India needs to push for a new deal: 

India needs to push for a new deal: 

Context

• Global trade and intellectual property are at a crossroads. India must reopen the discussion on balancing the global intellectual property system with development

What are the rising problems with the trade deal?

• With The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) coming in 1995, the promotion of private sector was excessive.
• Since then promoted excessive protection of private investor interests through bilateral trade agreements, often at the expense of wider public interests were done.
• Corporate libertarians, riding high on increased market power, continue to lobby their governments for absolute protection of intellectual property (IP) rights of corporations.

What are the US concerns?

• For the U.S., trade agreements are a prime vehicle to supplant its strong domestic standards of IP protection in partner countries, in a bid to ensure the same level of privileges for its companies abroad.
• Over the past 20 years, the American strategy has been a neat one: to pursue bilateral agreements with individual countries one by one to ensure stronger IP protection across markets, by sidestepping the multilateral regime.

What is happening in the globalized world?

• But in an inter-connected and highly globalized world, what goes around comes around quite fast and often with drastic consequences for all. I
• While patent protection is getting stronger in all sectors in a large number of countries, the conditions for its grant are becoming greatly relaxed.
• Not only do such lax patenting requirements allow companies to claim patents more broadly or consecutively, with little show of original effort as in the case of evergreening — but also patents can be claimed on all possible inventions (and discoveries) that are of relevance to the present, and even to the future.
• A large number of countries have already foregone many degrees of policy freedom by signing up to ‘TRIPS-Plus’ standards of protection. This, in conjunction with other trade measures, is disintegrating existing markets and rigging established rules of the game.
• At the global level, these sectors are stratified, with profits neatly split up between large corporations and new kinds of non-innovator firms that simply amass patents speculatively in upcoming, promising technologies for spurious returns.
• The non-innovator companies are the patriciates of the system: when they hit the technology jackpot, they control the market and have the power to shift wealth and control competition.

What is there for India in this according to the report?

• For India, the fate of its pharmaceutical and software sectors swings in the balance, and guaranteeing fair and unfettered competition will be critical.
• The United Nations Conference on Trade and Development (UNCTAD)’s recent Trade and Development Report calls for stronger measures to protect domestic sectors against the undue domination of large companies, particularly in high-profit sectors such as pharmaceuticals, media and information and communications technology (ICT).
• Warning against trade deals that seek to protect the status quo, the report identifies patents as an instrument of unfair market power across markets.
• The report uses data for U.S. multinational companies (MNCs) and their foreign affiliates in India to show that patent reforms have led to significant increases in the rates of return to affiliates of American companies by enabling monopoly profits when compared to publicly listed and locally headquartered companies, which are increasingly being left behind.
• India’s high-technology sectors are already taking a beating because they operate in a volatile global environment.
• Supporting IP standards that simply follow a ‘winner takes all’ ideology without emphasis on technological advancement and competitive markets will be a regrettable mistake.

What India needs right now?

• A clear and tough stance on intellectual property both in domestic policy and at the multilateral level.
• At home, support for innovation has to be accompanied with instruments that guard against the misuse of market power, coercive bargaining and aggressive merger and acquisition strategies if local firms should survive and flourish.
• There are ongoing attempts by big business to push for new rules in areas such as e-commerce to slice up profit-making opportunities of the future.
• India need return to old-fashioned pragmatism that clearly shows the West that India recognizes the fallacy of the current IP system and leads the way to broker a global new deal.
• This new deal should not only call for a return to business in the WTO by tackling the forgotten issues of the Doha Round but also firmly reopen the discussion on balancing the global IP system with development.