Innovation stifled by IP issues in Pakistan: USTR report

KARACHI: Despite improvements in intellectual property (IP) enforcement efforts and updates to IP laws, piracy and counterfeiting remain widespread in Pakistan in industries ranging from pharmaceuticals and digital content and software, says the Office of the United States Trade Representative (USTR)’s 2024 Special 301 Report.

The report is an annual review of the state of intellectual property (IP) protection and enforcement in US trading partners around the world. As such, Pakistan is one of 20 countries currently on the USTR’s Watch List, having been removed from the Priority Watch List in 2023.

While this shows an improvement in terms of compliance with IP rights standards, with the USTR report praising the establishment of IP rights tribunals in at least five cities in the country as of 2023 and the progress made by the Competition Commission of Pakistan in cases involving counterfeit trademarks and other anti-competitive violations, significant issues remain. This includes inconsistency of rulings and confusion over standards when it comes to the IP rights tribunals, limited jurisdiction to adjudicate criminal complaints for IP violations, and a lack of deterrent-level penalties.

The gaps in the IP enforcement regime impact the overall innovation ecosystem in Pakistan. The 2023 Global Innovation Index (GII), which aims to capture the innovation ecosystem performance of 132 economies and tracks the most recent global innovation trends, ranks the country at 88 on a global level and fifth on a regional level. This puts Pakistan two spots outside the leading innovation economies in the lower-middle income group including India, Vietnam and Ukraine, while leaving it far behind world leaders in innovation.

According to Asad Baig, director of Media Matters for Democracy and the Media Lab, “as long as IP rights are not properly protected or enforced, international players will remain wary of entering Pakistan”. He also highlighted how piracy is often tied to lack of accessibility and ease of access when it comes to digital technology in Pakistan, saying “if for example a laptop with licensed software costs above a certain amount, many people will not be able to access it. This is an area that government policy must focus on to expand access to technology”.

Another point raised by Baig was the narrow focus of digital policymaking in Pakistan on politics and censorship of social media platforms at the expense of broader concerns like IP and how to create a conducive environment for innovation. “The lack of an encouraging policy framework to boost innovation and digital businesses leads to people leaving Pakistan to where they can do business more easily and with more clarity”.

Talking to The News, IP rights, media and technology lawyer Ali Kabir Shah pointed to stagnant human capital as another factor holding back the innovation ecosystem, highlighting the lack of women’s participation in the economy in particular, saying that the dearth of investment in education must be addressed.

These concerns are backed by the GII rankings. Although Pakistan overperforms relative to its income level overall with its 88th ranking, it ranks at 113 in terms of Institutions, a sub-category that takes into account the institutional and regulatory environment, and 117 when it comes to Human Capital and Research.