China, India named on U.S. piracy, patents black list

WASHINGTON, (Reuters) – The United States named China and India on a watch list for countries that aren’t doing enough to fight intellectual-property crimes, warning of trade-secret theft in China and the proliferation of generic drugs and counterfeiting in India.

The U.S. Trade Representative resisted lobbying by the U.S. Chamber of Commerce and pharmaceutical industry to censure India with the “worst offender” tag in its annual scorecard on how well countries protect U.S. patents, copyrights and other intellectual property (IP) rights.

The United States instead kept India, which is in the midst of elections, on its Priority Watch List along with China and eight other countries. It would start a special review of India in the fall and “redouble” efforts to address concerns with the new government, the USTR said.

Some were disappointed that the USTR failed to name India as a “priority foreign country” – a label that can eventually lead to trade sanctions or the loss of trade benefits – although others stressed it was not off the hook yet.

Orrin Hatch, the top Republican on the Senate Finance Committee and one of four top lawmakers who ordered an investigation into Indian trade policies last year, said the country was a “textbook example” of poor practices regarding intellectual property. “A stronger response is required to dissuade other countries from adopting similar policies,” he said in a statement.

Intellectual property lawyer Steven Tepp, the president of consultancy Sentinel Worldwide, said the planned special review allowed the USTR to change India’s ranking and should tell the Indian government the issue needed “urgent attention”.

A USTR official, who spoke on condition of anonymity, said the purpose of the review was to assess the new government’s level of engagement and the USTR was not contemplating a change in India’s status in 2014. A new process would start in 2015, he added, and stakeholders could give their input.

“Labeling India as a Priority Foreign Country just as a new government comes to power would have meant that relations would start off on the wrong foot, but the potential penalty which would be levied against India will now hang over bilateral relations,” said Center for Strategic and International Studies adjunct fellow Persis Khambatta.

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