India needs to apply same rules as the West to protect IPR in innovation

Written by Kirtika Suneja | Updated: Apr 5 2014, 11:16am hrs
With India battling it out with the US on the contentious issue of intellectual property rights (IPR), Dr Robert D Shapiro, the chairman of Sonecon, LLC, a private firm that advises U.S. and foreign businesses and governments says that India has chosen the traditional way when it comes to innovation and protecting its domestic industry. Shapiro, who has advised former US President Bill Clinton, former US Vice-President Al Gore and former British Prime Minister Tony Blair among others, is on his maiden visit to India and tells Kirtika Suneja in an interview that it may be the countrys tradition different from the West that makes its IPR regime restrictive. Excerpts:

India's IPR regime is touted to be restrictive and not in compliance with the TRIPS agreement by the US, a charge that the Indian government and industry strongly refute. The contentious issues are mainly the tenability of the Section 3(d) of India's Patent Act, the country's reported plans to issue compulsory licences, side-stepping patents etc. What is your take on this

India comes from a different tradition from the West when it comes to patents. From a time when Western patents were not recognised, India has come a long way. There is no debate that compulsory licences are permissible (under TRIPS) but they should be given under suitable conditions. There is a strong relation between foreign investment flows and the strength of IPRs in a country.

India has eased foreign direct investment (FDI) norms for many sectors...

FDI is a primary driver for modernisation in developing countries as it introduces new technologies and has extensive spillover effects. As a share of GDP, India gets FDI at a level far below that of China, Brazil and South East Asian countries. This is because India had put restrictions on FDI. This is the reason that many MNCs do not want to come to India because their IPRs will not be respected here. In fact, US companies in many industries are unwilling to invest in India.

So, according to you, what can India learn from the US when it comes to IPRs

Major developments come from effective application of innovation and that is the correct economic policy. India is choosing a development route which is much like the US, Japan and Europe- the traditional route which protects own large domestic companies. Im not criticising the IPR regime of India but when it comes to business, if you give compulsory licence for a medicine, then the patent owner will likely rethink on launching its next invention in India.

Where does innovation stand in the entire scheme of things

The relationship between innovation and IPRs is well-established in modern economics. India needs to apply the same rules to protect its IPR in innovation as the West does. Innovation is nothing but new combinations of labour and capital. MNCs generally protect their returns on their new technologies and other innovations by locating them, through their FDI, in countries which respect their IP rights.