers and researchers.
4. China-US trade deal
China and the US signed a ‘Phase One’ trade agreement on January 15, 2020. The very first chapter of the economic and trade agreement is on intellectual property.
Under the agreement, China has agreed to crack down on business practices that the Trump administration has criticised, which include those related to IP. It has also committed to ensure additional purchases of US agriculture products by $32 billion over two years. Such trade deals is what Trump needs back home in election year. Any trade deal in the future with India will surely have a full-fledged IP chapter.
5. Legal cases by US MNCs
It is essential that India develops its negotiating position on IP in agriculture based on its own experience with US MNCs. Three legal cases in Indian courts are important to keep in mind. The US Monsanto Inc. has sued domestic seed companies in India on the issue of payment of technology user fees over IP-protected biotechnology in cottonseeds. Monsanto even sued the Competition Commission of India (CCI) at the Delhi high court against its investigation orders. CCI had held that there is prima facie case of contravention of Sections 3(4) & 4 (abuse of dominant position) of the Competition Act by the company.
Another wholly-owned subsidiary of a US MNC – PepsiCo India Holdings Pvt Ltd, actually filed cases through 2018-2019 against several farmers in Gujarat for alleged violation of its IP rights over a potato variety. This is despite a clear legal provision [Section 39(1)(iv)]on farmers’ rights in India’s PPV&FR Act that guarantees farmers’ inherent seed freedoms, even if a plant variety has been granted an IPR.
The fight against US-styled IP is not only in pharma, but also on the farm front.
Shalini Bhutani is a legal researcher and policy analyst based in Delhi; she tracks how trade rules interface with agriculture and biodiversity in the Asian region.