Wt/tpr/M/313/Add. 1 31 July 2015

3 TRADE POLICIES AND PRACTICES BY MEASURE

3.1 Measures Directly Affecting Imports

3.1.9 Import prohibitions, restrictions, and licensing

3.1.9.2 Import Licensing and Restrictions
Page 49, paragraph 3.43: The Secretariat's Report states that "[r]estricted items subject to conditions require import permits … in addition to the specific import licence."
Q.23 Please explain why India requires import permits in addition to the specific import license.
Reply: Import of most of the items is free which means no import permit or authorisation is required. However, in few cases both import permits and specific import authorisations may be required to be obtained. DGFT issues import authorisation for products under restricted category of imports.  An importer may also be simultaneously required to obtain  import permit in few cases to comply with the requirement of different Acts  primarily on grounds of preservation of environment, public health etc.
U.S. Follow-Up Question: Please clarify whether there are any restricted items not subject to conditions that require both DGFT import authorization and an additional import permit.
Reply: For most items that are restricted for imports, only DGFT import authorization is required.
3.1.11 Anti-dumping, Countervailing, and Safeguard Measures

3.1.11.2 Safeguards

Page 58, paragraph 3.83: The Secretariat’s Report notes India’s notifications to the WTO Committee on Safeguards under Article 12 of the Agreement on Safeguards.
Q.35 With regards to India’s notifications, for investigations taking place during the review period, please identify the periods of time between the date of notification and each of the following events related to the investigation: date of initiation, determination to impose provisional measures, effective date of provisional measures, determination to impose final measures, application date of final measures, termination of investigation, and date of termination of application of measures.
Reply: The review proceedings are governed by Rule 18 of Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997. In cases where period of imposition of Safeguard duty exceed three years, review has to be done not later than mid term of such imposition.
A review initiated under sub rule (1) has to be concluded with issuance of final findings either recommending the continued imposition of safeguard duty or termination of investigation within a period of 8 months from date of initiation of such review or within such extended period as the Central Government may allow.
However, duty must be levied post review for continued imposition of safeguard duty before the expiry of duty based on which the review is initiated.
Under safeguard rules, Review proceedings do not contemplate Provisional measures and hence, time periods do not apply for the same. However, under Rule 10 of the Safeguard Rules, provisional duty applied under sub-section (2) of section 8B of the Custom Tariff Act, shall remain in force for a period not exceeding 200 days from the date on which it was imposed.
Safeguard duty or provisional safeguard duty levied shall take effect from the date of Publication of the Customs notification in the Official Gazette imposing such duty as provided under Rule 14 of Safeguard Rules.
U.S. Follow-Up Question: In response to the United States’ questions regarding periods of time between notification and various events of safeguard investigations, India seems to have replied regarding the time periods of safeguard review proceedings.  The original question was requesting different information. To clarify, please identify, during an original safeguard investigation, the periods of time between the date of WTO notification and each of the following events related to the investigation:  date of initiation, determination to impose provisional measures, effective date of provisional measures, determination to impose final measures, application date of final measures, termination of investigation, and date of termination of application of measures. In other words, please identify the time lapse between each event and date of WTO notification.
Reply: There is no specific time lapse between each of the event mentioned in the follow up question and the date of WTO notification as provided except in rare cases wherein there has been a minor delay in notification to WTO. . As per the Safeguard Rules, The safeguard investigation has to be completed within 8 months from the date of Initiation or within such extended period as the Central Government may allow.
The various stages of Safeguard investigation and the notifications follow in the following chronological order:
i.Whenever an investigation under the Safeguard Agreement is initiated, the information is immediately notified to WTO.

ii.Normally, recommendation to impose provisional measure is given immediately after the notice of Initiation in the form of Preliminary Findings if the critical circumstances exist. The same is notified to WTO. The preliminary findings is thereafter placed before the standing Board of Safeguards in the Department of Commerce and thereafter on the recommendation of the Board and approval of Finance Minister, Notification for provisional measure is issued. Generally, the effective date for provisional measure is the date of issue of Notification, as indicated in the notification itself.

iii.Final findings have to be issued within 8 months from the date of Initiation or within such extended period as the Central Government may allow. This is notified to WTO immediately. Once the Safeguard duty is imposed through a Custom’s Notification, the same is notified to WTO immediately thereafter.

iv.If the investigation concludes that no injury or threat of injury exists, final findings terminating the investigation is also issued and notified to WTO as well.

v.In case the termination measure is issued after the provisional measure is imposed or final measure is terminated after the midterm review, the date of termination of application of measure shall be the date as mentioned in the notification issued in the matter. This is also notified to WTO.

All these documents are also available in the public domain and can be seen at http://dgsafeguards.gov.in.

3.1.12 Standards and Other Technical Requirements

3.1.12.2 Technical Regulations
Page 59, paragraphs 3.90 and 3.92: The Secretariat’s Report notes that for standards and technical regulations, government entities post draft standards and technical regulations for public comment for 60 days, and that the draft documents may be published on government websites or in the Official Gazette. Draft technical regulations are also notified to WTO Members for comments. Related to these transparency procedures, please reply to the following questions:
Q.37: On February 5^th, 2014 India’s Ministry of Law and Justice issued a memorandum stating that it had, in consultation with other government entities, "formulated a policy on pre-legislative consultation which should invariably be followed by every Ministry/Department of the Central Government before any legislative proposal is submitted to the Cabinet for tis consideration and approval". The policy goes on to explain that "the Department/Ministry concerned should publish/place in public domain the draft legislation or at least the information that may inter alia include brief justification for such legislation, essential elements of the proposed legislation, its broad financial implications, and an estimated assessment of the impact of such legislation on environment, fundamental rights, lives and livelihoods of the concerned/affected people, etc. Such details may be kept in the public domain for a minimum period of thirty days for being proactively shared with the public in such a manner as may be specified by the Department/Ministry concerned." Issuance through electronic media is also encouraged in the policy, as are public consultations. Has this policy been implemented across all Ministries and Departments and their subordinate entities to provide for pre-legislative consultation with stakeholders on draft policies? If it is not fully implemented, when is full implementation across all government entities expected, and what steps is the central government taking to ensure implementation?
Reply: The policy is for Law/Act, and not for the technical regulations to be adopted.
U.S. Follow-Up Question: Please explain if this policy has been implemented across all Ministries and Departments and their subordinate entities to provide for pre-legislative consultations with stakeholders on draft Laws/Acts. If it is not fully implemented for Laws/Acts, when is full implementation across all government entities expected, and what steps is the central government taking to ensure implementation?
Reply: The said memorandum dated February 5^th, 2014 issued by Ministry of Law and Justice to all departments/ministries of the government is primarily advisory in nature. It has been issued with the intention of ensuring uniformity across ministries/ departments in the matter.
3.3 Measures Affecting Production and Trade

3.3.5 Intellectual Property Rights

3.3.5.2 Patents
Page 85, paragraph 3.213: The Secretariat’s Report indicates that while the number of patent applications in India has been growing, the number of patents granted has decreased. The Report also notes that this may indicate a backlog is growing. Another possibility would seem to be that an increasing percentage of applications are being rejected, as opposed to granted.
Q.92 Please provide information which would discern the actual cause(s) of the decrease in grants.
Reply: The grant of Patents has increased over the past 3 years

Year	Granted
2012-13	4126
2013-14	4225
2014-15	5978

U.S. Follow-Up Question: Thank you for the more current information on patent grants in India.  It appears there is indeed an increase in patent grants, although minimal, from 2012-13 to 2013-14, and a more significant increase from 2013-14 to 2014-15. However, the rate of patent grant versus rejection cannot be discerned without corresponding information on patent filings.  Please provide additional and corresponding information on overall patent filings so that this could be done.
Reply:

Patent statistics for 2012-13 to 2014-14 is as under :

Year	Applications Filed	Patents Granted	Rejections (Refusal of grant)	Other Disposals (Applications Abandoned + Withdrawn )	Total Disposal of Patent Applications
1	2	3	4	5	6 (=3+4+5)
2012-13	43,674	4126	353	8674	9027
2013-14	42,951	4225	774	10898	11672
2014-15	42774	5978	1380	13152	14532

Page 86, paragraphs 3.216-3.217: The Secretariat’s Report discusses a Supreme Court of India judgment relating to Section 3(d) of the Patents Act.
Q.94 In consideration of this decision and the new pharmaceutical patent examination guidelines which recite the language of the judgment, please provide information on applications which have been granted following a rejection under Section 3(d). For example: how many there are and what sort of evidence and/or argument examiners may consider persuasive as to significant enhancement of therapeutic efficacy over the closest prior art compounds so as to remove a 3(d) rejection after it is made.
Reply: The cummulative data on examination and grant based on section 3 (d) along with the reasons/evidences etc. in respect thereof has not been compiled by the Office, as the details for each individual case is available in the IPO website. The examination, grant and rejections all are done strictly as per provisions of the Patents Act and the Guidelines ( which has also taken into consideration the Supreme Court decision in this regard) without any discrimination.
Q.95 More generally, please provide information relating to the number of patent applications rejected under Section 3(d) by IPO examiners that concern patent applications outside of the pharmaceutical and biologics technology sectors.  Please identify which sectors outside of pharmaceuticals, biologics, and chemicals, if any, have received rejections and how many have rejections have been made in each sector.
Reply: The Cummulative data on examination and grant based on section 3 (d) along with the reasons/evidences etc. in respect thereof has not been compiled by the Office, as the details for each individual case is available in the IPO website
U.S. Follow-Up Question: Thank you for your reply.  Please explain how information might be found in India’s patent and patent application search systems (e.g., what databases and field of search may be used to search) showing trends related to bases for application and removal of 3(d) rejections, and trends in application of 3(d) rejections across technological fields. Has the IPO considered providing guidance which would reduce confusion as to what is needed to overcome a 3(d) rejection on the basis of therapeutic efficacy, and thereby promote innovation in affected fields and reduce waste of resources on patent filings which cannot be granted?
Reply: There should not be any confusion as to the rejection by applying the provision under section 3 (d) . First, the provision in Section 3 (d) along with the Explanation of the Indian Patents Act is clear enough to be easily understood for its contents. Second, the Indian courts at number of occasions , particularly the Supreme Court of India in its decision in Novartis case, have elaborated in detail on the issue. These decisions can be easily accessed online.
Recently on 27-2-2015, India has launched a new search facility "Indian Patent Advanced Search System (InPASS)", (http://ipindiaservices.gov.in/publicsearch) having Full Text Search Capability which facilitates login-free patent search for Published patent applications and Granted patents, Application status and E-Patent Register for the particular period selected. The search can be conducted utilising various search fields, either alone or in combination, namely, Title, Abstract, claims, Description, Application No., Patent Number, Applicant Name, Inventor name, Inventor country, Inventor address, Filing Office, PCT Application Number and International Patent Classification.
Further, the office of Controller General of Patents, Designs and Trademarks has published the Guidelines For Examination of Patent Applications. In in the Field Of Pharmaceuticals (October 2014) and Guidelines For Examination of Biotechnology Applications For Patents ( March 2013), which are available in IPO website. Besides, The decisions issued by the Controllers of Patents in various contested matters are also available in the official website.
It may be noted that there is no practice to specifically prepare and publish special type of data like trends related to bases for application and removal of 3(d) rejections, and trends in application of 3(d) rejections across technological fields, as mentioned. All types of applications are examined/granted/refused by uniformly applying the provisions of the Patents Act and Rules made thereunder and, no special or discriminative consideration is applied for the processing of certain type of cases, including for example, cases pertaining to section 3 (d) for grant/refusal. The details in respect of specific application/patent can be searched in the Search Portal available in the website.
Page 87, paragraph 3.219: The Secretariat’s Report indicates that it is not entirely clear how India intends to address the issue of safeguards against diversion that are part of both the August 2003 General Council decision and the subsequent protocol amending the TRIPS Agreement.
Q.96 Given that India has already implemented this type of compulsory licensing of pharmaceuticals, has India undertaken efforts or given consideration to anti-diversion measures, in light of the General Council decision and protocol for amending the TRIPS Agreement?
Reply: Section 92 A of the Indian Patent Act prescribes clearly that the Compulsory licence for export of patented pharmaceutical products shall be available for manufacture and export of such products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned production to address public health problems, only when the country under reference has already granted a compulsory licence or has, by notification or otherwise allowed importation of the patented pharmaceutical products from India.
The controller shall on receipt of an application in the prescribed manner, grant a compulsory license solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as specified and published by him.
Application for compulsory license can be made under Form 17 of the Patents Act and Rules.
However, no such compulsory licence has been granted in India so far.
U.S. Follow-Up Question: Thank you for the information provided related to India’s Section 92A compulsory licensing regime.  Please clarify whether India is not considering the implementation of anti-diversion measures as described in the General Council’s statement and protocol for amending the TRIPS Agreement.
Reply: This would be considered as and when required. The controller shall on receipt of an application in the prescribed manner, grant a compulsory license solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as specified and published by him.
3.3.5.5 Copyright
Page 93, 3.247: The Secretariat’s Report notes that "[n]otice and take-down procedures have been introduced to make internet service providers otherwise liable." Please describe the notice and take-down procedures to be followed by a copyright owner seeking removal of copyrighted material. Also, we note that Section 52(1)(c) states that the "person responsible for the storage shall refrain from facilitating such access for a period of twenty-one days or till he receives an order from the competent court refraining from facilitating access and in case no such order is received before the expiry of such period of twenty-one days, he may continue to provide the facility of such access."
Q.122 Has India adopted expedited procedures to allow a copyright owner to obtain a court order barring continued access within 21 days? If not, what is the average time it takes to obtain such an order through normal court processes?
Reply: Depending of the facts and circumstances of each case, the court will expedite the procedures to allow a copyright owner to obtain a court order within 21 days.
U.S. Follow-Up Question: Please describe the notice and take-down procedures to be followed by a copyright owner seeking removal of copyrighted material. This was asked in the original question, but may have been inadvertently overlooked in the response.
Reply: Rule No. 75 of Chapter XIV in Copyright Rule 1958 as amended in 2013, deals in Storage of Transient of Incidental copies of works. The Rules states that any owner of copyright may give a complaint in writing under clause (c) of sub-section (1) of section 52, to a person who has facilitated transient or incidental storage of work for providing electronic links, access or integration to restrain from such storage of work.
2. The written complaint shall contain the following particulars, namely:
a.The description of the work with adequate information to identify the work;

b.Details establishing that the complainant is the owner or exclusive licensee of copyright in the work;

c.Details establishing that the copy of the work which is the subject- matter of transient or incidental storage is an infringing copy of the work owned by the complainant and that the allegedly infringing act is not covered under section 52 or any other act that is permitted under the act;

d.Details of the location where transient or incidental storage of the work is taken place;

e.Details of the person, if known, who is responsible for uploading work infringing the copyright of the complainant; and

f.Undertaking that the complainant shall file and infringement suit in the competent court against the person responsible for uploading the infringing copy and produce the orders of the competent court having jurisdiction, with in a period of 21 days from the date of receipt of the notice.

3. On receipt of the written complaint, the person responsible for the storage of the copy, if satisfied from the details provided in the complaint that the copy of the work is an infringed copy, within thirty-six hour, take measures to refrain from facilitating such access for period of twenty-one days from the date of receipt of the complaint or till he receives an order from the competent court restraint him from facilitating access, whichever is earlier.
4. The person responsible for storage shall display a notice giving reasons for restraining such access to persons requesting for access to the alleged infringing copy.
5. The person responsible for storage may restore the storage of the work in case the complainant failed to produce the orders of the competent court having jurisdiction, restraining him from facilitating access.
6. In case the complainant fails to produce the orders of the competent court having jurisdiction within the stipulated period, the person responsible for storage shall not be obliged to respond to any further notice sent by the same complainant on the same work in the same location.

3.3.5.8 Trade Secrets and Test Data Protection
Page 95, paragraph 3.258: The Secretariat’s Report discusses India’s trade secret protection on the basis of principles of equity and common law. 
Q.124 Please identify how many cases were prosecuted in the last year and provide the identified cases. Also, under what principles of law does India protect against disclosure of trade secrets by third parties not party to any formal or informal contracts or confidence, and can examples of such cases be provided? What types of information may be protected as trade secrets under Indian law? What, if any, responsibility do enterprises have for protecting trade secrets from unauthorized disclosure?
Reply: India has federal set up with civil and criminal cases filed in various courts- at the district level in case of criminal enforcement and trade secret violations and in the high courts. The information on these cases is not maintained centrally.
India does not have a separate legislation governing trade secret protection. It relies on principles of contract law, and common law, to regulate protection of trade secrets. Indian courts have upheld trade secret protection on basis of principles of equity, upon a common law action of breach of confidence, as well as breach of contractual obligation. The remedies available to the owner of trade secrets is to obtain an injunction preventing the licensee from disclosing the trade secret, return of all confidential and proprietary information and compensation for any losses suffered due to disclosure of trade secrets.
Indian courts have relied on the principles laid out in the Saltman Engineering case to uphold the existence of an equitable doctrine of confidence, independent of contract to assess whether breach of confidence could have occurred. The case of John Richard Brady, where the defendant who had allegedly misused the confidential information entrusted to them by the plaintiff, tried to escape liability by pleading that the contract was neither concluded nor was it acted upon by the parties. The High Court of Delhi ruled that it must enforce the general rules of equity and restrain the breach of confidence. Thus, the Court invoked a wider equitable jurisdiction and awarded injunction even in the absence of a contract.
The Delhi High Court ruling in John Brady and the Saltman rationale have recently been applied by the Karnataka High Court in the case of Homag India.
Confidentiality and non-competition covenants are enforceable under Indian law and offer another line of defense in enabling protection of trade secrets and confidential information in India. Business contracts therefore typically provide for contracts that require the Indian service provider to (i) maintain the customer’s trade secrets and confidential information in strict confidence not only during the term of the contract but also after termination, (ii) permit controlled access on a "need to know" basis only, including the customer’s right to enforce such obligations directly against service provider personnel having access to the customer’s information, and (iii) be contractually responsible and liable for any breach of confidentiality obligation or misuse of such information by itself, its subcontractors, employees or former employees. Effective clauses in a contract provide that a service provider’s failure to comply with the confidentiality obligations would result in the service consumer to immediately terminate the contract and also claim damages.
Confidentiality and non-compete clauses in employment contracts are also common.

India’s Information Technology Act has also been rapidly evolving in order to grant protection for theft or misappropriation of electronic data. The Act provides for compensation, fine and imprisonment. Recently, the Department of Information Technology in Maharashtra ordered compensation of Rs. 60 lakhs for misappropriation of electronic data by an ex-employee of the complainant company and his new employer. Dealing with electronic crimes is an evolving area, and cases such as this indicate the ability of the legal and administrative machinery to deal with the same.
Penal action may be considered under the Indian Penal Code (IPC) for criminal breach of trust by an employee, when such employee misappropriates or dishonestly disposes of property entrusted to him, or which is under his control. Such a person can also be held liable for cheating, when he acts with the knowledge that he is likely to cause wrongful loss to a person whose interest he was legally bound (by contract or law) to protect. In both cases, the offence can be punished with fine or with three years of imprisonment or both.
U.S. Follow-Up Question: The case of John Richard Brady appears to have been provided in response to the question of the principles of law India protects against disclosure of trade secrets by third parties not party to any formal or informal contacts or confidence.  However, the facts provided in this case involve a defendant who had allegedly misused confidential information entrusted to the defendant by the plaintiff.  Accordingly, this case does not pertain to the disclosure or use of trade secrets by third parties not party to any formal or informal contract or confidence since in this case the defendant was entrusted with confidential information and was thus not a third party.  Please provide an example of a case wherein trade secret protection was provided for on the basis of principles of equity.
It is also noted that information of trade secret cases is not maintained centrally.  However, please provide a representative sample of cases that demonstrate the type of information that is protected as trade secrets under Indian law, including those showing a breach of contract, a breach of some other non-contractual duty, and those where there is no relationship between the parties. 
Reply: India has federal set up with civil and criminal cases filed in various courts- at the district level in case of criminal enforcement and trade secret violations and in the high courts. The information on these cases is not maintained centrally.
Government of India does not maintain a compilation of the cases.
Pages 95-96, paragraph 3.259: The Secretariat’s Report discusses compensation and damages ordered by Indian courts for the disclosure of trade secrets.
Q.125 Please identify the guidelines used by the courts to determine the quantum of compensation.
Reply: The quantum of compensation depends on the facts of the case as placed before the courts.
U.S. Follow-Up Question: It is noted that the quantum of compensation depends on the facts of the case as placed before the courts.  However, what is the general range of compensation and damages ordered by Indian courts?  Please provide examples of compensation. Please also provide a representative sample of cases where courts have discussed the basis of awarding specific compensation amounts. 
Reply: The Government does not maintain this centrally.
Page 96, paragraphs 3.261-3.262: The Secretariat’s Report discusses legislation for pharmaceutical test data protection and the TRIPS provisions on protection of such data from unfair commercial use.
Q.126 Please indicate India’s plans to implement unfair commercial use protection for undisclosed information relating to pharmaceutical products utilizing new chemical entities. Please also explain India’s plans to implement such protection for undisclosed information relating to agricultural chemical products utilizing new chemical entities.
Reply: Article 39.3 relates to the specific case when data pertinent for seeking approval of the authority is shared with the marketing regulator. The text of this Article does not specifically state that member countries would need to comply with the requirement of data exclusivity. It only states that the regulator will need to protect it from unfair commercial use. Therefore, no additional obligations which are not present in text can be interpreted. The obligation on the authorities is to keep the test data secret and not allow it to be accessed by third parties through unfair means. India complies completely with its obligations under Article 39.3 of TRIPS.
There is no decision yet on this issue.

U.S. Follow-Up Question: Thank you for your reply.  Article 39.3 of the TRIPS Agreement states in part: "the obligation on the authorities is to keep the test data secret and not allow it to be accessed by third parties through unfair means." The language of Article 39.3, however, also includes an obligation to protect relevant information from unfair commercial use. If India considers that it is in compliance with all Article 39.3 obligations, please explain how relevant information is protected from unfair commercial use in the marketplace.
Reply: The obligation on the authorities is to keep the test data secret and not allow it to be accessed by third parties through unfair means.
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