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CASE ANALYSIS: AAMIR KHAN PRODUCTIONS PRIVATE LTD & OTHERS VS UNION OF INDIA & OTHERS
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CASE
ANALYSIS: AAMIR KHAN PRODUCTIONS PRIVATE LTD & OTHERS VS UNION
OF INDIA
& OTHERS
[2010 SCC
OnLine Bom 1226] [(2011) 1 Bom CR 802] [(2010) 6 AIR Bom R 80]
Authored By
- Aditi Agarwal
AN INTRODUCTION TO THE BACKGROUND
OF THE CASE
Where there is innovation
there is competition. Innovation and Competition conjointly affect the market
economy, growth and development. Intellectual Property Law is a budding area
and thus has a monopolistic environment. Competition law aims to develop social
and economic welfare. It creates a dynamic business environment which promotes
efficiency and enhances the competition in the market. Intellectual Property
law is Anti-Competitive in nature and Competition Law is by the name itself can
be understood it creates competition.
Historically, there have been two
different legal systems: competition law and intellectual property rights (IPRs).
Because both strive to promote innovation and economic growth, there is a lot
of overlap in the purposes of the two legal systems. The primary goal of
competition legislation is effective and accessible market access, but the
primary goal of IPR is monopoly over a creation. There have been constant
challenges in regards to the jurisdictional power enjoyed by the Competition
Commission of India in respect of the cases involving the Intellectual Property
laws. At a juncture, the Competition law provides provisions for dealing with
matters concerning Intellectual Properties, however, the conflicting ideologies
between the two legal philosophies tend to create disputes when cases come up
before the Court. One such case wherein the jurisdictional dispute arose upon
the Competition Commission of India was that of Aamir Khan Productions
Private Ltd & others vs Union of India & others.
In this
case, the Intellectual Property enjoyed over a movie was questioned as being
anti-competitive for the market economy. However, the main concern was whether
the Competition Commission had the jurisdiction over the matter or not.
The Bench for the aforesaid case in the High Court of Bombay, consisted of:
1.
Mohit S. Shah, C.J.
2.
S.C. Dharmadhikari
Citation of The Case: [2010 SCC OnLine Bom 1226] [(2011) 1 Bom CR 802]
[(2010) 6 AIR Bom R 80]
FACTS OF THE CASE AND PROCEDURAL
HISTORY
The
Federation of Indian Chambers of Commerce and Industry (FICCI) filed a
complaint against the United Producers/Distributors Forum (UPDF) and others in
the instant case for creating a film market cartel against multiplexes. In
order to boost their earnings, UPDF has refused to negotiate with multiplex
owners. Because the multiplex industry is entirely dependent on films, this
transaction falls under the heading of refusal to trade and anti-competitive.
The UPDF and others control nearly all of the Bollywood film industry. By
refusing to negotiate with multiplexes, UPDF has limited and regulated the
supply of films on the market, in violation of Section 3(3) of the Competition
Act of 2002.
Competition
Commission of India determined that there is an anticompetitive agreement in
place, as well as an abuse of dominant position. As a result, Competition
Commission of India directed the Director General (DG) to look into the matter.
The DG investigated the situation and determined it to be a cartel. Competition
Commission of India served a show-cause notice on the defendant. Instead of
responding to the show-cause notice, the complainant went to the Bombay High
Court. UPDF claimed that films are protected by copyright. As a result, the
Copyright Board has jurisdiction over the dispute. Furthermore, it was argued
that the only remedy for exclusive licence was a forced licence provided under
the Copyright Act. As a result, the petitioner disputes the Competition
Commission of India's action on the grounds of lack of jurisdiction.
The
parties involved in the matter were as follows:
PETITIONERS –
·
Aamir Khan Productions Private Limited,
·
Aamir Hussain Khan
RESPONDENTS
–
·
Union of India through Ministry of Company Affairs
·
The Competition Commission of India
·
The Director General Competition Commission of India.
RULES (LAWS) INVOLVED IN THE CASE
The rules
involved in the instant matter includes:
a) Copyright
Act, 1957 as the petitioners have claimed the matter to be dealt under
Copyright law and not separately under Competition law. The present matter is
about the accusation on the anti-competitive practices related to a
copyrightable product, that is, a movie. Therefore, the petitioners have
alleged to deal the instant case under Copyright law.
b) Competition
Act, 2002 wherein Section 3(3), and 3(5) of the Act has played a significant
role as the case deals with the anti-competitive practices involved under
Intellectual Property law. Section 3(3) of the Competition law discusses about
the formation of cartel by any enterprises or association of enterprises, which
can take the form of price fixing, sharing markets, bid rigging or quotas.
Usually cartels function in secrecy, one of the major aspect to get hold of
cartel it is necessary to establish intention.
c) Aside from
that, Section 3(5) of the Competition Act of 2002 addresses the scope of
competition law in matters relating to the Copyright Act of 1957, the Patents
Act of 1970, the Trade Marks Act of 1999, the Geographical Indications of Goods
(Registration and Protection) Act of 1999, the Designs Act of 2000, and the
Geographical Indications of Goods (Registration and Protection) Act of 1999,
and the Semi - conductor Integrated Circuits Layout-Design Act, 2000. The
law states that any matter which is related to these laws shall not come under
the purview of the Competition Act, 2002. In other words, the person in
authority of any product or invention under the aforementioned laws may impose
reasonable restrictions upon the usage of those products or can have a monopoly
over the same, which shall not be restricted by the Competition Act, 2002.
ISSUES INVOLVED
The question before
the Bombay HC in this case was regarding, whether the Competition Commission of
India has jurisdiction to handle cases related to IPR.
THE DECISION AND REASONING BEHIND
T
HE JUDGMENT PASSED
The court ruled that
IPR is statutory rather than sovereign, and that the Competition Commission of
India has jurisdiction over IPR issues in relation to completing laws. The main reason
behind ascertaining that the Competition Commission has the authoritative
jurisdiction to entertain matters which are also concerning the IPR is that the
Competition law has specific provision which provides the Competition
Commission to deal on matters involving IPR, to protect the interests of the
consumers, in order to ensure that there is a harmonious freedom of trade
between the consumers. The Competition Commission has been given the authority
to form a forum for dealing with the issues related to Copyright, and
therefore, it rightly has the jurisdiction in the matter.
ANALYSIS OF THE JUDGMENT
In
this case, the Court's decision gives readers the righteous fear that the
application of the Act to matters concerning Intellectual Property Rights is
not at all barred. Section 3(5) of the Competition Act does not restrict a person's
authority to establish reasonable restrictions for the protection of any of his
rights. As a result, an Intellectual Property holder cannot impose any
conditions he sees fit.
Indeed,
the ability to do so is limited by Section 3(5) of the Act, which provides for
broad exceptions when imposing reasonable limits to maintain intellectual
property rights granted by other statutes. Thus, if the licensor imposes a
reasonable limitation in an agreement to protect any of the rights recognised
under any of the statutes of IPR recognised under Section 3(5) of the Act, the
provisions of Sections 3(1) to 3(4) of the Act will not apply.
There
is nothing in the Competition Act which indicates that Competition Commission
of India has no jurisdiction to determine such jurisdictional fact. It said
that the Competition Commission of Law has the jurisdictional power to deal
with the cases related to Intellectual Property Rights and IPR and Competition
Law are interrelated.
IMPACT OF THE CASE ON THE MARKETS
OR CONTEMPORARY RELEVANCE.
It is
crucial to highlight that the issuance of IPR does not violate competition law;
nevertheless, the difficulty emerges when the owner of the IP engages in
anti-competitive behaviour after receiving such IPRs. For example, the granting
of a patent to an inventor is not a concern of competition law; nevertheless,
if the patentee engages in unfair trade practises, such as manipulating
royalties paid or other anti-competitive actions after such granting,
competition law will come into play.
The actual problem and
conflict between the two laws derives from the nature of IPRs. IPRs prohibit
anyone from monopolising an IP or using it in any form without the IP owner's
prior permission or licence. This reduces market competitiveness, resulting in
a conflict between the purposes of both the legislation.
Intellectual
property rights and competition law are not mutually exclusive, but rather
complement each other. There may be some wrangling over how these laws achieve
their goals. All of these regimes, however, attempt to optimise innovation and
the correct functioning of consumer welfare in a market economy. As a result,
this case is added as an example of how the conflict emerging in matters
relating to IPR and Competition law can be combated by developing harmony
between the two, rather than focusing on their differences.
Article Information
CASE ANALYSIS: AAMIR KHAN PRODUCTIONS PRIVATE LTD & OTHERS VS UNION OF INDIA & OTHERS
Authors: Aditi Agarwal
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/10/20
- Issue 7
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International Journal for Legal Research and Analysis
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