UPDATE 1-Trade groups seek more U.S. pressure on India over patent protection

By Bill Berkrot

Feb 7 (Reuters) - The U.S. Chamber of Commerce on Fridaycalled on the government to ratchet up pressure on India overintellectual property rights, in a move that could help preventIndian companies from producing cheap generic versions ofmedicines still under patent protection.

In a submission to the Office of U.S. Trade Representative(USTR), the Chamber of Commerce requested that India beclassified as a Priority Foreign Country, a tag given to theworst offenders when it comes to protecting intellectualproperty and one that could trigger trade sanctions.

Other trade groups, including those representing thepharmaceutical and manufacturing industries, echoed the call fora tougher stance on India.

The recommendations, which were due by Friday, were for adocument known as a Special 301 Report prepared annually by theOffice of the United States Trade Representative.

India is on the U.S. government's Priority Watch List forcountries whose practices on protecting intellectual propertyWashington believes should be monitored closely.

DETERIORATING ENVIRONMENT

In its new submission, the Global Intellectual PropertyCenter (GIPC) of the Chamber of Commerce said: "We highlightIndia as a country with particular challenges with respect tointellectual property protections."

"Because India has not shown a record of engagement on theseissues and the environment has deteriorated significantly sincelast year, we are now recommending that India be designated aPriority Foreign Country," it said.

India received the lowest score in the trade group's IPIndex released last week, performing poorly in all six ratingcategories: patents, copyrights, trademarks, trade secrets andmarket access, enforcement, and membership and ratification ofinternational treaties.

The perspective from India is that many patented drugs aretoo costly for most of its people. The government in New Delhiis pushing to increase access to life-saving treatments in acountry where only 15 percent of 1.2 billion people have healthinsurance.

Pharmaceutical Research and Manufacturers of America(PhRMA), the U.S. industry trade group for drugmakers,acknowledged in its submission that "India faces in extendinghealthcare access to its large and growing population."

But the trade group also is calling for India'sclassification downgraded, "to encourage increased examinationof India's actions and to foster enhanced bilateral engagement,"Mark Grayson, the group's spokesman for international issues,said in an emailed statement.

"The situation in India continues to deteriorate for theU.S. research-based biopharmaceutical industry and otherinnovative U.S. industries," Grayson said.

The National Association of Manufacturers joined the chorusof calls to reclassify India, writing in its submission:"India's egregious acts, policies and practices, as well as itsfailure to enter into good faith negotiations to address them,support such a designation."

The pharmaceutical industry's push for a tougher line onIndia was revealed on Thursday by a Reuters report, although atleast one member, British drugmaker GlaxoSmithKline,called for constructive engagement with Indian officials ratherthan a harder stance.

Calls for increasing pressure on India come as an Indiangovernment committee reviews patented medicines sold by foreigndrugmakers to see if so-called compulsory licenses, which ineffect break exclusivity rights, can be issued for some in aneffort to bring down costs, two senior government officials toldReuters.

The drugs being considered for such patent-breaking licensesare used for treating cancer, diabetes, hepatitis and HIV, saidthe sources, declining to give details.

No timeline has been given for completion of India's reviewprocess.