This article has been written by Mr. Srivatsan Ananth, a 2nd year student of IFIM Law School, Bengaluru.
Abstract:
Intellectual property, in simple words, refers to creations of the mind. IPR is a tool of protection, used to protect the creators who have invested their time, money, and energy on their creations. IPR, Intellectual Property Rights, are the exclusive rights given to people over their creations or inventions, of their own minds. The person who creates the subject matter has the right over the use of his or her invention for a definite period.
Free trade is a policy of trade which puts no restriction on imports and exports. A free trade agreement (FTA) helps in establishing a free trade policy. It is a treaty to reduce or eliminate certain barriers to trade and investment. And, to facilitate stronger trade and commercial ties between the countries involved in the agreement. This article provides an overview of the India-EU free trade agreement, its influence on IPR and other aspects of it.
Introduction:
Free trade s a policy by which a government does not discriminate against imports and does not interfere with exports by applying tariffs or subsidies. The goods and services are bought and sold across international borders with little or no government tariffs, subsidies, or prohibition to hinder the exchange. The concept of ‘Free Trade’ is based on the theory of Laissez-faire. The French phrase means “allow to do”. It is an 18th century Economic theory which means, the government shall not discriminate against imports or interfere with exports by applying tariffs or subsidies. The exchange or transaction is basically free from any economic intervention.
FTAs (Free Trade Agreement) are treaties between two or more countries formulated to reduce or eliminate certain barriers in relation to trade and investment. It is also to facilitate stronger trade and commercial ties between parties involved. However, a free trade policy does not necessarily imply that a country ends its control and taxation of imports and exports. India has signed 13 regional free trade agreements until 2023. The reason was simple, the trade agreements seek to promote India’s trade with other countries by lowering tariffs and gaining access to the new markets.
Benefits of a Free Trade Agreement:
A free trade agreement contributes to a greater economic activity. Reduction and elimination in tariffs is not the only aim of free trade agreement. It also helps in addressing the hinderances that impede the free flow of goods and services. An FTA also increases the possibility of investments and finally, it improves the rules, laws and regulations affecting such issues as intellectual property, e-commerce and government procurement.
In general, a free trade agreement made between one nation with another gives the businesses and the consumers improved access to a wider range of competitively priced goods and services, new technologies and innovative practices.
Free trade agreements can deliver enhanced trade and investment opportunities that contribute to the economic growth of less-developed economies.
India and European Union trade relations:
Trade talks between India and European Union had been languishing for several years. There had been some areas of disagreement. The expectations set by India and the European Union are divergent on some aspects. Tariffs on cars, wine and dairy products imported from EU, liberalization of the visa regime for Indian professionals entering the EU are some of the issues upon which the two parties could not form an agreement. When the FTA talks began, India had high tariffs in areas of interest to the EU.
Both India and European Union began to voice out the concerns related to the restrictive measures that function as barriers to importers and exporters. India had been affected severely due to EU regulations and standards. This was mainly in the domain of agricultural exports. For instance, the import of Indian Alphonso Mangoes was banned in May of 2014. But subsequently it was lifted.
Several other concerns were discussed, such as, the allowance of skilled Indian professionals to temporarily reside and work in EU member states, liberalization of professional sectors, deep cut of tariffs and taxes.
EU – India Free Trade Agreement:
The European Union is India’s 3rd largest trading partner. Whereas India is European Union’s 10th largest trading partner. The objectives of the FTA negotiation were,
⇒ Remove barriers and help EU entities to export more.
⇒ Open services and public procurement markets.
⇒ Ensure the protection of Geographical Indications (GI).
⇒ Ambitious commitments on trade and sustainable development.
The parties also aimed at reaching an Investment Protection Agreement which will significantly increase the level of confidence among investors on both sides, thereby leading to further increases in foreign direct investment in both directions. Non-discrimination, Protection against expropriation without compensation and unfair treatment of investors and their investments, while preserving the right to regulate, Transfer of returns are some of the commitments made.
Effects of EU-India FTA on IPR Laws:
The EU-India FTA draft practically covers all areas of IPR. The draft indicates that it shall complement and further specify the rights and obligations between the parties, beyond those mentioned under the TRIPS agreement and other international treaties in the field of intellectual property to which they are parties. Here the intention to exceed the standards mentioned in TRIPS is explicit. However, the fact that India is home to one of the largest populations of poor people in the world has been neglected. About 30% of the population is below the poverty line. Higher standards of IPR protection will aggravate the exclusion of the poor from accessing essential products, such as medicines and products required for agriculture. It is to be negotiated to address the concerns in a way consistent with the national interests.
Parallel imports are a mechanism which prevents market fragmentation and allows access to products protected by IPR. They are essentially used in pharmaceuticals. The possibility of parallel importing products cheaper than those products available locally may enable access to products which might not be available easily or affordable. Article 4 of the EU-India FTA draft provides the parties with the right of parallel imports.
India is party to the TRIPS Agreement. As per TRIPS, India can grant product patents for drugs and pharmaceuticals, which has already impacted the accessibility and affordability of cheap lifesaving drugs. However, provisions under TRIPS Agreement have also ensured that the door has not been closed completely on India’s generic drug manufacturers and allows India to continue grant compulsory licenses. The EU opines that India must incorporate the data exclusivity law as it is the country’s responsibility to make sure the data is protected against unfair commercial use.
India provides copyright protection for computer programs. The FTA requires India to provide patent protection to databases. However, compelling to do so will be an obstacle to the access to knowledge for the public.
The European Union, through the Free Trade Agreement, wants to extend the period of the rights of the publishers and music/film companies. The EU states that if a fixation of the performance/film/broadcast has been lawfully published to the public, the rights shall expire not less than 50(or 60) years from the date of first such publication to the public. The EU wants to provide for a longer protection of the rights.
In the case of generic medicine, our laws do not ask for submission of test data for licensing of any medicine whose patent period has expired. A generic medicine can be registered if it has been proven or shown that it is equivalent to an existing medicine by the manufacturer. The performance of lengthy clinic trials by the manufacturer to establish that it is safe and effective is not required. Hence, generic medicine producers produce medicines immediately after the expiry of its patent and sell them cheaper worldwide. India is the fourth largest producer of medicines. However, European Union wants to introduce data exclusivity in India. The companies will be forced to generate their own test data to register a generic medicine which will subsequently impose huge costs. Article 10 of the FTA states that the data that has been submitted to get approval for registration of the drug shall not be disclosed to any third party. Any subsequent application made for registration of a drug by another person would
not be granted unless the subsequent applicant submitted his/her own set of data to prove that the drug meets the requirements. Any product submitted without such data will be removed from the market.
Conclusion:
It is evident that the efforts made by the European Union through the EU-India Free Trade Agreement is to increase the standards of IPR protection. But it is also to be said that such elevation is being done without considering the development needs of India. While European Union wants to improve or strengthen the IPR protections, India is hesitant to do so. A compromise must be simply reached to find the common ground between the two entities. Though it might seem that following the Indian laws might benefit us more, the points established by European Union are also valid and to be given attention.
References:
- https://manupatra.com/roundup/346/Articles/Analyzing%20the%20of%20Free%20Tr ade.pdf
- https://ecfr.eu/special/what_does_india_think/analysis/the_fta_a_strategic_call_for_th e_eu_and_india
- https://policy.trade.ec.europa.eu/news/eu-and-india-kick-start-ambitious-trade- agenda-2022-06-17_en
- https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries- and-regions/india/eu-india-agreement_en
- https://www.thelancet.com/article/S0140-6736(11)60524-2/fulltext