India Press Release

Remarks by Jon W. Dudas, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Confederation of Indian Industries, India International Center, New Delhi, India December 7, 2006

As Prepared for Delivery

Hello.   I am Jon Dudas, the Under Secretary of Commerce for Intellectual Property, and the Director of the United States Patent and Trademark Office (USPTO).  I was nominated by President George W. Bush in 2004.  As Under Secretary of Commerce for Intellectual Property, my office helps set U.S. policy for intellectual property (IP) protection, and I represent the United States Government when we negotiate with other countries to protect IP.  As Director of the USPTO, I administer the U.S. laws of granting patents and trademarks and lead our staff of 8,000 employees. 

We can all appreciate the growing emphasis being placed on intellectual property.  We hear our nations' top leaders talking about protecting IP, and we see the positive results of IP protection in our countries' economies. Helping India to have a strong system of intellectual property protection is one of the best steps you can take to help your country's people - and economy; you can improve your country's public health and safety, encourage technological development, and provide for economic growth.  Quite simply, you can improve your country's future!

Your service in advocating and enforcing IP rights will strengthen your country's economy - and ultimately the quality of life of Indian citizens in many ways.  In the United States, we have seen firsthand the value of IP protection.   Protecting people's products and services has promoted and encouraged innovation and progress in America.  For example, a recent World Bank Study found that an increase of 20 percent in the annual number of USPTO patents granted is associated with an increase of 3.8 percent in annual economic growth for the United States.

II.  George Bush-Manmohan Singh Joint Statement

Understanding the value of IP, U.S. President George Bush and Indian Prime Minister Manmohan Singh issued a joint statement agreeing "that the United States and India would work together to promote innovation, creativity and technological advancement by providing a vibrant intellectual property rights regime, and to cooperate in the field of intellectual property rights to include capacity building activities, human resource development and public awareness programs."  I am here to further this joint goal.
 
III.  Patents

Let me first commend the Indian government for updating India's IP regime by passing the 2005 Patent Amendment, which extended patent protection to pharmaceuticals and agricultural chemicals.  Nonetheless, further modifications are necessary to truly modernize India's patent regime with regard to pharmaceuticals and biotechnology.  For example, the new law contains ambiguities regarding patentability criteria and provisions relating to the issuance of compulsory licenses for patented drugs.

We are also concerned about provisions allowing for pre-grant opposition of patent applications.  Third parties are known to bring frivolous, pre-grant challenges to patent applications that add needless delay patent grants.  Post-grant opposition provisions would make the Indian market more attractive to potential investors, as they provide a means to challenge invalid patents while not delaying the grant of valid patents.

We also are concerned about reports of possible amendments to the law that may make Indian mailbox patents obtained by U.S. pharmaceutical companies unenforceable.  If true, this is a very unfortunate development.  Many key stakeholders in India have come to recognize that without implementing a strong framework for patent protection, India will not attract high-technology businesses, including those in biotechnology and entrepreneurs in other advanced technology areas to its market.  We would like to work cooperatively with your government to share information about how to strengthen India's patent regime to foster investment, and to address other long-standing issues, such as processing times for product patents. 
 
IV.  Data Protection ("Data Exclusivity")

The U.S. Government would like to work with India to encourage the establishment of a Trade Related Aspects of Intellectual Property Rights (TRIPs) - a consistent data protection regime for innovative pharmaceutical and agricultural chemical test data.

Innovative pharmaceutical companies expend immense resources and capital to collect data for their clinical dossiers.  Allowing third parties to rely on this information to obtain marketing approval without authorization of the right holder provides an unfair commercial advantage to third parties, creating a disincentive for innovative products to be developed and registered in India.  As a result, the Indian population may have lower access to new medicines.

It is my understanding that a growing number of Indian pharmaceutical companies, technology firms and educational and research institutions favor the development of a TRIPs-consistent data exclusivity regime.  We will continue to encourage the Indian Government to implement this protection, which is consistent with Article 39 of the TRIPs Agreement.

V.  Copyright

Piracy costs the U.S. business software, recording, motion picture, entertainment software and book industries collective losses of U.S. $440 million in 2005.  This is an improvement over 2004, where collective losses totaled more than U.S. $483 million.  Indian producers and artists also suffer as most of the entertainment products consumed in India are produced domestically.  For example, the market for legitimate music in India declined by 50 percent in 2004, and Bollywood continues to face increasing piracy problems.

We are pleased India is moving forward with amending it Copyright Law to address the new digital age.  Such changes will benefit India's copyright industries, which promote India's unique cultural heritage and economic development.

We are concerned that the proposed amendments to the Copyright Law are insufficient in many aspects.  The USG has shared our specific concerns about the legislation with the Government of India (GOI), and we look forward to working with the GOI to ensure that the revised Copyright Law provides the rights required by the World Intellectual Property Organization (WIPO) Internet Treaties.  We look forward to working together with you and the GOI to ensure that the revised Copyright Law provides the rights required to protect copyright owners and creators in the digital age.

We continue to believe it is very important for India to join the WIPO Internet Treaties.  Implementation of the WIPO Internet Treaties will allow Indian copyright industries to compete effectively in the digital global marketplace, as Indian performers and producers will receive the highest level of international protection afforded to copyright owners and creators.

We are also concerned about the pervasive unauthorized photocopying that is occurring in and near universities when they met with you in the spring.  The need for sustained enforcement efforts against commercial photocopying is critical.
 
VI.  Trademarks

We appreciate the steps that India has taken to improve its trademark legislation.  We remain concerned, though, about U.S. industry reports about the protracted examination period and the backlog in examination.
 We are interested in hearing from industry members about their challenges in obtaining trademark registration and what they think are the causes of this backlog.  We also would appreciate suggestions for any assistance that the USPTO could offer to government or industry that may be helpful in improving the trademark examination process.

VII.  Enforcement

Despite India's substantial efforts to reform its intellectual property regime, piracy and counterfeiting rates will continue to rise without effective enforcement.

Effective enforcement of IP laws, with a greater number of convictions and imposition of deterrent penalties, is a necessity for all countries, developed and developing alike. IPR enforcement is necessary to strengthen the investment climate and attract and retain innovative companies and creative artists that are the engines of economic growth.

There is only a two percent conviction rate for IP crimes in India.  Right holders are not afforded enough ability to participate in the prosecution.  Greater cooperation between the authorities and the right holders would help in the prosecutions.

We understand that IPR enforcement is not an easy task.  We were encouraged when India modified the Code of Civil Procedure to shorten the time in which IP civil cases must be completed.  Going forward, we encourage you to make additional legislative changes that may be used to more aggressively prosecute and issue deterrent penalties in IP cases.  India's laws provide for minimum sentences in IPR criminal cases.  If these standards were followed every time, India would be well on the way to deterring infringement.

Increased awareness of IP crimes and their impact on members of the bench would improve India's enforcement regime.  Increased cooperation between the government and right holders in increasing publicity would go a long ways to raising the awareness of the deleterious effects of IP crimes.  Beside the public, criminal law enforcement authorities in India lack expertise and resources in this area.

Many countries have recently organized a national level IP crime task forces to help coordinate efforts.  This option could hold promising improvements for India as well.  The right holders also have a role to play in the sharing of information with the appropriate government officials and assisting in investigations and prosecutions where possible.  And we hope the judicial system will be opened more to allow right holders better access to case information. 

We encourage India to pass an optical disc regulation to fight against the growing problem of unauthorized optical disc production sites in India.  There are reported to be as many as twenty optical disc plants operating in India producing pirated discs.

The most significant area where CII and USPTO can help each other is through increased cooperation in capacity building programs.  A few USPTO employees participated in the CII and INL sponsored workshops in April.  USPTO welcomes any opportunity to further develop that relationship by holding more capacity building workshops.  It is important to build upon the momentum established last April.

VIII.  Technical Assistance

The U.S. Government is interested in providing significant technical assistance for India to help build capacity in stronger IPR protection.  Further to that goal, a member of my delegation, Mr. Keating, has recently been posted to the U.S. Embassy in New Delhi to be our "IPR Attaché" for the next several years.  His job will be to work exclusively on furthering U.S.-India cooperation on IPR.