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THE FUNCTIONALITY BETWEEN IPR AND COMPETITION LAW: ISSUES AND CHALLENGES
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Article Details
THE FUNCTIONALITY BETWEEN IPR AND
COMPETITION LAW: ISSUES AND CHALLENGES
AUTHORED BY - DISHA MOITRA
ABSTRACT
Intellectual property (IP) and
competition policy are two critical areas of law that intersect in numerous
ways. While IP provides exclusive rights to creators and owners of innovations
and creative works, competition policy aims to promote and preserve market
competition and prevent monopolistic practices. However, there is a risk that
IP rights may be used by their owners to stifle competition, which can be
detrimental to consumer welfare and innovation. Anti-competitive activities of
IP owners can take many forms, including monopolization, abuse of dominance,
collusion, and anti-competitive licensing practices. To balance the interests
of IP owners and promote market competition, a careful approach is needed. This
paper discusses the interface between IP and competition policy. It explores
the different types of anti-competitive practices that IP owners may engage.
The paper also discusses the challenges of applying competition law to IP
rights and the need for a balanced approach that recognizes the legitimate
interests of IP owners while promoting market competition. Overall, the paper
argues that a well-designed competition policy framework that appropriately
balances the interests of IP owners and market competition is crucial to
fostering innovation, consumer welfare, and economic growth.
KEYWORDS: Intellectual Property, Competition Law,
Globalization, Interface
INTRODUCTION
“It is a long-standing topic of
debate in economic and legal circle: how to marry the innovation bride and the
competition groom”
- Mario Monti
The tussle between IP policy and
Competition law gained prominence after globalization. Due to globalization, there
has been an integration of economies as well as technology transfer which gave
rise to new technologies. Innovation and competitiveness in market increased,
which on one hand provided an impetus to economic growth however on the other
hand, it raised many issues and challenges.
From the perspective of IP policy,
competition law restricts competition because competition policies in many
nations are designed in such a way that it believes that concentration of power
is harmful for healthy competition. In simple words, competition policy opposes
monopolization of power. However, it is believed that creating a situation of
perfect competition is difficult and just concentrating on elimination of
monopolization of powers may lower the interest of big corporations to invest
in R&D[1].
If one analyses from the perspective of competition law, then IP regime
restricts competition and promotes monopolization by granting exclusive rights,
which restricts other players in the market to compete on the same level. This
ongoing debate has created a lot of difficulties in harmonizing between the two
regimes.
In short, Intellectual property
rights and competition law are bound together by the financial matters of
developing and a complex snare of legitimate standards that tries to adjust the
degree and impact of every strategy. The previous gives restrictive freedoms
inside an assigned market to deliver and sell an item, administration or
innovation that outcome from some type of scholarly creation qualifying
explicit necessities, it encourages advancement which benefits shoppers through
the improvement of new and better-quality labour and products. These
innovations and manifestations are safeguarded by licenses, copyrights, brand
names, proprietary advantages, or sui generis types of assurance. Contrarily, competition law mechanises the
market, promotes fair competition by avoiding monopolisation and abuse of
dominant position. It further aims at equal distribution of resources and social
welfare of the consumers.
AREAS OF INTERPLAY BETWEEN IPR AND
COMPETITION LAW
·
Licensing Contracts
As per the IP laws, certain exclusive
rights are granted to the IP holders, to exploit and reap profits for their
skill, hard work, creativity for a stipulated period of time. However, there is
a provision of licensing of these aforementioned rights in almost all the IP
statutes to ensure that the rights of IP holder are balanced with the rights of
the public at large. These licenses can either be voluntary licenses or
compulsory licenses.
Voluntary licenses are those that are
granted by the IP holder himself in return of which they receive monetary
benefits. Basically, licensing of IP rights is a way for commercialization of
rights and also transfers the economic rights to the person to whom the license
is granted. Compulsory licenses are given by the government. The concept of
compulsory licensing is incorporated under Article 31[2] of
TRIPS and in compliance with the TRIPS agreement the member nations has also
incorporated the provisions of compulsory licensing in their respective IP
regime. The provision of compulsory licensing is applied in special
circumstances so that is does not unreasonably prejudice the rights of IP
owner. Article 31 of TRIPS elucidates that compulsory license can be granted in
case of national emergency, extreme urgency, for any non-commercial use or to
prohibit any anti-competitive practice.
These grants of licenses are
considered to be pro-active from the point of view of competition law because
competition law oppose the concentration of power or grant of exclusive rights.
As per U.S licensing regime, there is concept of safety zone, which provides
that restrain can be levied on use of technology even when the same has been
licensed if the same is not considered within the purview of safety zone. The
said restrain is not considered as anti-competitive and is imposed when the
combined share of the licensor and the licensee is more than 20% in the market.
The EU has also incorporated similar provisions but in a modified version as
per the requirements of their nation. If we talk about the Indian context, then
the competition regulatory body i.e., CCI has not prescribed any such concept
of safety nets because of which many issues relating to licenses have arisen
over the period of time.
There are various IP as well as
competition law concerns that are raised in case of licensing regime:
·
The
major issue which arose is the refusal to grant license outside a cartel that
is formed or patent pooling can be a best illustration to this situation
wherein certain firms engaged in similar industry decide to pool their
invention and technology and thereafter, they refuse to grant license outside
the cartel.
·
The
practice of payment of royalties even after the expiration of patent or to pay
royalties in order to gain knowledge about the unpatented know-how also pose a
challenge.
·
Fixing
exorbitant license prices is also a common anti-competitive practice.
·
Imposing
unfair restrictions on use of license such as- imposing higher standards of
quality control on patented product more than the reasonable standards or
coercing the licensee to obtain different type of licenses in order to attain
the rights in a particular IP or putting a restriction that after licensing,
the licensee will only engage the staff that is provided by the licensor.
As mentioned above, that CCI has not
created any safety nets so depending on the aforementioned situation or any
other situation, the CCI would either consider it per se anti-competitive or
would conduct an inquiry to know whether such conditions imposed while granting
the license are having an adverse effect on the competition in the market[3].
Although there is no prescribed
safety net by CCI but certain IP legislation such as- Indian Patent act under
Section 140[4] have
mentioned certain conditions that would be considered as void, if imposed while
granting the license. The conditions are that the licensor should not impose
any unreasonable condition while granting the license that would severely restrict
the licensee's right for instance. The licensee should not be restricted to
only use the patented process, licensee should not be bound to only purchase
items from the licensor, the licensing should not be coercive etc.
·
Tie-in arrangements
In common parlance, a tie-in
arrangement can refer to an agreement between enterprises whereby they jointly
agree to do something for instance- Any retailer joining hands with any
e-commerce system to deliver its products only through that specific delivery
partner. However, from the perspective of competition law, tie-in arrangement
has a specific and narrow meaning which is provided under sub section 4 of
section 3. This section defines, tie-in-arrangement as an agreement whereby the
consumer purchasing a product is also required to purchase some other good. In
such an agreement, there are two kinds i.e., ‘tying good’ and the ‘tied good’.
Tying good is the one which the purchaser wants to purchase whereas tied good
is the one which the purchaser is bound to purchase due to the prevailing
tie-in-arrangement. As per competition law, tie-in-arrangements are considered
as anti-competitive.
Anti-Competitive Agreements- Anti-competitive agreements are
those agreements which adversely affect the competition in the market. World
bank glossary define anti-competitive practices as the practices that are
undertaken by enterprises with a motive to eliminate competition, to maintain
their dominant position in the market without providing any cost or quality
benefits to the consumer. Section 3 of the Competition act prohibits such kind
of agreements.
Clause 1 of Section 3 is a general
clause and is broad in its scope. It prohibits any kind of arrangement entered
between enterprises in which supply, manufacture, distribution, storage etc. is
done in such a way that it causes adverse effect on the competition within
India. This section does not lay down any straight jacket formula to determine
anti-competitiveness. The same will be determined as per the facts and
circumstances of each case. Such agreements entered between the enterprise
would be considered as void as per clause 2 of section 3.
Tie-in arrangement may not be per se
anti-competitive. It can also be advantageous, for instance-it may provide the
consumer with a product or service that they might actually need while
purchasing the other product. For an example; a bike seller might be selling
helmet locker with the bike which can be of use for the customer. However,
forcing the customer to purchase the same can be anti-competitive. It is for
this reason that a case relating to anti-competitive agreement is determined
according to its own circumstances.
The U.S Supreme Court in Northern
Pacific Railway Co. vs United States[5],
opined that tie-in-arrangements restrict the competition in respect of the
product that is tied and also the consumers are forced to purchase the tied
product because of which such an agreement have adverse effect on competition.
There are certain pre-requisites that
are looked into before ascertaining that a particular arrangement is a
tie-in-arrangement and is anti-competitive.
1. Two separate products- As discussed above, in order to
constitute tie-in-arrangement, there should be two products one is the tying
product and one is the tied product. These should be two independent product
that are sold together as a consequence of an agreement entered between
enterprises. In such a situation, sometimes it become difficult to ascertain
that whether a particular arrangement is a tie-in-arrangement or not for instance-
a soap company selling a pack of 4 soaps together would not constitute
tie-in-arrangement.
2. Coercion- The next element to be kept in mind
in order to ascertain that the tie-in-arrangement is anti-competitive is
coercion. If a consumer purchasing a product is bound to purchase another
product without his wish, then we can say that such tie-in-arrangement is
anti-competitive. Merely offering a product with another product is not
anti-competitive for instance- bike seller offering helmet lock with the bike,
not making it compulsory for the consumer to purchase the same, then the same
cannot be considered as anti-competitive. Thus, whether coercion exists or not
is again a matter of facts and circumstances.
3. Market Power- One of the peculiar features of competition
act is that as per this act, an agreement is anti-competitive only when it has
an adverse effect on the competition in the market. so, in order to ascertain
the anti-competitiveness of tie-in-arrangement, it becomes important to assess
the market power. The share of the market of the tying product and the tied
product, the restrictions imposed, the rate at which the tied product is sold
etc, all these factors have to be assessed[6].
·
Abuse of dominant position
Dominant Position signifies a
position of strength that an enterprise might have over others. From the
competition point of view, dominant position can be considered in economic
terms wherein one market player is in a position to maintain its supremacy.
Dominant position is not per se anti-competitive under competition act however,
abuse of such position is considered as anti-competitive.
Abuse of dominant position impedes
fair play in the market, it eliminates the competition and also reduce the
choices available to customers. An enterprise can abuse its dominant position
in many ways such as- predatory pricing, imposing unfair conditions, denying
other competitors to have access to market share, using its dominant position
in one market to enter another market etc. Section 4 of the competition act
deals with abuse of dominant position. This section defines dominant position
as a position of strength than an enterprise hold in a relevant market in such
a manner that it operates independently and also effect the competition in its
favour[7].
Clause 2 of Section 4 enumerates
certain activities that are considered as abuse of dominant position.
·
Imposition
of discriminatory prices in order to maintain monopoly and eliminate the
competition is considered as an abuse.
·
Controlling
the production of goods and services.
·
Denying
market access to other competitors.
·
Using
dominant position to enter other relevant market or
·
Entering
into contracts that obligates the other party with certain supplementary
obligations is also considered as an abuse.
Considering the aforementioned list,
the activities that constitute abuse of dominant position can be categorized
under two heads: Exploitative practices and Exclusionary practices. An example
of exploitative practice could be predatory pricing. In predatory pricing, an
enterprise keeps the price of the good below the cost in order to attract
customers, eliminate competition and maintain monopoly in the market. An
example of exclusionary practice could be denial to market access wherein the
enterprise holding the dominant position controls the infrastructure of the
market or other facilities that are necessary to enter the relevant market[8].
Section 19[9] of
Competition Act, 2002, vest CCI with the power to investigate into the
anti-competitive practices. Clause 4 of Section 19 lays down certain factors
that should be considered in order to establish abuse of dominant position.
These factors are: The market share that the enterprise holds and its size, the
barriers for entry of any other competitor, dependency of consumers, price of
the product etc. In situations, where CCI has established a prima facie case considering
the aforementioned factors, then it can direct the director general to conduct
an investigation and file a report thereon on the basis of which CCI can
adjudicate.
·
Patent Pools
The IP rights creates
monopolization whereas the competition law to some extent oppose such
monopolization in case if it is adversely affecting the competition in the
market. however, both these laws are not contrary or always in conflict with
each other. The broader objective of both these laws is to ensure economic growth
and consumer welfare. The primary aim of competition law is to promote free and
fair competition, to ensure that powers are not concentrated in one hand and to
encourage competitiveness in the market. The U.S Supreme Court, in the case of Atari
Games Corp. vs Nintendo of America Inc[10],
opined that competition law and IPR can peacefully co-exist with the help of
proper legislative regime. If monopoly is created by IP rights that is
adversely affecting the competition, then the Sherman Act,1890, dealing with
the provisions of free and fair competition can regulate such a situation.
However, in order to maintain monopoly and commercialize the
IP rights, the IP holders sometimes adopt anti-competitive practices. One of
such anti-competitive practice is Patent Pools. Pool in general sense can be
referred to accumulate something so, patent pooling can be referred as an
arrangement wherein two or more enterprise agree to pool their patent and then
license it to third parties so that, they can escape the clutches of high level
of competition, can maintain monopoly and avoid duplicity and overlap of
technology. In India, the patent regime is regulated by Indian Patent Act,1970.
Although, it does not have any explicit provision regarding patent pool[11].
However, under Section 102 of Patent act, the government can make and regulate
such pools for public interest. Patent pools per se are not bad but they can be
anti-competitive when the members of the pool refuse to grant license to third
parties without any reasonable cause of fix high prices for the grant of
license. Recently, An Indian generic drug manufacturing company, Aurobindo
Pharma Limited and Med Chem joined a patent pool for manufacture of
anti-retroviral medicines[12].
The concept of patent pooling is not new to the world, rather
it has been a prevalent practice since years. During the first world war, the
U.S government intervened to solve the tussle between Wright Company and the
Curtis Company, who were engaged in manufacturing airplanes but were fighting
over their patent technologies which brought the manufacturing of airplane at
halt thus, the U.S government looking at the ongoing condition of war, asked
the two companies to form a patent pool so that airplanes can be manufactured
and use during wartime. Another example of patent pool can be traced back to
1998, when Sony, Philips and Pioneer formed a patent pool to comply with
standards that were necessary for DVD-Video and DVD-ROM. Time and again
enterprises have entered into patent pools but if such patent pool affect the
competition in the market, then the Competition act comes into play.
Patent pools can be generally of two types: Open Pool,
wherein a professional management company is hired to manage the pool and to
take various decisions regarding the same such as: who are eligible to enter
the pool, at what rate the license would be provided to third parties etc. The
other type is a closed patent pool, wherein within the members of patent pool
any one member is selected to take the decisions regarding the pool. In closed
patent pool, there is no outsourcing of decision-making rights to third party[13].
·
Technology Transfer
In the growing age of competition, the creation and adoption
on new technology by companies has become necessary. Technological innovation
is playing a crucial role to gain a competitive edge in the market. whether it
be new and efficient ways of production of goods or adopting new technologies
for management of enterprise or to increase the sales by new ways of communication,
technology plays an important role at every step of production and sale of
goods and services.
Investing in development of new technologies can be risky and
costly but it helps an enterprise to gain a competitive edge in the market, it
also helps to develop any technology suiting to the needs and requirements of
the enterprise and reduce the dependency on other enterprises.
Due to high cost and risk involved in development of new
technology, there has been a growing usage of the concept of technology
transfer. Basically, technology transfer can be referred to a process whereby
any technology, know how developed by an individual, group of individuals, an
enterprise, is exchanged with other organizations. Technology transfer can be
among countries, industries, enterprises etc. Technology Transfer can take
place through various ways such as: licensing, assignment, sale etc. The person
transferring the technology is referred as ‘Transferor’ and the person
acquiring the technology is referred as ‘Transferee’. There is a contractual
legal relationship between the transferor and the transferee and the transfer
of the technological know-how is governed by the terms in the contract[14].
An agreement for technology transfer which includes such
provision that are not reasonable to protect the IPR but are incorporated to
abuse the position in the market, are considered to be anti-competitive.
Technology transfer is a broad term, which can be anti-competitive when; the
transfer includes unreasonable restrictions such as high price, patent pooling,
if done for a motive to abuse the dominant position, can also fall under this
category.
INDIAN SCENARIO
In Indian context, the interplay
between Intellectual Property Rights and Competition Law is at very nascent
stage. IPR and Competition law emerged and developed independently and
individually however, they can be said to be the sides of the same coin because
the broader objective of both of these laws is to accelerate economic growth
and cater to the needs of the consumer.
Various theories of IPR provides a
justification for grant of exclusive rights to the IP holder. These rights
create a situation of monopoly for a limited period of time, which is often
opposed by the competition law. The main objective of competition law is to
enhance the market for the consumers so that, they are given more choices. IPR
in such a situation seems to go against the objectives laid by competition law,
which results in the conflict between the two. Applying competition law to
cases involving IPR is one of the most peculiar and complicated issue in the
field of competition law. Due to the technological advancements, there has been
an increase in the number of cases pertaining to abuse of IPR. At the
inception, these two laws were considered to be contradictory to each other due
to the fact that one promotes monopolization and the other prevents it.
however, in the present time, the harmonization between IPR and Competition law
is considered imperative for the progress of a nation[15].
The Interplay between competition law
with Patent, Trademark and Copyrights is discussed below:
1. Patent and Competition law
The Patent holders can abuse their
position in the market through various ways such as: By abuse of Standard
essential patent, by adopting predatory pricing mechanism, by entering into
anti-competitive agreements, by delaying or restricting the entry of players in
the market through supplementary protection certificates.
·
Abuse of dominant position via using the SEP
Standard essential patent
sets a common standard for any product or process that the other players in the
market has to comply with. Standard can be in form of a document that is
approved by a regulating authority by consensus and such a document mentions the
essential requirements that have to be complied with. Standards can be of two
types: De jure standard and De facto standard. De jure standard are set by
standard setting organization whereas de facto standard gains recognition due
to its wide acceptance among the market players and the public. Standard play
an essential role in improvement of the quality of the good or service
provided. The importance of setting a standard has been recognized
internationally in the 13th WIPO session on law on patent in which
it was opined that increasing interconnectedness among nations, necessitates
the establishment of international standards[16].
The growing importance of SEP has made it a lucrative source for IP holders to
abuse their position in the market.
The one holding a SEP,
have a significant power in the market and they can abuse the same via
restricting the competitors to enter the market or by charging excess free for
grant to license. Due to the abuse of SEP by imposing discriminatory and unfair
conditions, the standard setting organization (SSO), now require the SEP holder
to abide by the FRAND (Fair, reasonable and non-discriminatory) terms while
grant of license[17].
·
Abuse of dominance via excessive pricing
Charging exorbitant price
for a good or a service is considered as anti-competitive mainly when such an
enterprise occupies a dominant position in the relevant market. In case of IP
holders, they are already enjoying the monopoly rights so they have to extra
cautious to ensure that they are not indulging in any anti-competitive
practices.
·
Restricting the entry of competitors by entering into any kind of
anti-competitive agreement
Patent holders in order
to protect their patent from any new invention or competition, often resort to
anti-competitive practices by entering into agreements that curtail the
competition in the market and restrict the entry of competitors. This practice
is common in case of pharmaceutical industry. In pharma sector, there is a risk
that entry of new innovative and cheap generic version of the medicine that
might change the competition pattern in the market. To avoid such a situation
patent holder often enter into Patent settlement agreements (PSA’s) which also
comes under the scrutiny of competition law. When the expiry date of protection
of patent approaches, the patent holder are confronted with a risk that generic
medicines having a cheaper rate will enter the market to tackle with this
situation, the patent holder sometimes engage in patent related dispute or
litigation to delay the entry of generics in the market. In order to resolve
the ongoing dispute, PSA’s agreement are considered as a best resort wherein
the parties enter into an agreement to avoid the high litigating cost. Such
agreements entered between the patent holder and the manufacturer of the
generic medicine, often charge high amount from the manufacturer of generic
medicines which is considered as unreasonable and anti-competitive.
2. Trademark and Competition law
Anticompetitive restrictive
agreements (clauses in commercial contracts, such as prohibitions on online
sales, qualitative selective distribution, vertical restrictive agreements,
etc.) are the most frequent competition law issues pertaining to trademarks.
Trademark owners frequently try to
impose contractual restrictions that forbid shops from advertising their items
on online portals. Such legal provisions are typically found in agreements for
the selective distribution of high-end or highly technical goods. Due to their
restricted nature, such contracts with online sales limits (often in selective
distribution contracts) may be deemed anticompetitive. On the other side,
trademark owners may rely on the argument that such restriction is justified in
order to safeguard the goodwill and reputation of their brands.
3. Copyright and Competition law
Copyrightable subject matter includes
the protection over the computer programme and software. In this era of
digitalization, the importance of computer programme and software has
increased. Due to the growing importance, the copyright holders are abusing
their position in the market through various methods such as by refusing to
provide license, charging excessive royalties etc[18].
To maintain a harmony between IPR and
Competition law, there were various provisions that were incorporated in the
competition act, 2002. Section 3 of the act prohibits any kind of
anti-competitive agreement and consider such agreement as void per se however,
Section 3(5) of the competition act, reflects the nations commitment for
providing strong protection to IPR. This section states that the IPR holder
should not be restricted to impose conditions in order to protect their IP
rights. This section provides a blanket exemption to IPR but to maintain a
balance, Section 4[19]
has been incorporated that prevents the abuse of dominant position and in case
such an abuse is undertaken by an IP holder then, CCI will have a jurisdiction
to intervene in such matters.
CASES OF INTERPLAY BETWEEN IPR AND
COMPETITION LAW
The producers and distributors of
films have the option to collectively refuse to distribute their films to
multiplexes in order to pressure them to agree to the parameters of income
sharing proportion. Extraction of a higher income share was the driving force
for the creation of the United Producers and Distributors Forum (UPDF). All
producers and wholesalers, even those who were UPDF employees, were sent
warning by UPDF not to deliver any new films with the intention of showing them
at multiplexes. The Competition Commission of India determined that UPDF
engaged in cartel-like behaviour in this case since it had complete control
over the arrival of films due to its 100 percent market share.
It was decided that as a component
film is considered to be a collection of copyrights, the question arises as to
whether the choice to sell, give on hire, or transmit the film in broad
daylight also includes the right not to sell or send out a recruit. It should
be noted that copyright does not grant the holder a market ability because
there is a difference between the negotiating power between individual
copyright owners and collective allowing through copyright social rules.
According to Section 3(3) of the Competition Act, the UPDF's decision to limit
its movie stockpile to multiplexes was an accurate conclusion reached by the
CCI. The case's investigation reveals that members of the UPDF were imprisoned
at various stages of the business-like production and dispersion. Because manufacturers
and retailers are not competing at the same level of business, it will fall
under a vertical arrangement.
In the present case, the petitioners
challenged the show cause notice issued by CCI on the ground that CCI has no
jurisdiction to intervene with any matter regarding the film because copyright
has already been obtained for the same. The reason CCI issued a show cause
notice was because of the information that was filed by FICCI Multiplex
Association. In the information, it was stated that the Film & Television
Producers Guild of India are engaged in forming a cartel that is
anti-competitive as per Section3(3) of Competition act. CCI took cognizance of
the matter and directed the Director General to investigate the matter. DG in
its report concluded that petitioner is contravening the provisions of
competition act, by forming a cartel with a motive to charge high revenue from
the multiplexes. The petitioners challenged the said decision of CCI before the
H.C, on the ground that as the film has copyright protection so it would be
exempted under Section 3(5) of the Competition act therefore, the decision of
CCI is without any jurisdiction. The Bombay H.C in the present case, dismissed
the appeal filed by the petitioners. The court opined that there no explicit
provision in the act which bar the jurisdiction of CCI in IPR matters.
Moreover, the matter of jurisdiction of CCI cannot be ascertained at such an
initial stage where only a show cause notice has been issued and the matter is
still at the inquiry stage. This case was an important case because for the
first time it addressed various issues pertaining to the interplay between IPR
and Competition law.
·
Hawkins Cookers Limited vs Murugan Enterprises[22]
The Delhi High Court ruled that a
well-known brand could not be allowed to engage in practises of controlling the
incidental market under the guise of being prominent and well-known in order to
establish a monopoly in the market. The same would be considered an abuse of a
market's dominating position and is prohibited.
In this case, the petitioner
purchased for its business, a window operating system from one of the
distributors of Microsoft and also made an advance payment for the same.
however, later on Microsoft informed the petitioner that they can only purchase
the volume licenses and not OEM (Original equipment manufacturer) license
because OEM license is only available to those who are purchasing a new
machine.
The price of OEM licenses was double
than that of Volume licenses to which the petitioner alleged that different
distributors of Microsoft are charging different prices for the same product
and as Microsoft occupy 90% of the market share so, they are abusing their
dominant position. The petitioner was forced to purchase volume licenses so
they, contented that this amounts to discriminatory pricing under Section
4(2)(a)(ii) of the Competition Act 2002.
CCI in this case did not find that
there was a prima facie case in favour of the petitioner. CCI opined that
charging different price for different license is a justified practice.
Further, CCI opined that there was no evidence against Microsoft to prove that
they have undertaken anti-competitive practices to keep the competitors out of
the market.
CONCLUSION
In the mission of globalization,
India has answered emphatically by opening up its economy, eliminating controls
and restabilising progression. In quest for expanding the proficiency of the
country's economy, the public authority of India perceived the advancement,
Privatization and Globalization period. Subsequently, Indian market faces
rivalry from the inside and outside the country. This lead to need of an
extreme regulation to apportion equity in the business matters and thus the
Competition Act, 2002 was passed to manage something similar. Solid and fair
rivalry has maintained to be a powerful instrument, which upgrades financial
productivity. Thus, the reason for starting the opposition regulation was to
control restraining infrastructures and energize rivalry in Indian market. An
Intellectual Property Right (IPR) is a tricky right "safeguarding
economically significant results of the human mind", it includes patent,
trademark, copyrights, brand names and other comparable freedoms. An IPR
incorporates the option to dispose of others from taking advantage of the
non-human resource. In Indian context, the Competition act, 2002 and various IP
legislations has been playing an important role to harmonize between IPR and
competition law by incorporating provisions of; compulsory licensing, parallel
import etc.
[1] OECD,” Competition policy and
intellectual property rights”, (1989)
[2] Article 31 TRIPS- “Other use
without authorization of the right holder”
[3] Lakshmikumaran & Sridharan
Attorneys,” Interface between competition law and intellectual property laws-
Indian perspective”9-10, Accessed at: https://www.lakshmisri.com/Media/Uploads/Documents/Interface%20between%20Competition%20Law%20and%20Intellectual%20Property%20Laws%20-%20INDIAN%20PERSPECTIVE.pdf
[4] Section 140 Patent Act,1970-
“Avoidance of certain restrictive conditions”.
[5] 356 US 1 (1958)
[6] Alan Prince, “Analysis of
tie-in-agreements under competition law”, 4 International Journal of legal
developments and allied issues 30-34 (September 2018)
[7] Kajal Dhiman, “Abuse of dominant
position under competition act,2002”, Manupatra (20th June 2022),
Accessed at:
https://articles.manupatra.com/article-details/ABUSE-OF-DOMINANT-POSITION-UNDER-
[8] Provision relating to abuse of
dominance, CCI, Accessed at: https://www.cci.gov.in/public/images/publications_booklet/en/provisions-relating-to-abuse-of-dominance1652177254.pdf
[9] Section 19 of Competition act- “Inquiry into certain agreements and
dominant position of enterprise”.
[10] 975 F.2d 832 (Fed Cir. 1992)
[11] Shaurya Shukla, “Patent Pooling
vis-à-vis competition act: Antagonism of IPR and Competition regime”, IRALR (17th
May, 2021), Accessed at: PATENT POOLING VIS-A-VIS COMPETITION ACT, 2002:
ANTAGONISM OF IPR AND COMPETITION REGIME. (iralr.in)
[12] Priyanka Rastogi, “India: Patent
Pool”, Mondaq (7th July 2014), Accessed at:
https://www.mondaq.com/india/patent/325602/patent-pool
[13] Ibid.
[14] Prashant Kumar, “India: Technology
transfer agreement: Intellectual property rights and Competition law”, Mondaq
(20th March 2015), Accessed at:
https://www.mondaq.com/india/contracts-and-commercial-law/382680/technology-transfer-agreement-intellectual-property-rights-and-competition-law
[15] K.D. Raju, “The inevitable
connection between IPR and Competition law: Emerging jurisprudence and lessons
for India”, 18 Journal of Intellectual Property Rights (March 2013).
[16] Ishan Sambhar, “India: concept of
standard essential patent”, Mondaq (30th June 2020), Accessed at:
https://www.mondq.com/india/patent/954588/concept-of-standard-essential-patent
[17] Ashish Bharadwaj and Vishwas H.
Devaiah, “Multi-dimensional approaches towards new technology: Insights of
innovation, patent and competition”, 1-18(Springer, 2018)
[18] Ashish Bharadwaj and Vishwas H.
Devaiah, “Multi-dimensional approaches towards new technology: Insights of
innovation, patent and competition”, 15(Springer, 2018)
[19] Section 4 of Competition Act- “Abuse of dominant position”.
[20] Case no 01 0f 2009, decided on
25th May 2011
[21] 2010 (112) Bom LR 3778
[22] 2008 (3)PTC 90 (Del)
[23] Case no 36 0f 2010, decided on 22nd
July 2011
Article Information
THE FUNCTIONALITY BETWEEN IPR AND COMPETITION LAW: ISSUES AND CHALLENGES
Authors: MAHANTESH G S
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/06/14
- Issue 7
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International Journal for Legal Research and Analysis
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