Open Access Research Article
THE INTERFACE BETWEEN INTELLECTUAL PROPERTY RIGHTS AND COMPETITION LAWS BY KHAVYA. S
Published Paper
Article Details
THE INTERFACE BETWEEN INTELLECTUAL
PROPERTY RIGHTS AND COMPETITION LAWS
AUTHORED BY
– KHAVYA. S
ROLL NO –
20201LBL0002
BBA.LLB
(HONS) SEC 2
SUBMISSION
DATE – 13/11/2023
This paper focuses on the interface
between intellectual property rights and the competition laws. Furthermore it
deals with all the essential subjects related to the topic and encourages the
reader to involve with the topic and improve their understanding on the same. Although the two regimes are diverse, they tend to
show a certain degree of collocation on various grounds where both disciplines
prevail by limiting each other's right. The interface between these two areas
of law is generally anticipated in many sectors of economy, including
Pharmaceutical sector where there is a lack of consumer knowledge, which gives
rise to the problem of Pay for delay/Reverse delay settlements, discrimination
in patient assistance program, ever-greening of patents, etc. and for which the
concept of 'Compulsory Licensing' was addressed to draw the balance between
intellectual property right and competition law so that the owners of
intellectual property rights cannot misuse its privileges and curb
competitiveness in the market by abusing its dominant position.
Keywords-
competition law: IPR
IPRs protection is a
tool meant to cultivate invention, which benefits consumers through the
development of new and advanced goods and services, and promotes profitable
growth. It confers on originators the rights to legitimately count, for a
limited period, other parties from the marketable use of innovative products
and processes grounded on that new knowledge. In other words, originators or
IPRs holders are served with a temporary monopoly by the law to recover the
costs incurred in the exploration and invention process. As a result they earn
due and reasonable gains, so that they've incitement to engage in invention.
Competition law, on the other side, is essential in bridling request poverties,
chastising anticompetitive practices, precluding abuse of monopoly, converting
optimum allocation of coffers and serving consumers with fair prices, wider
choice and better rates. It, thus, ensures that the dominant power associated
with IPRs isn't exorbitantly compounded or abused and extended to the detriment
of competition. either, while seeking to cover competition and the competitive
process, which in turn encourages originators to be the first in the request
with a new product or service at a price and quality that consumers want,
competition law underscores the significance of stimulating invention as
competitive inputs, and therefore also works to enhance consumer weal. Over the
times, there have been numerous developments and advances in the Intellectual
Property Rights field of law with further and further IPRs being issued or
claimed. The focus of IPR is to admire the exclusive rights of an innovator or
person’s bona fide creation and give them monopoly over their separate
creation. Unlike portable or irremovable property, it's a kind of property that
consists of impalpable creations manifested by the mortal mind. The intention
of this composition is to dwell deep into the interrelations between IPR and
Competition Law which acts as an opposing force against IPR as Competition law
basically ensures that there's an effective medium in place to identify and
exclude anti-trust ornate-competitive agreements or cover monopolies or
irregular use of dominant power in the request. The ideal of this composition
is to understand the hassle between IPR and Competition Law and the reasons
behind the same.
Intellectual
Property Rights and Competition laws are two separate realities and work singly
of each other. The main ideal of competition law is an effective and easy
access to the request; whereas, the main ideal of IPR is monopoly with respect
to a creation. Though the two laws are different and have individual objects, they
meet at a point which is the need for creation and icing of consumer weal and
invention. Both the laws work towards attaining this common thing. IP laws give
for impulses, royalties, encourage exposure, promote invention and also insure
that the need of the public is met with. On the other hand, competition law
provides frantic-competition vittles’ dwindling any form faint-competition
conditioning, removing illegal request practices, and promoting genuine request
practices. The interface between Intellectual property rights and Competition
law has attracted growing attention, particularly as a result of the expansion
and strengthening of invention and technological sector at the global scale,
especially in developing nations. Just as the suchlike poles of an attraction
repel each other also the motivation of Intellectual Property and Competition
law creates the apparent enmity between the two. The intellectual property
rights governance furnishes exclusive rights to those who are instituting new
product or creating new effects by furnishing monopoly rights to goad
inventions. The essential trait of intellectual property rights is the' right
of rejection' which allows the proprietor to exercise his right to count the
whole macrocosm, while on the other hand, competition policy seeks to avoid
request walls by confining monopoly and exclusivity to insure freedom of trade
and commerce in the request. In general, it has been realized that both the
areas are reciprocal to each other with two different bodies of law having
their independent and different area of operation. The conflict between the
competition policy and intellectual property right governance has been most
controversial in the environment of patent laws. The interface between
competition policy and patent law arises out of the styles that they embrace to
achieve their complementary pretensions.[1]
On the one hand, competition policy prescribes that there's no unreasonable
conditions on competition, on the other hand; patent laws award the innovator
with a temporary monopoly that insulates him from competitive exploitation of
his patented composition.
HYPOTHESES
Competition law as well as the
copyright law and intellectual property right have the same stance as both have
the same end goal. This paper will going forward prove the statement.
RESEARCH
QUESTION
Even though both the intellectual
property right and competition law both have the same end goal, however each of
their means to achieve that goal is widely different. So which law is superior
and prevailing over the other? Or do
both of them have the same stance?
RESEARCH
METHODLOGY
OBJECTIVES
The purpose of Intellectual property aphorism is majorly to give an
exclusive right to the creator or the author in cases of brand law, thereby
leading similar generators to enjoy the monopoly over the creation. One
illustration of such a statement is copyright licensing or the power of the
creator to assign similar work as part of marketable exploitation of his or her
right. On the other hand, the purpose of competition law is to break the
monopoly and insure that all people have the same means without anyone being
dominant in the request. This is because of the fact that a monopoly might go
against the interests of the consumers. Not to forget, competition law not only
bases its ideal to insure competition or circumscribe the abuse of dominance
but also to work for the benefit of the consumers as a total who are the end
parties to this aspect. So, this is also an analogous aspect when it comes to
the IP and Competition law orate-trust laws. The idea behind antitrust laws was
no way meant to feed to the interests of the jealous challengers who simply
sought to bear a contender to redistribute lawfully earned wealth. “The licit
thing of Competition law is the creation of effectiveness through the
protection of the competitive process itself, rather than any particular
contender; therefore, Competition law seeks to cover competition, not
challengers.” It acknowledges the part of IP in promoting competition because
by precluding free riding, enterprises as a result as encouraged to produce
their own goods. Exception to IPR under Section 3(5) of the Indian Competition
Act 2002 The Indian Competition Act 2002 is designed not to intrude with IPR. Still,
if the CCI finds that IPRs produce a perceptible adverse effect on competition
(AAEC) the Act provides for the possibility to bring action. More specifically,
Section 3(5) of the Indian Competition Act 2002 contains an exception clause
with regard to the use of IPR, which allows for the reasonable use of these
exclusive rights over the invention. “Reasonable use” then pertains to the fact
that Section 3(5) of the Act only allows IP holders to put ‘reasonable conditions’
on their licenses to secure IP protection, without driving Competition law
issues.
Competition Law and IPR in India Competition Act weren’t executed in
India until the time 2002. Before the Competition Act came into force, the
Monopolies and Restrictive Trade Practices Act (“MRTP”) was active. Competition
Act, 2002, amended in 2007 was a relief to the MRTP Act to fulfil the mischief
created by the MRTP Act. After the inception of the Competition Act, there
arose a lot of debates concerning the IPRs the right holders and its interface
with the competition law. Section 3 of the Competition Act deals with taint-competitive
agreements. But it's subsection (5) of
section 3 that's concerned with the interface between IPR and competition laws.
Section 5 (3)( I) easily states that the competition laws don't affect, intrude
or circumscribe any rights of the IP holder in respects to violation of his
rights or operation of conditions for the use of his invention. Still, Section
4 of the Competition Act provides for conditions when the IP holder is said to
have abused his powers and rights conferred to him by Section 3. They are
still, directly or laterally, he's said to have followed anti-competitive
practices, if the IP holder imposes illegal prices or conditions on his work.
If the IP holder limits or restricts the product of goods and/ or services to
the request. If the IP holder limits or restricts scientific or specialized
development to reach to request to the prejudice of the consumers. If the IP
holder denies access to request to anybody in any manner. If the IP holder
enters into contracts with others with supplementary scores for marketable
operation of the creation that don't have any applicability to the subject of
the contract. Still, transfers from one request to another, if the IP holder
shows a dominating power and with similar dominant position. Section 3(5) of
the Competition Act mentions a necessity of reasonable conditions for
protection under IPR. The meaning and the contents of reasonable conditions
aren't mentioned in the provision. It, still, needs to be dealt with in a case
by case manner. Standard Setting Associations (SSOs) are associations that give
for norms to confer to in order to be considered a valid creation for the
entitlement of IP. Standard Essential Patents (SEP) are those patents without
which a standard cannot be attained. Then, SSOs apply IPR taking the members to
expose everything about their IP and certify their SEPs under FRAND Terms (Fair,
Reasonable and on-Discriminatory Terms). Still, a varied interpretation of the
FRAND terms has led to precious action process.
Hindrance of Competitive law and IPR in Foreign Settings the Trade
Related Aspects of Intellectual Property Rights (passages) Agreement in its
papers has mentioned about the competition law and Pico-relations.
Composition8.2 simply states that applicable measures inconsistent with the
passages agreement have to be taken to help the abuse of the IPRs or restraint
of trade or negatively affect the transnational transfer of technology by the
right holders.
Composition 31 k easily mentions about mandatory licensing and
situations when mandatory licensing is allowed. According to the provision,
mandatory licensing cannot be granted if similar license is being sought for andante-competitive
practices. Composition 40 of the passages Agreement deals with the control faint-competitive
practices in contractual licenses. According to the composition, members are
given the right to check for any foul competition practices followed by any
license holders that would affect the smooth functioning of the request.
Through these papers, passages tries to tie a strong knot between IPR
and competition laws keeping IPR in check and not letting it hamper the objects
of the competition laws. In the United States of America, the Clayton Act, the
Sherman Act and the US Department of Justice and the Federal Trade Commission,
Antitrust Guidelines for the Licensing of Intellectual Property, deal with the
interface between IPR and competition and trust laws. Section 1 of the Antitrust
Guidelines mention about forestalment faint-competitive agreements. Section 2
of the Antitrust Guidelines deals with the abuse of the dominant position,
which in this environment means the vituperative gets of an IPR holder in
respect of trade and the request. In the European Union, The Treaty on the
Functioning of the European Union (TFEU) has been in function in relation to
the competition laws andante-competitive practices. Section 101(preliminarily
section 81) deals with anti-competitive practices. The provision easily states
that no existent is to follow Anti-competitive practices. Section 102(preliminarily
Section 82) deals with the abuse by dominant person. In the environment of IP,
the vittles’ specify that no IP holder is to follow andante-competitive
practices for his invention and hamper the request practices[2]. Further, no IP holder can
exercise a dominant power over other request members and affect the request.
SCOPE AND
LIMITATIONS
Passages regarding IPR policy and Competition Law There are generally
two approaches that have been espoused to help IPR abuse mandatory licensing
(an involuntary contract between a willing buyer and an unintentional dealer
assessed and executed by the state) and resembling significances (goods brought
into a country without the authorization of the patent, trademark or brand
holders after those goods were placed legitimately into the request away).
preventative Measures Two styles have been used to help the abuse in IPRs-
mandatory licensing (a contract which is involuntary between a willing buyer
and an unintentional dealer is executed by the government.) resembling
significances( goods brought into another country once they've been placed in
the request away without the authorization of a patent or brand holder.) Under
Composition 31 of the passages Agreement provides for the entitlement of
mandatory licenses, under the following situation- In the interest of public
health In case of public exigency Anti-competitive practices Secondly, there
are numerous consequences regarding the interlink between competition policy
and IPR that requires to be taken into account. Authorities
regulating competition policy should consider each case relating to IPRs with
reason approach. Still abuse of dominance
laws could be applied to IPRs and suitable remedies taken; this will reduce
high implicit cost regarding reducing impulses to introduce. His correlation
between IP rights and Competition Law seems to be antithetical to each other
but in actuality, it's not; but it assists the person to invest in a dynamic
competition by restraining the rigid competition. It gives benefits
to the holder to make exclusive use of his product within a particular period. During such a particular period the patent
possessors have monopoly power and are in a position to dominate. Similar
dominance won't lead to violation of antitrust law. Over time and
from arising different cases it results in the supplementary but not a
contradicting function of both the laws. To
understand the problem arising while applying an IPR and competition law, it's
necessary to look into the Indian laws about competition and how it has been
structured to exclude similar problems. In the contemporary world, the requests
have come globalised leading to investments and start- ups of businesses smooth
without restrictions. When we bandy competition law and IPRs, it's known that
both of these attempt to regulate an aspect of the request by conferring rights
and duties to individualities and enterprises. Competition in the IPR field of
law basically denotes the cut- throat competition among generators or
formulators where allocation of IPRs principally encourages similar generators
to develop their product in order to survive the request. IPR laws enable
similar competition and nurture it by guarding as well as icing rights to
similar formulators in order to maintain their exclusive claim over their
creation. On one hand IPRs give individualities the right to simply do business
with their intellectual property or creation which further creates a monopoly
while on the other hand competition law attempts to regulate requests and covenant-competitive
agreements, dangerous monopolies, and abuse of dominant position. One of the
first major differences between the two is the interpretation of the word ‘competition’
which is contextually different in competition law and IPR laws. Competition in
the IPR field of law basically denotes the cut- throat competition among
generators or formulators where allocation of IPRs principally encourages
similar generators to develop their product in order to survive the request.
While in the competition law sphere, the competition between different
individualities or enterprises is laboriously regulated and covered to uphold
fair trade practices. As clashing as both laws might feel, competition law
doesn't intend to discourage or penalise all forms of monopolies. Competition
law only penalises and discourages those monopolies where the IP holder or the
establishment abuses their dominant position in the request. This is the line
of difference between the ideals of IPR and Competition law, where the former
confers rights to individualities while the ultimate regulates those
individualities with similar rights and powers. Still, there are some parallels
in IPR and Competition law where one law complements the ot[3]her. For illustration, the
patent law primarily focuses on barring bootlegging or replication of someone’s
work by conferring exclusive rights by dealing patents. This aspect of IPR
impeccably syncs with the ideals of competition law as the ultimate points to
produce a fair and safe request for businesses to bloom. While competition law
upholds trade or issue of patents it doesn't still encourage or enable abuse of
patent rights which leads to violation faint-trust programs.
OUTCOMES
The paradigm of interface between the Intellectual Property Rights
(IPRs) and Competition law is that the two legal administrations are connected
by the economics of fostering invention and a sophisticated web of legal
programs that seek to stabilize the compass and effect of each policy. There
exists a common area wherein Competition policy and Intellectual Property Law
end at nurturing invention, effectiveness, consumer weal and profitable
growth. The interface between the two, Competition policy and
Intellectual Property Law has been examined from two main aspects
(i)
The effect that the Intellectual Property Rights have
in shaping the disciplines of competition
law; and
(ii)
the operation of competition law on
thepost-grant use of IPRs Intellectual Property Rights act as an institutional
nonsupervisory frame confining, generally as an impunity, pure rejection of
conditions by competition law.
The Competition Act, 2002 (India) under section 3- outlines that its
vittles’ won't circumscribe" the right of any person to restrain any
violation of or to put reasonable conditions, as may be necessary for guarding
any of his rights which have been or may be conferred upon him under colourful
IPR bills. Nevertheless, the Competition Act does draw the line insofar as it
doesn't permit unreasonable conditions to be passed off under the guise of
guarding IPRs. Therefore, in principle, IPR empowering arrangements which
intrude with the Competition law programs similar as competitive pricing,
amounts, rates of products or abuse of the dominant position whatever be the
source of similar practices would fall foul of ultimate in India. For case, the
field- of- use limitation on the Licence, if it's quested that it should be
used as drug only for humans and not creatures, indeed though it could be used
for both. Likewise, the Monopolies and Restrictive Trade Practices (MRTP)
Commission in- Valla Peru man and another. Godfrey Phillips (India) Limited
(MRTP Commission, 1994) and Manju Bhardwaj. Zee Telefilms Ltd (MRTP Commission,
1996) observed that where a trademark is misused by manipulation, deformation,
contrivances and embellishments so as to mislead confuse the consumers, he'd be
exposing himself to an action of indulging in illegal trade practices. In other
words, this implies that the Competition Act prohibits trade practices visible
to the detriment of public interest and also restricts the unreasonable
conditions assessed by a right holder during the exercise of a right. The
conciliation of IPRs and competition policy entails the necessity to identify
IP laws as a form of competitive policy, performing in a balance between
individual interests of the right- holders and the interest of the society at
large, and encouraging farther invention. Competition law and IPR come less
divergent given the fact that abecedarian end of invention/ inventions is
further competition. The construction of commerce between competition law and
intellectual property rights is driven by a number of contending considerations
piecemeal from the IPRs and competition principles. The challenge for the state
is to concoct rules both within the dimension of IP law[4] as well as outside it,
i.e. statutory IP laws as well as substantial competition law in a manner that
promotes dynamic competitive requests The middle path can be achieved only by
coordinating the immediate pretensions of the two systems only with reference
to their effect on the request i.e. IP law must deal with the entitlement and
functioning of property rights, while competition law would need to deal with
the manner of exercise of these rights.
CONCLUSIONS
The price proposition of Intellectual Property Rights specifically
provides for a monopoly over the creation. It allows the right holder to use,
vend, license or do down with the IP the way he wants. On the other hand,
competition laws aim at furnishing equal openings to everyone in the request
and against strict monopolization in the request. The two laws feel to drift in
opposing directions leading to the conflicts that are seen between them. At the
same time, one of the advantages of IPR is that it encourages invention which
further leading to a lesser competition in the request. Competition laws aren't
against dominant position in a request but are against the abuse of similar
dominant position. To check the extreme monopolization and abuse of dominant
position, the government has come up with colourful processes like mandatory
licensing which keeps a check on illegal prices and illegal trade practices
among IP holders. IPR and Competition law are reciprocal to each other and
therefore cannot be considered in insulation, given that their compass seems to
largely lap and, in some cases, clash. It's therefore important to strike a
balance between IPR and Competition law to fulfil the pretensions of
competition and consumers’ weal, while at the same time guarding invention by
granting formulators sufficient protection. After analysis, it can be concluded
that IPR is a right while on the contrary Competition law is regulating body
which makes the regulations regarding the product, force, distribution and
storehouse of godet. To be performed by the enterprise while operating the request. IPR is said
to be some benefit given to the creator of any product or author of any script
to make exclusive use of it for a specified period. We can support this by labour proposition which is given by which
means that a person is liable to get the benefit of all hard and labour work It
appears that these both laws are contradicting in nature but they aren't as we
find from the below study that both the laws are supplementary to each other
and one comes into the picture when one is misused. Competition law tries to
offer wide kinds to the client and it brings the balance between the right of
the manufacturer and the guests by maximizing profit with a quality product at
affordable prices. IPR also allows the manufacturer to get the price for the
sole creation of the product which in turn will help the public at large. The
monopoly position offered by the IPR is prima facie not violating the
competition programs but abuse of the position can be violating the programs.
IPR and Competition law have been put under the microscope frequently in the
recent history due to the unintentional yet ineluctable conflicts but anyhow of
similar hassles, they both should be seen as reciprocal laws which appreciate
each other. IPR is a law which focuses on creating and conferring rights upon
individualities or pots while competition law aims forward to maintain checks
and balances with regard to request players gets.
CASE LAWS
Aamir Khan Productions Pvt. Ltd. v. Union of India The issue that arose before the Bombay High Court was whether the
Competition Commission of India (CCI) had the governance to take up cases
relating to IPR. The court held that IPR isn't autonomous in nature but
statutory and the CCI has the governance to handle matters relating to IPR vis-
à- Vis completion laws.
Union of India v. Cyanamide India Limited & Another In this case, the Hon’ble Supreme court held that charging
excessively for life saving drugs is against the principles of price control in
the market and hence falls under the jurisdiction of CCI.
Kingfisher v CC the Bombay High
Court held that the CCI is competent to deal with all the issues coming before
the Copyright Board of India.
Ericsson v. Micromax In this case,
Ericsson brought a suit against Micromax claiming that Micromax had infringed
eight of their SEPs and that Micromax had not obtained licenses for these
infringed SEPs under the FRAND Terms. The Hon’ble Delhi Court held that Micromax
is liable to pay damages for the infringement and Ericsson has the right to
check for all the exports Micromax has done so far which is likely to violate
their IPR.
Ericsson v. Intex: In this case Intex
brought a suit against Ericsson stating that Ericsson demands for an
inappropriate amount of royalties for the SEPs. On looking into the matter, the
courts concluded that the claims were untrue and that Intex only
brought this up to delay the process of justice and to avoid payment of
royalties.
ANNEXURE
Article Information
THE INTERFACE BETWEEN INTELLECTUAL PROPERTY RIGHTS AND COMPETITION LAWS BY KHAVYA. S
Authors: KHAVYA. S
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/11/16
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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