[Federal Register Volume 63, Number 101 (Wednesday, May 27, 1998)]
[Notices]
[Page 29053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13977]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-106]


Determination Under Section 304 of the Trade Act of 1974: 
Practices of the Government of India Regarding Patent Protection for 
Pharmaceuticals and Agricultural Chemicals

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of determination, termination and monitoring.

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SUMMARY: The United States Trade Representative (USTR) has determined 
that certain acts, policies and practices of India violate, or 
otherwise deny benefits to which the United States is entitled under, 
the Agreement on Trade-Related Aspects of Intellectual Property Rights 
(TRIPS Agreement). This determination is based on the report of a 
dispute settlement panel convened under the auspices of the World Trade 
Organization (WTO) at the request of the United States, and the report 
of the WTO Appellate Body reviewing the panel report. The Appellate 
Body report and the panel report (as modified by the Appellate Body 
report) were adopted by the WTO Dispute Settlement Body (DSB) on 
January 16, 1998 (``the WTO reports''). On February 13, 1998, India 
stated its intention to comply with its WTO obligations with respect to 
this matter and, on April 22, 1998, stated that it would amend its law 
no later than April 19, 1999. In light of he foregoing, the USTR will 
not take action under section 301 of the Trade Act of 1974 (''the Trade 
Act'') at this time and has terminated this investigation. However, the 
USTR will monitor India's implementation of the WTO reports, and will 
take action under section 301(a) of the Trade Act if India does not 
come into compliance.

EFFECTIVE DATE: May 8, 1998.

ADDRESSES: 600 17th Street, N.W., Washington, D.C. 20508.

FOR FURTHER INFORMATION CONTACT:
Claude Burcky, Director of Intellectual Property (202) 395-6864; 
Geralyn S. Ritter, Assistant General Counsel (202) 395-6800.

SUPPLEMENTARY INFORMATION: On July 2, 1996, the USTR initiated an 
investigation under section 302(b) of the Trade Act (19 U.S.C. 2412(b)) 
regarding India's provision of patent protection for pharmaceutical and 
agricultural chemical products, and requested public comment on the 
issues raised in the investigation and the determinations to be made 
under section 304 of the Trade Act. (61 FR 35857 of July 8, 1996). This 
investigation specifically concerned India's failure to comply with its 
obligations under Articles 70.8 and 70.9 of the TRIPS Agreement to 
establish a ``mailbox'' mechanism for filing product patent 
applications for pharmaceuticals and agricultural chemicals, and to 
provide a system of exclusive marketing rights for these products. As 
required under section 303(a) of the Trade Act, the United States held 
consultations with India under the procedures of the WTO Understanding 
on Rules and Procedures Governing the Settlement of Disputes (DSU) on 
July 27, 1996. A dispute settlement panel was established on November 
20, 1996.
    Pursuant to Section 304(a)(1)(A) of the Trade Act (19 U.S.C. 
2414(a)(1)(A)), the USTR must determine in this case whether any act, 
policy or practice of India violates, or otherwise denies benefits to 
which the United States is entitled under any trade agreement. If that 
determination is affirmative, the USTR must take action under section 
301 of the Trade Act (19 U.S.C. 2411), subject to the specific 
direction of the President, if any. However, pursuant to section 
301(a)(2)(B), the USTR is not required to take action under section 301 
if the USTR finds, inter alia, that the foreign country is taking 
satisfactory measures to grant the rights of the United States under 
the trade agreement.

Reasons for Determinations

(1) India's Acts, Policies and Practices

    The WTO panel in this case released its report on September 5, 
1997, and found that India had failed to comply with its obligations 
under Articles 70.8 and 70.9 of the TRIPS Agreement. India appealed all 
of the panel's adverse findings. On December 19, 1997, the Appellate 
Body issued its report confirming all the major panel findings against 
India, and reversing the panel report on a procedural issue regarding 
the panel's jurisdiction to consider claims outside its terms of 
reference. On January 16, 1998, the DSB adopted the Appellate Body and 
the panel report (as modified by the Appellate Body report). The WTO 
reports include findings that India has failed to comply with Article 
70.8 of the TRIPS Agreement because it has failed to establish a 
legally secure mailbox system for filing patent applications for 
pharmaceutical and agricultural chemical products that preserves the 
novelty and priority of those applications. The WTO reports also 
include findings that India was obligated as of January 1, 1995, to 
have established a system for granting exclusive marketing rights for 
certain products that are the subject of mailbox application, and that 
India had failed to establish such a system in violation of Article 
70.9 of the TRIPS Agreement.
    Thus, based on the results of the WTO dispute settlement 
proceedings, the public comments received and appropriate 
consultations, the USTR has determined that certain acts, policies and 
practices of India violate, or otherwise deny benefits to which the 
United States is entitled under, the TRIPS Agreement.

(2) U.S. Action

    At a meeting of the DSB on February 13, 1998, India stated its 
intention to ``meet it obligations under the WTO with respect to this 
matter'' and ``to comply with the recommendations and rulings of the 
DSB.'' At the DSB meeting on April 22, 1998, India committed to amend 
its law to meet its TRIPS obligations ``as early as possible,'' and no 
later than April 19, 1999. In light of India's commitment to implement 
its WTO obligations, pursuant to section 301(a)(2)(B)(i) of the Trade 
Act, the USTR will not take action at this time under section 301(a) of 
the Trade Act and has terminated this investigation. However, pursuant 
to section 306 of the Trade Act, the USTR will monitor India's 
implementation of the WTO reports and will take action under section 
301(a) of the Trade Act if India does not come into compliance.
Irving A. Williamson,
Chairman, Section 301 Committee.
[FR Doc. 98-13977 Filed 5-26-98; 8:45 am]
BILLING CODE 3190-01-M