India was among the 14 countries, including Pakistan and Russia, which remained on the 'Priority Watch Lis't of the United States for "inadequate and ineffective" enforcement of patent laws.

A report by the US Trade Representative's office said that the European Union, India and 13 other countries were on Priority Watch List for shortcomings in enforcing intellectual property protection. Thirty-four other countries were on a "watch list" under Section 301.

Besides India and EU, 'Priority Watch List' nations were Argentina, the Bahamas, Brazil, Egypt, Indonesia, South Korea, Kuwait, Lebanon, Pakistan, the Philippines, Russia, Taiwan and Turkey.

While India has improved its Intellectual Property Rights regime, protection of intellectual property in some areas remains "weak due to inadequate laws and ineffective enforcement," the annual Special 301 report said.

India's 2002 patent law amendments, which became effective in May 2003, exempt subject matter such as biotechnological inventions, methods for agriculture and horticulture, processes for the treatment of humans, animals, or plants, and substances prepared by chemical processes from patent protection, it said.

Under the Trade Related Intellectual Property Rights agreement, India has until January 1, 2005 to provide product patent protection, including for pharmaceuticals and agricultural chemicals.

While the United States is encouraged by the Indian government's recent statements concerning implementation of data exclusivity regulations, India has yet to implement the

TRIPS obligation to protect confidential test data submitted by innovative pharmaceutical companies for market approval, the report said.

It said India's Copyright Act has three overly broad exceptions, which together weaken protection of software.

"India is also in the process of revising its copyright law to implement the WIPO Internet treaties; we expect India to fully implement its obligations in this regard. Protection of foreign trademarks remains difficult due to procedural barriers and delays."

The report said that trademark owners must prove they have used their mark to avoid a counterclaim for registration cancellation due to non-use. "Such proof can be difficult, given India's policy of discouraging foreign trademark use."

Companies denied the right to import and sell products in India often are unable to demonstrate use of registered trademarks through local sale, it said.