NEW DELHI: The government is readying for a fresh battle with the US at the World Trade Organization (WTO) in the wake of the continued pressure over its intellectual property rights (IPR) regime. Even as the US International Trade Commission (USITC) and USTR hear arguments against India, the government is ready with a strategy that will enable it to challenge the American decision if India is designated a "priority foreign country" (PFC), a tag that was given to Ukraine, sources familiar with the discussions said.

Apart from the stigma, as PFC status is assigned to countries with very poor IPR standards, it carries the risk of concessional duties being withdrawn under the US general system of preferences programme. India was last classified as PFC from 1991 to 1993 and since then it has undertaken several measures, including a revamped law and stricter enforcement, which the USTR will snatch away with one act. In fact, Ukraine was the first country to be accorded the classification in seven years.

The law allows the US to initiate investigation and seek consultations for resolution, which in India's case can include a review of the IPR regime that allows the authorities to deny patent if they the believe that there is no new discovery or invention. The US is also worried over the decision to waive the patent rights for a cancer drug and allow and Indian company to sell a cheaper version in the market. It fears that similar steps will be taken by several other countries.

India has rejected the US investigations saying that no country can initiate action unilaterally, under its own laws. "If there is a dispute, it has to be settled at a multilateral forum like the WTO. No country can apply its own law extra-territorially," said an official, privy to the discussions, a day before the newspaper first reported India's aggressive posture. "If there is any action by the US, we will challenge it at the WTO," a senior official said on Monday.

