BRITAIN signed a ground-breaking treaty with India over the management and enforcement of intellectual property rights (IPR) yesterday in a move to stimulate investment in the subcontinent by UK companies fearful of piracy.

Lord Sainsbury, the Science Minister, spent the day in London with Kamal Nath, the Indian Minister of Commerce and Industry, thrashing out the finer details of a joint statement of intent that for the first time presents a formal framework for bilateral co-operation on copyright issues.

Lord Sainsbury said: “Intellectual property is of great importance in enabling successful innovation, economic growth and partnerships in research and investments to take place. This formalises the commitment in both countries to creating the conditions for mutually beneficial trade and industry relations.”

The pact centres on four main areas of development: training patent office staff in India; teaching IPR in Indian universities, law schools and business schools; raising general awareness of IPR; and enforcing patents and handling infringements.

The initiative is the culmination of work begun under Patricia Hewitt when she was Trade and Industry Secretary. IPR infringement was highlighted as an urgent issue during Tony Blair’s visit to India with leading British businessmen last September. The two countries increased co-operation between their respective oil and film industries, as well as increasing aviation links, but an agreement on the burgeoning and hugely valuable IPR industry, especially in the pharmaceutical and publishing sectors, was critical to Mr Blair fulfilling his pledge to boost foreign direct investment in India by $15 billion (£8 billion).

India continues to be viewed by some multinational companies as a competitive threat rather than a commercial opportunity. It is still the world’s largest manufacturer of generic drugs in laboratories operating at a fifth of the cost of their European equivalents, although products made after 1995 do enjoy some protection after the reform of patent laws last year to fulfil India’s commitment to World Trade Organisation directives.

Such copycatting, which Sir Richard Sykes, former chief executive of GlaxoSmithKline (GSK) now Rector of Imperial College, London, likened to 17th-century piracy, is a problem that extends beyond the pharmaceuticals business. More bootleg whisky is sold in India than the real thing, for example, much to the annoyance of Scottish distillers.

Ron Marchant, chief executive of the Patent Office, said: “This statement of intent is a breakthrough and it will encourage investment. One of the things foreign investors want is an IP regime that does allow leakage into the local economy. This will reassure British companies.”

There is evidence of new investor confidence in India. GSK and Novartis are among the global players to have formed research partnerships with Indian companies.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive