VZCZCXRO2313
RR RUEHBI RUEHCI
DE RUEHNE #1683/01 1701251
ZNR UUUUU ZZH
R 181251Z JUN 08
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC 2286
INFO RUEHLM/AMEMBASSY COLOMBO 0896
RUEHKA/AMEMBASSY DHAKA 1259
RUEHIL/AMEMBASSY ISLAMABAD 5004
RUEHKT/AMEMBASSY KATHMANDU 1718
RUEHCG/AMCONSUL CHENNAI 3103
RUEHBI/AMCONSUL MUMBAI 2188
RUEHCI/AMCONSUL KOLKATA 2375
RUCPDOC/USDOC WASHDC
RUEHGV/USMISSION GENEVA 7777

UNCLAS SECTION 01 OF 04 NEW DELHI 001683 
 
DEPT FOR EB/IPC- EFELSING/JURBAN AND SA/INS 
USDOC FOR 4530/MAC/ANESA/OSA/LDROKER/ASTERN 
USDOC FOR 3131/USFCS/OIO/BORR 
USDOC FOR KSCHLEGELMILCH 
DEPT PASS USPTO 
DEPT PASS LOC FOR STEPP 
DEPT PASS USTR FOR S. ASIA, AADLER/SMCCOY/TGARDE 
GENEVA FOR USTR 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: KIPR ETRD ECON EINV IN
SUBJECT:  POST RECOMMENDS MODIFIED IPR STRATEGY FOR INDIA 
 
REF:  A. STATE 45113, B. NEW DELHI 540 
 
¶1. This cable is sensitive but unclassified.  Please treat 
accordingly. 
 
¶2. Summary:  Despite some impressive advancements on certain aspects 
of intellectual property rights (IPR) and the GOI's continued 
willingness to engage, India remained on the U.S. Trade 
Representative's (USTR's) 2008 Special 301 Priority Watch List, 
having made little progress on the IPR issues identified as most 
essential to U.S. interests over the preceding year.  Post therefore 
believes it would be worth refining USG strategy for IPR engagement 
with India.  What follows is a series of recommendations, with 
embedded commentary, that Post feels could greatly strengthen the 
USG's arguments on IPR.  Post wishes to propose a coordinated, 
interagency program that should, by virtue of inclusive formulation 
and execution, foster an institutional knowledge and vision of its 
own.  Post believes this will allow the USG to present a cohesive, 
effective, dynamic case that can survive turnover among U.S. and 
Indian interlocutors.  End summary. 
 
BACKGROUND 
--- 
 
¶3. India has made some impressive steps on its patent, trademark, 
and customs infrastructure and processes in recent years.  However, 
there has been little change in India's IPR policy or legislation 
since the Patent (Amendment) Act, 2005, and only incremental 
progress on enforcement.  For the past three years, U.S. talking 
points for India have consistently focused on: 
-- clarification of the scope of patentability under the 2005 Act; 
-- consideration of U.S. comments on a draft amendment to the 
Copyright Act that has been pending for several years; 
-- implementation of effective data protection for agricultural and 
pharmaceutical chemicals; 
-- implementation of the provisions set out in the WIPO Internet 
Treaties; 
-- enactment of optical-disk legislation; and 
-- strengthening of enforcement structure and execution for both 
police and customs. 
 
¶4. The GOI has generally been happy to engage with the U.S. on IPR, 
but Indian talking points have been equally consistent, showing 
simultaneously a strong interest in convincing the U.S. that India's 
IPR environment has improved and a disinclination to move 
purposefully on the issues of greatest U.S. concern.  In the last 
week of February, however, in Ministry of Commerce & Industry (MOCI) 
Joint Secretary N. N. Prasad's presentation at an IPR conference in 
Mumbai and in Acting Assistant USTR (AAUSTR) for IP & Creativity 
Stan McCoy's meetings with a number of officials, GOI rhetoric 
shifted subtly.  The content was much the same as always, with a few 
illustrative revelations in the meetings, but the GOI drew firmer 
conclusions:  1. India is now meeting all international obligations; 
¶2. India is a leader on IPR among developing countries; 3. IPR 
enforcement is progressing at least as well as can be expected; 4. 
patent- and trademark-application systems are running efficiently, 
and 5. the IPR environment in India is not discouraging foreign 
investment.  Post believes that the dialogue, long good-natured but 
repetitive, would benefit from further refinement to the U.S. 
approach, some ideas for which are described below. 
 
BOLSTER ALL CLAIMS WITH DETAILS OF U.S. INTERESTS 
--- 
 
¶5. The U.S. IPR team has repeatedly presented strong arguments on 
two important fronts, clearly explaining both why certain IPR moves 
are necessary in principle or with respect to TRIPS (the World Trade 
Organization's agreement on Trade-related Aspects of Intellectual 
Property Rights) and, in many cases, how they would benefit India. 
The discussion of divergent interpretations of what is 
TRIPS-compliant remains essential, as anything seen as "TRIPS-plus" 
here is regarded as an unrealistic imposition on a developing 
country.  General discussions of principled policies are also 
valuable, as they help establish a foundation for specific issues. 
 
NEW DELHI 00001683  002 OF 004 
 
 
However, the argument on principle and international obligations 
seems to be less and less persuasive, in itself, as the GOI seems 
increasingly convinced that its policies are sound.  Further, 
emphasizing the benefits to India and the Indian economy of a strong 
IPR regime, while valuable and worth continuing, has limited impact 
in isolation.  The GOI knows that U.S. interest in India's IPR 
regime is not purely altruistic, and gaps in the USG effort to lay 
out U.S. commercial interests in improved IPR protection--and 
equally importantly, to demonstrate the damage to U.S. commercial 
interests under the current IPR regime--allow the GOI to delay 
action and, in the worst case, dismiss U.S. arguments as meddling in 
domestic affairs. 
 
¶6. Post therefore believes that USG officials must be better 
prepared to address the specifics of America's interest across a 
broad range of IPR issues when meeting with the GOI.  To give one 
example, in her meeting with AAUSTR McCoy, Information and 
Broadcasting Secretary Asha Swarup said, essentially, "Why does the 
U.S. care about our implementing an optical-disk licensing regime or 
stricter copyright protection for optical media, since almost all 
piracy is of Indian movies and music?"  AAUSTR McCoy provided a 
sound argument centering on software piracy and the possibility that 
insufficient protection might act as a deterrent to investment for 
the American movie and music industries.  However, we were not 
equipped with concrete details on any current piracy in India of 
American movies or films or on widespread piracy's projected impact 
on American investment.  Similar instances have arisen in a number 
of contexts, illustrating the need for the U.S. IPR team to be 
prepared with details of American interest for every issue to be 
raised in bilateral discussions. 
 
GATHER DATA 
--- 
 
¶7. To that end, Post feels the U.S. IPR team--stakeholders in 
Mission India and in the U.S.--should engage in a renewed effort to 
collect a range of key data, coordinating with legal and industry 
organizations in both countries.  The IPR team should once again 
encourage these private players to help bolster U.S. arguments on 
their behalf by providing concrete, thorough data and giving updates 
as new data emerge.  Where such encouragement fails to yield 
cooperation, the IPR team should consider insisting that the USG 
cannot continue to push arguments with the GOI that cannot be 
substantiated with real data and examples, as such anecdotal claims, 
easily argued away by Indian interlocutors, only diminish the 
strength of the USG's overall effort on IPR in India. 
 
¶8. Some cases where increased data would be useful arise in almost 
every bilateral interaction on IPR.  For instance, the U.S. has long 
held that the provision for pre-grant opposition is a serious flaw 
in India's patent law.  Joint Secretary Prasad, who serves as the 
primary GOI point of contact on IPR issues, has responded several 
times that there have been only a few hundred instances of pre-grant 
opposition out of the more than 110,000 patent applications filed 
since 2005 and that, despite repeated MOCI requests, no one has been 
able to offer an example of frivolous use.  Pravin Anand, a 
prominent IP attorney based in Delhi, tells Post that pre-grant 
oppositions kill good patents all the time, but we have no concrete 
data to present.  Even the Pharmaceutical Research and Manufacturers 
of America's (PhRMA) submission for Special 301 was vague on this 
point.  Despite Post's encouragement, companies have proven 
reluctant to provide specific examples relating to pre-grant 
opposition directly to the GOI.  Post therefore suggests a USG 
effort to collect data from concerned companies in the U.S. and 
India and from Anand's and other local firms. 
 
¶9. Prasad has also said trademark applications are now being 
processed in about 24 months and that the GOI has cleared its 
backlog of pending trademark applications.  Although U.S. companies 
generally report that trademark applications are indeed being 
processed within this timeframe, P. K. Modwil, Pfizer's Regional 
Manager of Global Security for Asia Pacific, says the trademark 
application for Viagra has been pending for seven years or more. 
The IPR team should coordinate an effort to collect any like cases 
 
NEW DELHI 00001683  003 OF 004 
 
 
and document them with the help of stakeholder companies and 
industry bodies. 
 
¶10. Looking more broadly, Secretary Swarup voiced plainly what seems 
to be the opinion of many in the GOI, that the IPR environment is 
not inhibiting foreign investment in India.  Dr. Ananda Chakrabarty, 
a U.S.-based scientist and researcher, offered a potent refutation 
of this claim in his presentation at February's IPR conference.  He 
said he wants to start a pharmaceutical-manufacturing firm in India 
based on his research into promiscuous drugs, which can be used to 
treat several life-threatening diseases simultaneously.  However, he 
feels he cannot safely invest in India because Section 3d of the 
Patent Act prohibits patents for new uses of existing chemical 
entities. 
 
¶11. Post believes that our case would be reinforced if USIBC and 
industry groups would compile a list of other cases that would 
demonstrate problems in India's IPR regime in pharmaceuticals, 
sof4ware, movies, music, and other sectors and would spell out with 
direct input from American industry the impact of legislation and 
piracy on doing business and planning investments would fortify the 
USG case on many fronts.  Additionally, all cases that detail 
hindrances to investment in pharmaceuticals would help when the two 
sides discuss IPR protection vis-a-vis public health, a favorite 
defense for the Indians. 
 
REEVALUATE SPECIAL 301 AND GENERAL PRIORITIES 
--- 
 
¶12. The data-gathering effort should be intellectually scrupulous 
and should not be undertaken with the objective of confirming or 
invalidating any of the IPR priority issues we have been focusing on 
in India.  Rather, Post feels the IPR team should empirically gather 
as much relevant information as possible and then take a fresh look 
at priorities, both generally and with respect to Special 301 as 
applied to India.  Even if the data show USG priorities to be 
perfectly conceived, Post expects that the mere act of reassessing 
interests and benchmarks with respect to India will move the 
dialogue forward with the GOI, which seems to feel the USG is 
intransigent and fails to recognize realities on the ground. 
 
INTERACT MORE CONSISTENTLY, FREQUENTLY, AND DIRECTLY 
--- 
 
¶13. Post recommends that agencies in the U.S. consider convening an 
India working group of stakeholders that would meet and communicate 
regularly to coordinate visits, strategy, and information sharing. 
That working group should, in turn, coordinate actively with Post's 
IPR Working Group, headed by the U.S. Patent & Trademark Office 
(USPTO) Attache, via e-mail and quarterly DVCs.  One of the 
strengths of the USG approach has been the capacity to draw on the 
expertise of the many offices working on aspects of IPR, but without 
extensive coordination, there is the risk of delivering inconsistent 
messages and of separate offices getting incomplete or inconsistent 
information from Indian interlocutors.  More systematic coordination 
among USG representatives in both the U.S. and India would help 
ensure that all interaction with the GOI is consistent over the long 
term and that all USG offices in both countries keep abreast of 
goings-on throughout all stakeholder offices. 
 
¶14. Post suggests that a member of the U.S.-based working group 
visit India at least quarterly, if possible, and engage in bilateral 
teleconferences or video conferences between visits, if the progress 
of issues demands.  Engagement should include but extend beyond the 
Trade Policy Forum's (TPF's) IP Working Group, with counterparts 
discussing key issues more frequently than strictly necessary for 
the TPF alone. 
 
¶15. Moreover, each USG visitor should meet broadly with GOI and 
other Indian stakeholders on each visit, rather than accepting MOCI 
as an umbrella interlocutor on IPR issues.  MOCI is a critical 
player and should remain an essential part of each visit's agenda, 
but the need for broader engagement was exemplified twice in AAUSTR 
McCoy's February meetings.  Secretary Swarup explained, despite 
 
NEW DELHI 00001683  004 OF 004 
 
 
repeated assurances from MOCI that the GOI is close to implementing 
an optical-disk law, that the inclusion of blank media in the draft 
remains a fractious issue, that it will take time before a final 
decision can be made, and that there is no guarantee India will 
implement an optical-disk law at all.  Similarly, while MOCI has 
consistently asserted that the GOI has carefully considered USG 
comments on India's draft Copyright Amendment, the new Registrar of 
Copyrights, Mr. G. R. Raghavendra, informed AAUSTR McCoy that his 
office was just beginning to evaluate USG input.  Broad interaction 
would allow the IPR team to get the most accurate information 
available, and more frequent interaction would allow for fluctuating 
emphasis on various points based on the latest developments and 
priorities. 
 
FACILITATE PRIVATE ENFORCEMENT EFFORTS 
--- 
 
¶16. Post also recommends that USG offices in Washington and India 
work together to facilitate an organized approach by private-sector 
players to IPR enforcement.  By far the most active private entity 
in IPR enforcement in India, the Indian Music Industry association 
(IMI) has orchestrated more than 10,000 raids, including 3,500 last 
year.  Secretary General Savio D'Souza recently expressed IMI's 
frustration with how little other industries are doing on 
enforcement and offered IMI's help in conducting raids with the hope 
of reaping benefits from improvement in the overall IPR environment. 
 Some other organizations, however, find IMI's work to be wasteful 
and ineffective, focusing too much on low-level operators and too 
reliant on rights holders for initiation and legal action.  In part 
because of these differing perspectives, there is limited 
private-sector action on enforcement.  The IPR team should work to 
facilitate discussion across industries in both the U.S. and India 
to encourage collaboration and development of best practices.  Input 
from U.S. experts in discussions could greatly inform enforcement 
efforts. 
 
LEADERSHIP AND LAUNCH 
--- 
 
¶17. Post suggests that New Delhi's USPTO Attache and a provisional 
working-group chair from the U.S. jointly lead the development and 
implementation of the strategy outlined above.  Pos and Washington 
should arrange a USG-only video conference soon involving all 
stakeholder agencies to discuss the ideas laid out herein and any 
other ideas that any agency might have as to how to improve IPR 
engagement, work toward a plan of action, and distribute labor 
related to agreed-upon targets. 
 
¶18. In the absence of Post's USPTO Attache, this cable was cleared 
by USPTO's India team in Washington. 
 
MULFORD