Remarks on the Intellectual Property Ecosystem in India

Charles H. Rivkin
Assistant Secretary, Bureau of Economic and Business Affairs
Federation of Indian Chambers of Commerce and Industry
New Delhi, India
March 15, 2016

Thank you for the introduction, Dr. Singh. It is an honor to be in Delhi with you this morning. Thank you all for attending and I want to thank the Federation of Indian Chambers of Commerce and Industry for organizing the event.

As I flew into Delhi, and I was thinking about how best to talk about intellectual property rights and protections, I started thinking about cricket.

The reason was: I know that India is absolutely mad about cricket. I also know that Americans are just as passionate about baseball. And it occurred to me that there are more similarities between both sports than we realize.

For example, you call it a pitch. We call it the diamond. But we both love to watch the players step out on to a lush green field.

You call them wickets. We call them bases. But we love to watch players running like mad between them to earn runs.

You call them “sixes.” We call them “home runs.” But the crowd rises to its feet when someone sends a ball soaring into the air – over the boundary or out of the park.

The point is, we love our respective national games. We appreciate their beauty. We admire athletes performing at their best. And we love the thrill of competition.

And it seems much more enlightening to think about the things that connect us than the superficial differences that set us apart.

I mention cricket and baseball because Americans and Indians share common cause in so many things.

We are the world’s two largest democracies. We are two of the world’s biggest economies. We have many of the same values and principles. And those include the freedom to be innovative and the right to own what we create.

As some of you may know, I worked for twenty years in the media industry in Hollywood. I managed television, film and animation companies before joining the State Department.

Creativity and innovation were absolutely central to the success of the businesses I managed. So was the certainty that the movies or television programs or merchandizing products that we made were protected from piracy and theft.

The same principle holds true for any business, industry or economy in the United States, in India, and around the world.

When economies safeguard patents, trademarks and copyrights, they create an atmosphere of safety and certainty which encourages more innovators to come forward and create.

When more people are allowed to innovate without fear of theft, they contribute to the economic growth, the jobs and the better futures that our young citizens need to negotiate successful paths through the twenty-first century.

That is why we put such a premium on intellectual property rights in the United States.

It’s also why we are committed to working with the Government of India and Indian industries to help modernize India’s IP system and promote polices that support IPR protections.

We know that Prime Minister Modi shares these values. Just two months ago, when he launched the Startup India initiative, he emphasized the importance of easing the process to start a business, and fostering innovation and entrepreneurship through academia-industry partnerships. And he also underscored the importance of intellectual property rights to achieving these outcomes.

His administration has also been working to create a National IPR policy that could help undergird those fundamental rights.

More than a year ago, they shared a draft of that policy with us, asking for recommendations. We offered our suggestions and we eagerly await its eventual release.

A reformed policy will benefit and encourage Indian entrepreneurs and send a positive signal to the world. That message will say: India protects intellectual creative ownership, and values innovation as a central component of a booming economy.

That will be an encouraging sign for all creative industries that depend on copyrights; for technology companies that depend on patents; and for investors who depend on business friendly climates to open new businesses.

I hear it from American companies all the time: Greater IPR rights and enforcement will foster greater investment and commercial partnerships which, in turn, will generate greater trade and investment between our countries.

IPR protections benefit all of us. And it seems to me, few examples could be more illustrative about our common cause – especially with regard to intellectual property rights – than Bollywood and Hollywood.

Just like cricket and baseball, it may seem as though both industries are different. But essentially they need the same things.

Both industries depend on copyright protection to do business. And we have technology industries that depend on patents to do business and pay their employees, bring safe, reliable and trusted services to consumers.

And both industries are being badly hurt by piracy and theft.

As I always like to emphasize, an industry isn’t some abstraction. It supports livelihoods. And that’s not just the Shah Rukh Khans and the Tom Cruises, but the people that develop, produce, distribute, or promote motion pictures and television programs.

It’s also the carpenters, the hair dressers, the electricians and even the ushers at Wave Cinemas at TDI Paragon Mall.

Their livelihoods depend on the creation of these films that enrich our lives. And they lose when digital piracy takes hold, whether it’s people illegally filming movies with camcorders, or everyday consumers downloading “free” movies or using illegal streaming services.

Consumers lose, too, because those losses from piracy and illegal downloading ultimately lead to fewer and lower quality entertainment options from which to choose.

The Motion Picture Association of America says that they lose 40 percent of expected revenue from international piracy.

Indian film studio owners lose even more. They say that they can only reliably make money in the first few days of a theatrical release because people see that those movies are illegally online.

New legislation has been drafted here, which the United States and Indian governments both support. The United States and Indian movie industries also support this legislation.

The current draft also protects theater owners who were threatened with loss of their operating licenses for failure to adequately police theatres.

This is a step in the right direction. And we are also ready to offer our support to push stronger, specialized IPR courts to handle appeals of decisions relating to trademark, patents and geographical indication applications and registrations.

This, again, is something we agree upon.

We are also happy to learn that Parliament passed a few key economic bills in December, including the creation of Commercial Courts within India’s High Courts.

These measures will improve the ease of doing business in India and facilitate resolution of commercial disputes.

As we understand, ‘commercial dispute’ has been very broadly defined to encompass a wide range of commercial transactions, including intellectual property rights.

These moves to strengthen arbitration law in India are a good step toward resolving many of the problems that have afflicted Indian arbitration and will inspire greater confidence among foreigners that their investments in India will be protected.

Continued success in these areas would stimulate more Foreign Direct Investment, enabling more companies from the U.S. and around the world to “Make in India.” It would also mean the exchange of artists and behind-the-camera workers.

Intellectual property theft doesn’t only apply to the movie industries, of course. Two years ago, FICCI measured the impact of counterfeiting and smuggling on seven key industries. Those included automotive parts, alcohol, computer hardware, personal goods, packaged foods, mobile phones, and tobacco products.

In a study coauthored with the International Chamber of Commerce, FICCI concluded that people holding patent rights lost approximately 22 percent in average sales losses. Altogether, that meant that these seven sectors lost almost $12 billion in 2012.

The same study estimated the Indian government’s economic loss tied to these illicit activities that year totaled approximately $4.26 billion.

Imagine the effect on India’s economic growth if those seven sectors had made an additional $12 billion – and the Indian Government had more than $4 billion in its public coffers.

Those are the stakes. That is what intellectual property protection can do for an economy. It brings money back. It restores livelihoods. And it supports the economic growth that both our countries need.

At the bidding of Secretary Kerry, I have come here with a delegation of U.S. companies. We are calling it the “American Innovation Roadshow."

The idea is to engage with business people like yourselves, as well as key government officials, to promote innovation and entrepreneurship as drivers of inclusive economic growth, jobs and security.

By working with the Indian government and the private sector, we believe we can address many of the challenges that we all face, such as intellectual property rights, to achieve those outcomes.

Ultimately, our common cause can, and must, be the source of our shared efforts moving forward.

You know, one of America’s greatest innovators, Thomas Edison, once said: “Many of life's failures are people who did not realize how close they were to success when they gave up.”

At its best, innovation has always been humankind’s most resourceful tool – not only to face adversity head-on but to usher in new eras of mutual prosperity and benefit for all people.

When we think about India’s enormous potential, the scale and dimension of our partnership, and the enduring tradition of our shared entrepreneurial spirit, I have no doubt that we are closer to success than we realize.

Thank you.