The International IP Index Rankings by the US Chamber of Commerce: Some Useful Insights, Many Caveats

According to the 2023 International IP Index published by the Global Innovation Policy Center of the U.S. Chamber of Commerce, India has been ranked 42 out of 55 countries with an overall score of 38.64%, (19.32 out of 50).

The International IP Index Rankings by the US Chamber of Commerce: Some Useful Insights, Many Caveats

According to the 2023 International IP Index published by the Global Innovation Policy Center of the U.S. Chamber of Commerce, India has been ranked 42 out of 55 countries with an overall score of 38.64%, (19.32 out of 50). The U.S. Chamber of Commerce Global Innovation Policy Center is the largest business federation in the world, representing the interests of over 3 million businesses of varying sizes, sectors, and geographical locations, along with state and local chambers and industry associations. The International IP Index assesses the intellectual property framework in 55 economies worldwide using 50 distinct indicators divided into 9 broad categories as benchmarks. With Japan, securing the top rank, India ranks 12th in the Asia region, whereas China ranks 7th.

Geographic Coverage of the Index (Source: International IP Index, 2023)

Patents, Related Rights, and Limitations: 23 economies scored 70% or higher and 30 economies scored 50% or higher. The category had an average score of 59.31%, making it the fifth-highest-scoring category overall. Singapore was ranked first in the category, while India ranked 46th with a score of 33.17%.Copyrights, Related Rights, and Limitations: 30 of the evaluated economies have scored 50% or more on the copyright indicators, with the average score in this category being 49.70%. The United States has secured the highest rank in this category, while India has been placed in the 34th position with a score of 38.86%.Trademarks, Related Rights, and Limitations: Only 10 of the economies received a score of less than 50% in this category. On average, the score for this category was 62.39%. The United States was ranked first, while India came in at 32nd place with a score of 56.25%.Design Rights, Related Rights, and Limitations: According to the Index, the majority of economies have established statutory laws that outline design rights and specify a duration for registered design rights' protection. The average score for this category is 63.77%. The United Kingdom received the highest score in this category, while India ranked 31st with a score of 55%.Trade Secrets and the Protection of Confidential Information: Only 23 economies managed to score 50% or more in this category. On the other hand, 22 economies scored 33.33% or less. The average score for this category is the lowest on the Index, at 48.97%. Switzerland ranked first in this category, while India ranked 49th with a score of 16.65%.Commercialization of IP Assets: 20 economies fell short of achieving a score of 50% or higher, and among them, 13 scored 33.33% or lower in a specific category. On average, the overall score in this category was 58.62%. Israel obtained the highest score in this category, while India ranked 39th with a score of 41.67%.

Enforcement: Out of the economies surveyed in the Index, most of them face challenges in this particular category, with only 23 of them receiving a score of 50% or higher. Furthermore, only 11 economies managed to achieve a score of 75% or more. On average, the score obtained in this category is 50.10%. The United States is ranked at the top of this category, while India is placed in the 44th position with a score of 25.14%.                    

Systemic Efficiency: In this category, several economies excel and score above 70%, including Brazil, Colombia, India, and the Philippines. On average, the category scores highly on the Index, with a strong score of 62.73%. South Korea ranks the highest in this category, while India is placed in the 24th position with a score of 70%.Membership and Ratification of International Treaties: Numerous economies have achieved high scores, with 22 of them reaching 75% or above and 14 of them exceeding 96%. Overall, this category has consistently performed well on the Index, with an average score of 62.70%. The United States ranks first in this category, while India ranks 47th with a score of 28.57%.

Radar graph, showing India’s comparison to the average score of Asia and the Top 10 economies’ average (Source: International IP Index, 2023)

The above radar graph shows the comparison of India’s performance based on different indicators with that of the average score of Asian countries and the average of the top 10 economies. The scale is ranged from 0-100% (the overall score is the percentage form). 0 is the lowest score where as 100 is the highest. India has an overall score of 38.64%, (19.32 out of 50), whereas Asia's average score of 56.42% and 91.06% is the average overall score of the top 10 economies.

Key Areas of Strength: India (as per report)

India has made significant strides in intellectual property law and enforcement. In October 2020, the Indian government simplified the process for submitting Form 27 under the Patent Act 1970, making it easier for patentees to file for multiple related patents and requiring them to disclose the quantum and value of the patented product. The deadline for submitting the working statement was also changed to the financial year, improving efficiency and bringing the process in line with modern technologies. To combat online copyright infringement, Indian courts can issue dynamic injunctions, which allow plaintiffs to seek an injunction against websites or online platforms that infringe their copyrighted material, even if the infringing content is not currently available on the platform at the time of filing the lawsuit. This is seen as an effective remedy to address online copyright infringement.

The PPH program between India and JPO is a positive development that promotes innovation and streamlines the patent application process. The program allows for expedited examination of patent applications in both countries, reducing time and costs, and encouraging cooperation and knowledge exchange between patent offices. India also provides generous R&D and IP-based tax incentives and is a global leader in targeted administrative incentives for the creation and use of IP assets by SMEs. Finally, India has made significant efforts to raise awareness of the negative impact of piracy and counterfeiting.

Brief on National IP Ecosystem as per the Index report

In recent years, the Indian government has made efforts to improve its national intellectual property (IP) environment, including reducing processing times for patent and trademark applications. The National Intellectual Property Rights Policy released by the Ministry of Commerce and Industry and the Department of Industrial Policy and Promotion in 2016 addressed several gaps in India's IP environment, such as the need to strengthen administrative capacities at IP offices. Despite the improvements, there are still significant delays and processing times for patent and trademark applications.In 2022, the Prime Minister's Economic Advisory Council (EAC-PM) issued a report highlighting the importance of a robust patenting system to support technological innovation and scientific research. The report recognises that India is experiencing a surge in start-ups and unicorns, and an efficient IP system is essential for a healthy start-up ecosystem. The EAC-PM report calls for additional examiners, investments, and clear delineation of processing time frames and deadlines to improve the performance of the Office of the Controller General of Patents, Designs, and Trademarks.The report also highlights the detrimental impact of the opposition system on patent processing times. Section 25 of the Patents Act outlines the procedures and requirements for initiating opposition proceedings. The pre-grant opposition mechanism in India has been criticised for significantly adding to the already lengthy patent prosecution timelines. The EAC-PM report suggests defining clear timelines during patent prosecution, including for opposition proceedings, to address this issue.

However, the report does not address the need for more extensive legislative reform, such as addressing the challenges and uncertainties rights holders face in protecting their patent rights in the biopharmaceutical sector or introducing international best practices and new sector-specific IP rights. Nonetheless, the proposed reforms have the potential to improve India's national IP environment and lead to a score increase on the Index, which will continue to monitor these developments in 2023.

The Ministry of Electronics and Information Technology issued proposed amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 in June 2022. The amendments are aimed at significant social media intermediaries and platforms and aim to clarify the rights and responsibilities of users and providers of online services. While not specific to copyright and the creative industries, the rules reference IP rights and copyright infringement. Intermediaries are obligated to inform users of their rules and conditions of use, including the illegality of any illicit activity conducted over or through the platform, such as copyright infringement. However, it is unclear how these proposed rules would interact with existing legislation, such as the Information Technology Act and the Copyright Act, and existing case law.Under the current laws, the notice-and-takedown mechanism only requires intermediaries to expeditiously remove infringing material upon notification.

The burden on intermediaries for copyright infringement is less pronounced, with any removal being only for an initial period of 21 days, with a court order required for any further action. Existing case law has explicitly stated that no burden or requirement exists under either law for intermediaries to take proactive action against potentially infringing activity. The 2015 Supreme Court decision Shreya Singhal v. Union of India held that it was not up to the intermediary to make a judgment as to the potential infringing nature of a piece of information referred to in a notice. Rather, the determination needed to be made through the judiciary, and a court order needed to have been passed asking the intermediary to expeditiously remove or disable access to certain material.Exceptions and limitations to copyright in India are interpreted broadly and are outside of international standards as established through the Berne three-step test.

The 2012 Copyright Act amendments broadened India's exceptions in a manner that seems to be incompatible with the Berne three-step test, specifically the expansion of the private use exception to "private and personal" use. India also expanded its compulsory and statutory license regime for the use of copyrighted works under Article 31(D), which refers to the use of musical works and sound recordings for radio and television broadcasting. Rights holders have repeatedly pointed out that the net effect of the expansion of copyright exceptions is to negate the exclusive rights of copyright owners and to imperil the legitimate markets for creative works.

Limited Scope of the Index

The International IP Index, 2023 released by the U.S. Chamber of Commerce Global Innovation Policy Center is limited in scope. The Index primarily reflects the interests of U.S. companies and may not fully represent the priorities of other countries. The index focuses too heavily on intellectual property rights and does not take into account the broader economic and social factors that contribute to innovation and creativity. The Index places too much emphasis on intellectual property protection as a measure of innovation and competitiveness while ignoring other important factors such as investment in research and development, education, and infrastructure.

The Index fails to take into account the unique challenges faced by developing countries, which may not have the resources or infrastructure to fully protect and enforce intellectual property rights.

The index fails to account for the diverse economic and social contexts in which intellectual property laws are implemented and the varying levels of development among countries. It seems like the U.S. Chamber of Commerce is promoting the interests of its member companies, which are largely based in developed countries, at the expense of the needs and priorities of developing countries as the worldview of the index is US-focused.Overall, while the International IP Index can provide some useful insights into the intellectual property landscape around the world, it is important to consider its limitations and potential biases when interpreting its results.