India continues to be on the ‘Priority Watch List’ of the United States Trade Representative (USTR) for lack of adequate intellectual property (IP) rights protection and enforcement, the USTR said in its Annual Special 301 Report that identifies trade barriers to American companies due to IP laws of other countries.

India remained one of the most challenging economies for IP enforcement and protection and the country’s overall IP enforcement was inadequate, it said, while adding that while the country’s enforcement of IP in the online sphere has gradually improved, a lack of concrete benefits for innovators and creators persists, which continues to undermine their efforts.

The Annual Special 301 Report identifies trade barriers to US companies due to IP laws of other countries. The US placed nine countries- Argentina, Chile, China, Indonesia, Russia, Saudi Arabia, Ukraine and Venezuela- in the list.

“These countries will be the subject of particularly intense bilateral engagement during the coming year,” said USTR Katherine Tai.

As in its earlier reports, the USTR said it continues to monitor the restriction on patent-eligible subject matter in Section 3(d) of the India Patents Act and its impact on incentivizing innovation that benefits Indian patients.

India doesn’t allow ‘evergreening’ of patents, especially in pharma. Section 3(d) of the Patents Act prohibits the grant of ‘evergreening’ patents, which are additional patents for a drug with no therapeutic benefit and serve only to increase the term of patent monopoly. The US has often objected to this regulation.

“Despite India’s justifications of limiting IP protections as a way to promote access to technologies, India maintains high customs duties directed to IP-intensive products such as medical devices, pharmaceuticals, Information and Communications Technology (ICT) products, solar energy equipment, and capital goods,” USTR said, adding that patent issues continue to be of particular concern as long-standing issues remain for innovative industries.

The potential threat of patent revocations, lack of presumption of patent validity and the narrow patentability criteria under the India Patents Act burdens companies across different sectors.

As per the report, the US and Indian companies have identified trade secret protection as a growing concern and expressed interest in India eliminating gaps in its trade secrets regime, such as through the adoption of trade secret legislation that comprehensively addresses these concerns.

The US said it intends to continue to engage with India on IP matters, including through the United States-India Trade Policy Forum’s Intellectual Property Working Group.

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