Traversing India's Intellectual Property landscape: Insights from the International IP Index

Recently, India secured the 42nd position among 55 leading global economies on the 2023 International Intellectual Property (IP) Index released by the United States Chambers of Commerce. India's overall score remained steady at 38.64 percent.

According to the report, India is well-positioned to become a leader for emerging markets seeking to transform their economy through IP-driven innovation. The United States claimed the top position in the International IP Index, with the United Kingdom and France following closely behind.

The International IP Index evaluates nations' IP standards using 50 indicators across 9 protection categories, offering a comprehensive overview of each economy's IP environment and serving as a blueprint for enhancing innovation and creativity. These indicators offer a comprehensive overview of an economy's overall IP environment and cover nine categories of protection: Patents, Copyrights, Trademarks, Design Rights, Trade Secrets, Commercialization of IP Assets, Enforcement, Systemic Efficiency, and Membership and Ratification of International Treaties.

The 12th edition of the IP Index evaluates IP systems in the top 55 economies using 50 criteria, providing insights on fostering IP-driven innovation and serving as a resource for global leaders. It offers strategies for promoting innovation domestically, enabling leaders to identify successful approaches, address areas for improvement, and understand recent trends in global IP protection.

While some countries like Saudi Arabia, Brazil and Nigeria have improved their IP frameworks, major economies like the United States and the European Union have stalled, risking their leadership in IP.

Here are some key points from the Report:

• The improved overall score in 20 economies has sparked fresh optimism regarding the future trajectory of global IP policy.

• The scores of 27 economies remained stagnant, while eight experienced a decline overall.

• Top-ranked economies, traditionally at the forefront of advancing IP protection, saw minimal positive progress. This underscores the urgency for leaders such as the US, the EU, and others to reaffirm their global leadership in IP policy.

IP Waiver

Even though the global public health crisis related to COVID-19 concluded in May 2023, the World Trade Organization (WTO) persists in discussing the waiver of IP rights for treatments and diagnostics. This ongoing debate over the waiver implies that its supporters may find themselves excluded, awaiting technological solutions rather than contributing to the ecosystem that generates them. If WTO members opt for expanding the waiver, it could lead to a negative impact on economies' scores in the next edition of the Index.

India and the Africa Group are now advocating for IP waivers and compulsory technology transfers specifically concerning green technology and solutions related to climate change.

IP Enforcement

In many economies, enforcement options for IP rights are limited due to overloaded or under-resourced judicial and administrative channels. Furthermore, not all countries grant customs authorities and other designated officials the ex officio authority to seize suspected counterfeit and pirated goods without a formal complaint from the rights holder. This lack of effective enforcement is exacerbated by the rise in global trade levels, enabling even small businesses to access foreign markets that were previously inaccessible.

The surge in global trade over the years has been remarkable. From an estimated value of $3.5 trillion in 1990, the value of global trade in goods soared to over $25.05 trillion in 2022. This exponential growth doesn't even include the exponential rise in trade in services over the past two decades. However, alongside the increase in international trade, there has also been a surge in the circulation of counterfeit and pirated goods. Efforts to track and measure the scale of this issue have intensified, largely driven by organizations like the Organisation for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO).

In 2008, the OECD released a study estimating that global physical counterfeiting amounted to about $200 billion in 2005, a figure revised to $250 billion in 2009 to reflect the growth and changes in global trade. Subsequent updates in 2013, 2016, 2019 and 2021 have shown a steady increase in the volume and scope of counterfeit and pirated goods. The latest estimates from 2021 suggest that this trade amounted to nearly $500 billion, or 2.5% of global trade. Additionally, the OECD and EUIPO's work enables the identification of the top provenance economies for counterfeit goods.

India’s IP environment: A bird’s eye view

In recent years, the Indian government has made notable efforts to improve its domestic IP environment, particularly in expediting patent application processing. Since the introduction of the National Intellectual Property Rights Policy in 2016, initiatives have aimed to reduce the backlog of patent and trademark applications by hiring more personnel and modernizing administrative capabilities. However, despite these efforts, rightsholders still face significant delays in application processing. Acknowledging this challenge, in 2022, the Prime Minister's Economic Advisory Council (EAC-PM) released a report titled "Why India Needs to Urgently Invest in Its Patent Ecosystem." The report underscores the crucial role of IP rights in fostering modern economic development, stating that,

"An evolved Intellectual Property Rights regime is the basic requirement for a knowledge-based economy. Technological innovation and scientific research require a robust patenting system. India is witnessing a surge in startups and unicorns, and an efficient IPR system is an essential prerequisite for a healthy startup ecosystem."

Recent reports from the Parliamentary Standing Committee on Commerce and the EAC-PM highlight a significant shift in Indian policymakers' perception of IP rights. They emphasise the crucial role of IP rights in fostering economic activity and innovation. The EAC-PM report specifically addresses the need for improvements in the administration of the IP system, particularly in reducing long pendency times for patent applications. Proposed amendments aim to streamline opposition mechanisms, introduce clearer timelines and enhance reporting requirements for patent holders, potentially improving India's national IP environment.

The Index highlights a positive development in India's copyright landscape over the past decade, amidst an otherwise challenging environment. Rightsholders have increasingly been successful in defending and enforcing their copyrights through injunctive relief. Since 2019, Indian courts have introduced "dynamic" injunctions to address issues such as mirror sites and reactivation of disabled infringing content through different online access points. This positive trend continued in 2023, with significant judicial actions.

In January, the Delhi High Court ordered the blocking of "stream-ripping" websites, marking the first such order in India targeting this type of infringement. Subsequently, in August, the Court issued a dynamic injunction against audiovisual content infringement, including future creations and copyrighted works, marking another first in India. This judicial approach of injunctive-style relief now provides rightsholders with an effective means of combating copyright infringement in India.

Legal measures granting exclusive rights to prevent copyright infringement, including provisions concerning web hosting, streaming and linking, are crucial. As noted in the previous year's Index, film and audiovisual content piracy posed significant challenges for both domestic and international rightsholders in India. In response, the Indian government introduced the Cinematograph (Amendment) Bill in 2019, which was enacted into law in 2023. This Bill includes new language and criminal sanctions targeting film piracy, with potential imprisonment of up to 3 years and fines of up to 5% of the production costs of the infringed motion picture.

In India, recent developments in the framework for combating online piracy include proposed amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. The Ministry of Electronics and Information Technology has proposed amendments aimed at regulating social media intermediaries and online gaming platforms. These changes seek to define user and service provider obligations, including intellectual property rights and copyright. Intermediaries must communicate platform rules to users, including bans on activities like IP infringement, and take reasonable steps to enforce them. However, the interaction of these rules with current laws, especially regarding copyright, lacks clarity. Existing legislation places few requirements on intermediaries to prevent unlawful activities proactively.

India's engagement in the global IP community and commitment to high IP standards are reflected in its membership and ratification of international treaties. While India has made progress, its score in this category remains lower than other BRIC economies like China and Russia. India is a party to several treaties, but has not ratified others. However, positive steps include seeking public feedback on potential accession to additional treaties like the Hague Agreement, which could enhance its score in this indicator.

Conclusion

On a concluding note, India's recent legislative strides, exemplified by measures such as the Cinematograph (Amendment) Bill 2023, which strengthens penalties against film piracy, underscore its proactive approach to bolstering IP rights. Additionally, notable efforts to combat copyright infringement through dynamic injunction orders and incentives for research and development (R&D) and IP-based taxation are commendable steps toward fostering innovation and creativity. These initiatives reflect India's commitment to promoting a robust intellectual property regime and shaping the global landscape of IP rights protection.

As India progresses in fortifying its intellectual property framework, these legislative advancements and proactive initiatives will be pivotal in fostering innovation, driving economic growth and positioning India favourably internationally.

Akshat Mehta and Nancy Saroha are Ph.D. Research Scholars at Hidayatullah National Law University, Raipur.