Page:Special 301 Report 2015.pdf/57

 enforcement operations designed to deter and interdict shipments of IPR-infringing goods destined for the United States.

Localization Trends

The United States remains concerned about actions and policies in India that appear to favor local manufacturing or Indian IPR owners in a manner that distorts the competitive landscape needed to ensure the development of globally-successful and innovative industries. For example, under India's Drug Price Control Order (DPCO), the National Pharmaceutical Pricing Authority implemented pricing restrictions on 509 drug formulations, effective April 1, 2015. However, exemptions from those restrictions allow certain medicines that are manufactured in India and "developed using indigenous R&D," to be priced higher, providing an advantage to Indian companies. In addition, the Indian Intellectual Property Appellate Board's interpretation of Section 84 of India's Patents Act suggests that a patent could be subject to a compulsory license if the patented product is not manufactured in India. Further, despite a Central Drug Standard Control Organization Office Order on waiver of local clinical trial requirements, industry still faces inconsistent application of requirements for local clinical trial data for approval of new drugs. In the information and communications technology sector, U.S. industry cites in-country testing requirements and data- and server-localization requirements as inhibiting market access in India.

The United States continues to press India in our bilateral dialogues, including through the IPR Working Group, to address the concerns identified in this Report. The United States will prioritize the achievement of substantive and measurable results that benefit both the United States and India.

PAKISTAN

Pakistan remains on the Priority Watch List in 2015 as there have not been significant improvements in its overall IPR protection. Most critically, Pakistan has not yet fully implemented key provisions of the Intellectual Property Organization of Pakistan Act of 2012 (IPO Act). In particular, Pakistan has yet to establish fully the specialized intellectual property tribunals provided for under the IPO Act. Pakistan should ensure that its enforcement officials can exercise ex officio authority without the need for a formal complaint by a rights holder and should provide for deterrent-level penalties for criminal IPR infringement. Due, in part, to a lack of effective enforcement, widespread counterfeiting and piracy of pharmaceuticals, printed materials, optical media, digital content, and software continue to present serious concerns for U.S. industry. Pakistan should also take the necessary steps to reform its copyright law to address the piracy challenges of the digital age and to reform its trademark legislation to meet international standards and to streamline the registration process. The United States continues to encourage Pakistan to provide an effective system for protecting against unfair commercial use, 52