This is my first
post of the year and I am happy that I get to start on a positive note. Yesterday
i.e. March 30, 2016, Justice Vibhu Bakhru of the Delhi High Court delivered a 161-page
decision in a batch of Writ Petitions wherein the central issue before the
Court was the jurisdiction of the Competition Commission of India (CCI) on
abuse of dominant position flowing from ownership and exercise of patent
rights. Since I was part of the team which worked on the matter, I will not
comment on the facts of the case. That said, one wouldn’t be wrong in saying
that the Court’s findings on certain questions of law are significant
milestones in the evolution of Indian Intellectual Property and anti-trust
jurisprudence.
On a personal note, I
can safely say that the Court’s findings on the interplay between (a) the
jurisdictions of a civil court seized of a suit for patent infringement, (b) the
Controller of Patents under the compulsory licensing mechanism (Section 84 of
the Patents Act) and (c) the Competition Commission of India, resonate with my
analysis in several
posts
in this
blog, which were subsequently discussed
by the Centre for Internet and Society. In fact, I had undertaken a comprehensive
analysis of the statutory allocation of responsibilities between civil courts, Controller
of patents and Competition Commission in my paper “Patents and Competition Law: Identifying Jurisdictional Metes and
Bounds in the Indian Context” which was submitted last year for publication
in the National Law School of India Review (NLSIR) and will hopefully be
published in the next few days. This paper is based on my talk delivered last
May in the 8th National Symposium on Competition Law at the National
Law School, Bangalore.
Extracted below
are a few excerpts from the paper:
“Abstract
The primary object of this article is to understand
the relationship between patent rights and competition law under the existing Indian
legal framework. It has become imperative to elucidate the legal position on
the interplay between the two, in light of growing antitrust concerns arising
out of the exercise of patent rights. The Author has employed conventional principles
of statutory interpretation to the relevant provisions of the Patents Act, 1970
and the Competition Act, 2002 to arrive at his conclusions, with Expert
Committee Reports playing a corroborative role, primarily because the nature of
enquiry undertaken in this article is predominantly legal and not
policy-related. Additionally, this is due to the fact that there is a lack of
guidance on the issue from Indian Courts.
1. INTRODUCTION
Intellectual Property Rights (IPRs) and Competition
law are usually perceived as sharing an uneasy relationship given their
seemingly contrasting goals. However, to pit one against the other without
qualifications and riders may not do justice to the nuances of their respective
natures, roles and goals. The system of IPRs is premised on the assumption that
grant of exclusive rights for a limited term is desirable to promote dynamic
competition, which pushes the envelope of innovation and thereby contributes to
enlarging the basket of choices available to consumers. In other words, in theory,
incentivising innovation through IPRs elevates the level of competition from
static to dynamic, which is in contrast to the adversarial perception of IPRs
and competition law. That being said, in practice, even the most stringently
regulated right is susceptible to abuse at the hands of a determined and
motivated right owner to the detriment of healthy competition. This
necessitates the existence of a safety valve in the form of competition law.
Simply put, the goal of competition law with
respect to IPRs is to ensure that the said species of rights are exercised
within the limits prescribed by law and in a manner which is beneficial to
consumers and which promotes competition. Therefore, an IP owner runs into
conflict with competition law only in the event of a transgression in his
capacity as an IP owner if such transgression distorts competition. The
validity of this general proposition in the Indian context will be examined and
tested in specific relation to patent rights in the ensuing portions of this article.
The aim is to ascertain if the Competition Act, 2002 (hereinafter referred to
as “the Competition Act”) has indeed been vested with the power to check restrictive
and abusive trade practices resorted to by a patentee, and if so, to what
extent.
6. CONCLUSION
IP statutes, without a doubt, provide for internal
corrective mechanisms to address inequities arising out of non-use or abuse of
IP rights. However, the scope of analysis undertaken under these mechanisms is
limited to verification/examination of achievement of the specific objectives
of IP statutes. In other words, these mechanisms lack the sweep and depth of a
market-based assessment of the actions of an IP owner under the Competition
Act. No single IP regulator, be it the Controller of Patents or the Copyright
Board, is charged with the duties of the Commission as reflected in Section 18
of the Competition Act, or is vested with the vast powers of the Commission to
deal with market mischief. Therefore, given that the specific object of the
Competition Act is to foster sustainable competition in the market, protect the
interest of consumers and to ensure freedom of trade, the Competition
Commission must be allowed to fulfil its mandate unhindered.”
