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Protection of Property Rights
Though Pakistan’s legal system supports the enforcement of property rights and both local and foreign owner interests, it offers incomplete protection for the acquisition and disposition of property rights. With the exception of the agricultural sector, where foreign ownership is limited to 60 percent, no specific regulations regarding land lease or acquisition by foreign or non-resident investors exists. Corporate farming by foreign-controlled companies is permitted if the subsidiaries are incorporated in Pakistan. There are no limits on the size of corporate farmland holdings, and foreign companies can lease farmland for up to 50 years, with renewal options.
The 1979 Industrial Property Order safeguards industrial property in Pakistan against government use of eminent domain with insufficient compensation for both foreign and domestic investors. The 1976 Foreign Private Investment Promotion and Protection Act guarantees the remittance of profits earned through the sale or appreciation in value of property.
Though protection for legal purchasers of land is provided, even if unoccupied, clarity of land titles remains a challenge. Improvements to land titling have been made by the Punjab, Sindh, and Khyber Pakhtunkhwa provincial governments dedicating significant resources to digitizing land records.
Intellectual Property Rights
The Government of Pakistan has identified intellectual property rights (IPR) protection as a key economic reform and has taken concrete steps over the last two decades to strengthen its intellectual property (IP) regime. In 2005, Pakistan created the Intellectual Property Office (IPO) to consolidate government control over trademarks, patents, and copyrights. IPO’s mission also includes coordinating and monitoring the enforcement and protection of IPR through law enforcement agencies. Enforcement agencies include the local police, the Federal Investigation Agency (FIA), customs officials at the FBR, the CCP, the SECP, the Drug Regulatory Authority of Pakistan (DRAP), and the Print and Electronic Media Regulatory Authority (PEMRA). Although the creation of IPO consolidated policy-making institutions, confusion surrounding enforcement agencies’ roles still constrains performance on IPR enforcement, leaving IP rights holders struggling to identify the right forum to address IPR infringement. Although IPO established 10 enforcement coordination committees to improve IPR enforcement and has signed an MOU with the FBR to share information, the agency labors to coordinate disparate bodies under current laws. IPO has been in discussions with CCP and SECP for more than a year on data sharing and enforcement MOUs that remain unsigned. Weak penalties and the agencies’ redundancies allow counterfeiters to evade punishment.
IPO as an institution has historically suffered from leadership turnover, limited resources, and a lack of government attention. Since 2016, the Government of Pakistan has taken steps to improve the IPO’s effectiveness, starting with bringing IPO under the administrative responsibility of the Ministry of Commerce. The IPO Act 2012 stipulates a three-year term, 14-person policy board with at least five seats dedicated to the private sector. Section 8(2) of the IPO Act also stipulates, “the board shall meet not less than two times in a calendar year.” No board meeting was held in 2018 due to the political transition which occurred that year, but two board meetings were held in 2019. IPO is severely under-resourced in human capital, currently working at only 52 percent of its approved staffing. New hiring rules await final approval from the Ministry of Law. IPO aims to start recruiting new staff in the first half of 2020.
IPO is also charged with increasing public awareness of IPR through collaboration with the private sector. In 2019, in collaboration with various academic institutions and chambers of commerce, IPO conducted over 100 public awareness sessions. Academics and private attorneys have noted that the creation of the IPO has improved public awareness, albeit slowly. While difficult to quantify, contacts have also observed increased local demand for IPR protections, including from small businesses and startups. Private and public sector contacts highlight that the educational system is a “missing link” in IPR awareness and enforcement. Pakistani educational institutions, including law schools, have rarely included IPR issues in their curricula and do not have a culture of commercializing innovations. However, the International Islamic University now includes an IPR-specific course in its curriculum and Lahore University of Management Sciences has content-specific courses as part of their MBA program. IPO officials have expressed interest in collaborating with Pakistani universities to increase IPR awareness. IPO is working with the Higher Education Commission to offer IPR curricula at other universities but has achieved limited traction. In collaboration with the World Intellectual Property Organization (WIPO), Technology Innovation Support Centers have been established at 47 different universities in Pakistan.
In 2016, Pakistan established three specialized IP tribunals – in Karachi covering Sindh and Balochistan, in Lahore covering Punjab, and in Islamabad covering Islamabad and Khyber Pakhtunkhwa. IPO plans to create two more tribunals, with the proposal awaiting approval from the Ministry of Law. These tribunals have not been a priority in terms of assigning judges. They have experienced high turnover, and the assigned judges do not receive any specialized technical training in IP law.
Pakistan’s IPR legal framework remains inadequate as well. Pakistan’s IP legal framework consists of 40-year-old subordinate IP laws on copyright, patents, and trademarks alongside the 2012 IPO Act. The IPO Act provides the overall legal basis for IP licensing and enforcement while subordinate laws apply to specific IP fields, but inconsistencies in the laws make IP enforcement difficult. Since 2000, Pakistan has made piecemeal updates to IPR laws in an unsuccessful attempt to bring consistency to IPR treatment within the legal system. With the help of Mission Pakistan, CLDP, and the U.S. Patent and Trademark Office (USPTO), IPO is in the process of updating Pakistan’s IPR laws to minimize inconsistencies and improve enforcement.
The U.S. Mission in Pakistan, with the support of the United States Trade Representative (USTR), the Department of Commerce, and USPTO, has been engaged with the Government of Pakistan over several years seeking resolution of long-standing software licensing and IPR infringements committed by offices within the Government of Pakistan which undermine Pakistan’s credibility with respect to IPR enforcement.
Pakistan is currently on the USTR Special 301 Report Watch List Pakistan is not included in the Notorious Markets List.
Pakistan does not track and report on its seizures of counterfeit goods.