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ABSTRACT
This paper looks at the insertion of China and India in the contested and highly legalised regime of intellectual property rights (IP). In doing so it pays particular attention at two dimensions, the internal adoption of this regime and external endorsement/contestation of international IP norms. Much has been written about whether emerging countries will challenge or support the maintenance of an open rules-based multilateral trade system. In this context, the differentiated integration of these two countries in the IP regime is notable. Domestically, China despite much criticism for widespread IP infringement has followed a maximalist interpretation of TRIPS. India, on the contrary has followed other emerging countries in pursuing a more critical, minimalist understanding. These positions have also been visible at the multilateral arena. This empirical finding runs contrary to the assumption that defiance results from market power. The divergence is the more surprising given a recent explosion of patent filings in both countries. From a political economy perspective, this should translate into support for stricter rules under TRIPS. In explanaining the two countries’ divertent insertion this paper looks beyond economic (market) power and domestic interests and underlines the role of ideational legacies, domestic interests and regulatory capacity. The paper thus stresses the need to look deep into domestic politics and ideational cleavages, as well as at their evolution over time, in order to better understand the international behaviour of emerging countries.
Acknowledgements
The author would like to thank Sandra Lavenex for valuable comments and suggestions on previous versions of this paper. Also to Scott Kennedy and Manoj Pant for their valued inputs during research stays in Beijing and New Delhi and to the numerous anonymous interviewees that contributed to this work. The author is also grateful to the anonymous reviewers and editors at New Political Economy for their invaluable feedback.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes on contributor
Omar Serrano is a senior researcher and lecturer at the universities of Geneva and Lucerne. Recently, he held research fellowships in Beijing, New Delhi, Mexico City and Rio de Janeiro. Dr. Serrano holds a PhD in International Relations/Political Science from the Graduate Institute of International and Development Studies. Before Geneva, he studied in London and Mexico City obtaining a MSc. in Global Politics from the London School of Economics (LSE) and a licenciatura in International Relations from ITAM University.
ORCID
Omar Serrano http://orcid.org/0000-0002-7396-7891
Notes
1. India was a founding member of the GATT and thus joined the WTO in January 1995. China did so only in December 2001.
2. Patents and copyrights were already covered by the Paris and Berne conventions of which India was signatory and which China joined after Deng Xiaoping's reforms in the late seventies. However, in the 1960s and 1970s developing countries had actively contested these conventions on the grounds that this ran contrary to their aims of facilitating the diffusion of knowledge rather than its appropriation (Drahos Citation1998). On this basis, IP rights had been weakened (e.g. by limiting the duration of patents, or by patenting processes but not the end-products in pharmaceuticals). Developing countries made use of instruments such as parallel imports and licensing agreements to pursue development goals that the US in particular considered detrimental to its interests. Domestic private actors pushing for stronger IP protection in industrialised countries also resented rampant piracy from private and government actors, which infringed their copyrights and trademarks. Overall, US, and later European demands, aimed at extending patent protection (usually to twenty years), eliminating licencing agreements particularly those covering technology transfer, granting patent protection to pipeline products, and more generally developing and enforcing a legal framework to ensue copyright and trademark protection.
3. Which administers most existing treaties on the matter (e.g. Berne and Paris Conventions) but is mainly based on ‘soft law’ provisions.
4. The Council for TRIPS for example considered the possible problematic from the clash of public health and TRIPS for the first time in a special session in June 2001 on the basis of demands by a group of developing countries comprising the African Group, Barbados, Bolivia, Brazil, Cuba, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka, Thailand and Venezuela (see: IP/C/W/296). These efforts achieved a major success with the Doha declaration on TRIPS and public health. As Drahos (2002) suggests, “Doha is a concrete success to which developing countries and NGOs can point. Whether Doha represents a significant shift in the power of developing countries to influence the standard-setting process in IP within WTO remains a matter of conjecture” (Drahos 2002: 26 cited in Correa Citation2000).
5. This theoretical framework was developed in the context of a research project titled “Understanding Power Transitions in the Global Economy. Regulatory Politics in Flux” conducted in cooperation with Sandra Lavenex.
6. The gravity model in international economics further suggests that adaptation pressure increases with geographical proximity (Anderson Citation1979, Deardorff Citation1998).
7. Patenting is taking place both domestically and at the international level. A good indicator to measure this growth is to look at (Chinese and Indian) patents filed in the United States; a common EU patent will not enter into force until 2014. Domestic patenting patterns are similar to those in the US and at the Patent Cooperation Treaty of the World Intellectual Property Organization (WIPO). Whereas (particularly within China) patenting includes a significant amount of utility models (so called petty patents), overall the trend is one of increasing innovation (see for example World Economic Forum Global Competitiveness Report 2011–2012: http://www3.weforum.org/docs/WEF_GCR_CountryProfilHighlights_2011-12.pdf).
8. IP rights comprise a wide array of issues. The TRIPS agreement set strong rules covering patents, trademarks, and copyright. Developing countries have sought to widen the TRIPS agenda to include genetic resources (biodiversity) and traditional knowledge and folklore (TK). When referring to IP, this paper looks at patents, trademarks, and copyright and at the issues launched by the development agenda, in particular genetic resources and traditional knowledge and folklore (TK).
9. This behaviour seems consistent with Chinese positions in other regimes, keeping a low profile and only supporting established initiatives. On IP, while on the surface opposed to Western-dominated IP regimes, China “has been reluctant to press for a structural reform of IP rights regulation in the WTO, despite lending its support to developing countries when the negotiations over the Decision on Implementation of Paragraph 6 of the Doha Declaration were under way” (Chan Citation2010: 115). In recent meetings of the TRIPS Council, China has taken a somewhat more vocal stance supporting the initiatives of other emerging and developing countries towards the harmonisation of the Convention on Biodiversity (CBD) and TRIPS (particularly its Nagoya Protocol of 2010 regarding disclosure requirements) and TRIPS (China was a co-sponsor of documents TN/C/W/52 and TN/C/W/59, which call for the TRIPS agreement, the CBD and the Nagoya Protocoll to operate in a mutually supportive way and require mandatory disclosure related to genetic resources and TK). Whether this reflects a new pattern of China's foreign policy, or concerns regarding its wide reposit of TK (particularly Chinese traditional medicine) remains to be seen.
10. This also offen applies to generic pharmaceutical products.
11. For a detailed overview of innovation in India see: Nesta (2012): http://www.nesta.org.uk/library/documents/OurFrugFuture.pdf. Accessed, January 2013.
12. See: European Union (5.2.2013). Report on the protection and enforcement of IP rights in third countries. WTO 29 PI 15 COMER 19.
13. USITC IP Infringement Notices for 337 Investigations: http://www.usitc.gov/secretary/fed_reg_notices/337/. Accessed 18 January 2013.
14. USITC IP Infringement Notices for 337 Investigations: http://www.usitc.gov/secretary/fed_reg_notices/337/. Accessed 18 January 2013.
15. Author's Interview with a public official from the State Intellectual Property Organization (SIPO). 13 August 2013, Beijing.
16. Author's Interview with a public official from the State Intellectual Property Organization (SIPO). 13 August 2013, Beijing.
17. Author's Interview with a public official from the Ministry of Commerce (MOFCOM). 11 July 2013, Beijing.
18. Elsmore and Hurvitz (Citation2012) note that in the year 2010 US Customs made 20,000 seizures with a total domestic value of US$ 188.1 million (at the estimated manufacturer's suggested retail price) and US$ 1.4 billion had they been genuine; whereas European Customs Authorities seized 103 million goods that had an aggregate value estimated at EUR 1.1 billion.
19. The 2006 directive “Guiding Opinions and Promoting the Adjustment of State-Owned Capital and the Restructuring of State-Owned Enterprises” required a dozen strategic sectors (telecommunications, power generation, automobiles, aerospace, equipment manufacturing, chemicals, air freight, architecture, steel and science and technology) to be completely owned or controlled by state owned enterprises (SOEs).
20. See Visiongain report (March 2012): "Eleven Indian companies in the top 50 generics manufacturers worldwide." http://www.visiongain.com/Press_Release/167/Eleven-Indian-companies-in-the-top-50-generics-manufacturers-worldwide-states-visiongain-report (accessed: 15 February 2013).
21. Author's Interview with a policy-advisor involved in these discussions. 16 January 2014, New Delhi.
22. This is somewhat a generalisation. The generics industry is not a unitary actor, particularly so after consolidation-taking place over the past decade saw big Pharmaceutical multinationals buying Indian generics producers. Some of these acquisitions seem to have led to a less vocal position from previously vocal generic actors such as Ranbaxy after being acquired by the Japanese Daichi. Besides, some generics producers have also started investing significant amounts in R&D and joined strategic alliances with big Pharmaceutical corporations. Despite this, from interviews with industry representatives and government officials it transpires that the generics industry is still an important and influential voice resisting patents.
23. See press release of government of India: http://pib.nic.in/newsite/erelease.aspx?relid=9576 (last accessed 28 February 2014).
24. Interview, representative of the Indian Drug Manufacturers Association, New Delhi, 20 February 2014.
25. Jawaharlal Nehru was one of the founding members of the non-aligned movement.
26. A key objective of India (in close collaboration with Brazil) has been making disclosure of the origin of biological material and TK mandatory during filing of patent applications (Saha and Ray Citation2009). This objective has been furthered at all levels: the multilateral arena, bilaterally, and unilaterally by the creation of the TK digital library by which Indian authorities hope to provide information to patent offices of existing biological material and TK.
27. Author's Interview at the permanent representation of India to the WTO. 9 December 2012, Geneva.
28. The IPO has made huge strides in improving its administrative capacities by rapidly increasing personnel (in particular patent examiners) and expertise through enhanced cooperation with third parties (in particular United State's patent office). Interestingly, despite the fact of receiving training from Western counterparties, Indian examiners largely continue to follow long-held minimalist interpretations on IP. This is perhaps one of the best examples of the pervasive influence of developmentalist thinking on IP which may be traced at least to the Ayyangar Committee Report (leading to the 1970 Patent Act commissioned by the government to evaluate the effects of patent law on development). It is on this basis that India shelved part of the patent legislation it inherited from the British colonial administration and successfully developed a domestic pharmaceutical industry based on generics and reverse engineering.
29. Author's Interview with a policy-advisor involved in these discussions. 16 January 2014, New Delhi.
30. Saha and Ray (Citation2009) argue that this also reflected a split within the Indian pharmaceutical industry between firms that felt they had attained a level of development in which stronger IP protection would benefit them, and those which considered stronger IP protection would damage their interests.
31. Traditional Knowledge Digital Library: http://www.tkdl.res.in/tkdl/langdefault/common/Home.asp?GL=Eng.
