India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

outcomes, <strong>and</strong> lengthy <strong>and</strong> costly regulatory procedures. 12 U.S. <strong>and</strong> other global seed
firms report that stronger IPR protections are necessary to help recover these substantial
costs <strong>and</strong> to provide incentives for continued innovation. 13
IPR protection is considered crucial for all types <strong>of</strong> seeds, but particularly for new OPVs
<strong>and</strong> biotech seeds. The value <strong>of</strong> these types <strong>of</strong> seeds can be relatively easily appropriated;
OPVs can be saved <strong>and</strong> reused or shared among farmers, <strong>and</strong> the latest biotechnology
tools facilitate the reverse engineering <strong>of</strong> biotech seeds by commercial competitors. 14
Hybrids, which are created through the crossing <strong>of</strong> two or more parental lines, have some
built-in protection from appropriation by farmers as the seeds lose their superior yield
potential <strong>and</strong> other valuable characteristics after the first planting. 15 Moreover,
competitors cannot copy a hybrid without obtaining access to the parental lines used to
create it. 16 However, these built-in protection mechanisms have their limitations. Seed
production in <strong>India</strong> tends to be concentrated in geographic zones with favorable
agronomic conditions; the presence <strong>of</strong> many competing firms working in a relatively
small area creates numerous opportunities for misappropriation. 17 U.S. <strong>and</strong> other global
firms report that they are cautious about developing <strong>and</strong> marketing hybrids in <strong>India</strong>,
particularly seeds that are produced by only a single cross <strong>of</strong> parents, preferring multiple
crosses to make unauthorized access to the parental lines more difficult. 18
Plant Variety Protection
The WTO Agreement on the Trade-Related Aspects <strong>of</strong> Intellectual Property Rights
(TRIPS Agreement) requires that members protect plant varieties with patents, an
effective alternative system, or both. 19 A limited number <strong>of</strong> countries, including the
United States, use both patents <strong>and</strong> an alternative system to protect plants. Most
developing countries have chosen not to <strong>of</strong>fer patent protection <strong>and</strong> instead provide an
alternative system, relying on the model supplied by the International Union for the
Protection <strong>of</strong> New Varieties <strong>of</strong> Plants (UPOV) (box 9.1).
12 According to BIO, “it can take ten to fifteen years <strong>and</strong> tens <strong>of</strong> millions <strong>of</strong> dollars to commercialize an
agricultural biotechnology product.” BIO, written submission to the Commission, June 26, 2009, 2. See also
Monsanto <strong>India</strong> Ltd., Annual Report 2007–2008, 2009, 10; Maskus, “Intellectual Property Rights in
Agriculture,” December 2004, 721; <strong>and</strong> Gracen, “How Intellectual Property <strong>and</strong> Plant Breeding Come
Together,” 2007, 1820–23.
13 Industry representatives, interviews by Commission staff, New Delhi, <strong>India</strong>, May 4, 5, 6, <strong>and</strong> 9, 2009;
industry representatives, interviews by Commission staff, Mumbai, <strong>India</strong>, May 11 <strong>and</strong> 12, 2009; industry
representatives, telephone interviews by Commission staff, January 21, March 30, <strong>and</strong> June 10, 2009; <strong>and</strong>
BIO, written submission to the Commission, June 26, 2009, 2.
14 Maskus, “Intellectual Property Rights in Agriculture,” December 2004, 721.
15 Industry representative, telephone interview by Commission staff, June 10, 2009.
16 World Bank, Intellectual Property Rights, 2006, 7.
17 Tripp, Louwaars, <strong>and</strong> Eaton, “Plant Variety Protection,” 2007, 360.
18 Industry representative, telephone interview by Commission staff, June 10, 2009.
19 TRIPS, art. 27.3(b).
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