Interface of

Competition
Law with
Intellectual
Property
Snapshot of the
Presentation
Competition: An Competition Act, Broad Provision Application of
Introduction 2002: Preamble of Competition the Competition
Act, 2002 Act, 2002

Definition of IP Nature and Competition Act, Application of

Intent of IPR 2002 and IPR IPR on
Competition Law

Anti-Competitive Case Laws Conclusion and Reference and

Acts Pertaining Summary further Readings
to IPR
 The process of rivalry between firms
striving to gain sales and make
profits.
Motive: self-interest, but outcome mostly
beneficial for the society.

Competition Competition is not just an event, but a

process.
: An
Introduction It is not automatic – needs to be nurtured.

Types of Competition:

Price Competition
Non-price Competition:
Competition Act, 2002
Competition Act, 2002 notified in January, 2003 - Stated objective (as
indicated in Preamble) is to establish the Commission to:

Eliminate practices having adverse effect on competition;

Promote and sustain competition

Protect consumers’ interests

Ensure freedom of trade carried on by other participants in

markets in India
 BROAD PROVISION OF
COMPETITION ACT, 2002

Prohibits Prohibits Provides for

Anticompetitiv Abuse of Regulation of
e Agreements. Dominant Combinations,
Section 3 Position. Section 5
Section 4
Enjoins
Competition
Advocacy
Section 49
 All Enterprises, whether public or
private provided doing Economic
Activities.

Government Departments
covered (in CA,2002), except
when engaged in discharge of
sovereign functions and
APPLICATION Currency, Atomic energy, Space
OF THE ACT and Defence
Extra-territoriality (Sec. 32)

Provision for CCI to enter into

MOUs with foreign competition
authorities
 “Intellectual Property shall include
the rights relating to
literary, artistic and scientific works,
performances of performing artists,
phonograms, and broadcasts,
inventions in all fields of human
endeavour
scientific discoveries
Definition Industrial designs
of IP trademarks, service marks and
commercial names and designations
protection against unfair competition
and all other rights resulting
from intellectual activity in the
industrial, scientific, literary or
artistic fields.”
 Intellectual Property
Rights provide
exclusive rights
to the holders to
perform a productive
or commercial activity.

Nature and Intellectual property

intent of right is an
exception to the
intellectual general rule promoting
property free competition.
rights
Limited Monopoly on
IPR.
 Section 3 (5) of
Competition Act, 2002 checks
Competiti the anti-competitive activities
through IPR.

on Act,
2002 and Section 3(5) of the Act declares
that “reasonable conditions as may be
IPR necessary for protecting”
intellectual property right will not
any
attract the implications of section 3 of
the Competition Act, 2002.

The expression “reasonable

conditions” has not been
defined or explained in the
competition act.

By implication,
unreasonable
conditions that attach
to an intellectual
property right will attract
the implications under section 3
of the Act.
 Application of Competition Law
to IPR

Competition law not Rather It ensure that the Competition laws

hostile to IPR. complementary inherent purpose of the curtail abuse
in nature. rights is not defeated. and restrict the
owner from such
exercise of his
rights.
Therefore competition
laws regulates:

1) Extent of 2) Abuse of such 3)In Licensing

derived market power market power agreements entered by
the owners
 Market power derived from Intellectual
Property Rights (IPR)

Abuse of such power

Anti Licensing of patents, copyrights and trademarks

Competiti Tie-in arrangements

ve acts in
Grant back provisions
IPR
Package licensing

Unreasonable regulations or
conditions
Amir Khan Facts of Case Multiplex Association
of India India filed
Production Information to the CCI

Pvt. Ltd. V
Union of UPDF: United
India and Producers
Distributor Forum
&

Ors WP No. Alleging

Cartelization
358 of among Producers
as UPDF have
decided to charge
2010 more from MAI.
 CCI Prima Facie found that there
is an Anti- Competitive
Agreement (Section 3) and Abuse
of Dominant Position (Section 4).

Directed the Director General to

Investigate the case under
Cont.. Section 26 (1)

DG Investigated the matter and

reported “Cartel”
 CCI Issued the Show Cause
Notice But UPDF Approached
the Challenged the Notice
Before Bombay High Court and
Contended

Cont…
CCI has no jurisdiction, Only the
Copyright Board is having
Jurisdiction. Because Films are
subject matter of Copy right.
Hence, They are exempted
under section 3 (5) of CA, 02.
 Issue: Whether CCI has
jurisdiction to deal with the IPR
Cases?

The Court held that the CCI has

Issues and power to deal with IPR Cases.
Findings

High Court Held that “There is

nothing in the Competition Act
which indicates that CCI has no
jurisdiction in such cases.”
Case: Ericsson Vs Micromax
 Ericsson as a member of European
Telecommunications Standards Institute (ETSI), a
standard setting organisation had committed to grant
irrevocable licenses regarding its SEPs in 2G, 3G and
EDGE technology on FRAND terms.

The informant Micromax Informatics Ltd. (Micromax)

Background alleged that Ericsson had abused its dominant position
in the market for GSM technology by:
of
Competition
Case
Demanding excessive royalty based on the sale value of the entire
phone instead of the value of the patented technology used in the
phone
Filing of injunction and threatening to report Micromax’s failure to
pay royalty to Securities Exchange Board of India, prior to its listing
The foremost objection raised by Ericsson was the lack
of jurisdiction of CCI because the issue of abuse of
patent rights must be resolved under the Patents Act.
 Commission dismissed the jurisdictional challenge
simplistically by highlighting that this dispute
consisted of questions regarding competition law
which CCI had jurisdiction to adjudicate.
The commission defined the relevant market as the
‘SEP in GSM compliant mobile communication
devices in India.’
Decisio Ericsson was found to be prima facie dominant
in the relevant market because it held almost 400
n of the patents in India in GSM technology and no
substitutable alternative was available for the
implementers of the standard.
CCI A prima facie case for abuse of dominance was
satisfied because the royalty charged by Ericsson
was on the sale price of the product and not on
the value of the technology contributed by the SEP.
On this basis the Director General was asked to
investigate the complaint.
Challeng Ericsson challenged this
order by filing a writ
e of the petition contending that the
Patent Act provided the
remedy of compulsory
CCI licensing in such cases and
would override the
Order Competition Act, 2002 (‘the
Act’).
Before Issue: Whether there
the Delhi was
irreconcilable
any

High inconsistency
between the Patent
Court Act and the Act?
 However according to the court the remedies
for abuse of patent rights provided by both laws
are quite different.
The Patent Act provides the remedy of
compulsory licensing for abuse of patents i.e. a
Judgme remedy in personam, while Section 27 of the
Act provides various remedies that include
nt of levying penalties, cease and desist order i.e.
remedies in rem.

High Based on this analysis the court concluded that

there was no irreconcilable inconsistency
between both regimes and the CCI could
Court exercise jurisdiction even though there was an
impending civil suit for infringement.
Thus, the Delhi High court dismissed all
jurisdictional challenges upholding the
jurisdiction of CCI to assess abuse of dominance
by SEP holder i.e. Ericsson.
 In a high-profile case between telecoms
companies, the Hon’ble Supreme Court in a
detailed judgement ruled that
“The CCI and TRAI (which had challenged
CCI jurisdiction in telecoms cases) each

CCI v. had its own area of jurisdiction. However,

in an effort to harmonize the roles of both
regulators, the Hon’ble Court decided that
Bharti TRAI, being the expert regulator in
telecoms, should first be allowed to

Airtel
decide on the disputed issue; the
jurisdiction of the CCI was not excluded
but pushed back to a later stage after

Ltd. completion of the TRAI proceedings.”

(2019) 2 SCC 521 . The Court did not appreciate that even in
regulated sectors like telecoms, the CCI must
necessarily keep an overarching oversight so
that while complying with the sectoral law, the
competition law is not violated.
 Monsanto approached the Delhi HC
challenging the jurisdiction of CCI to
investigate their licensing policies under
Section 4 of the Competition Act, 2002
(Competition Act).
Monsant
o It was argued that the issues arising
out of their licensing
Holdings arrangements should
subjected to the Controller of
be

(P) Ltd. v. Patents (Controller) under the

Patents Act, 1970 (Patents Act),
CCI, and CCI does not
jurisdiction in this regard.
have
2020 SCC OnLine De
l 598

. However, the Delhi HC rejected the

objections of the petitioners and upheld
the jurisdiction of CCI to probe into such
abusive conduct, despite the presence of
a specific statutory regulator.
While dealing with the objections of the
petitioners, the Delhi HC also clarified certain
observations made by the Supreme Court of
India (Supreme Court) in CCI v. Bharti Airtel
Ltd. (Bharti Airtel judgment.)
In doing so, it particularly emphasized:
That the Bharti Airtel judgment is not an
authority for extending the proposition that
whenever there is a statutory regulator, the
complaint must be first brought before the
regulator and examination of a complaint by
CCI is contingent upon the findings of such
regulator.
 The interface between competition law
and IPRs protection is very complex and
multifaceted.
It needs to be handled very carefully.
There are certain similarities between IPR
Summar and Competition Law.
y And IPR system promotes innovation which is
a key form of competition,, on the other
Conclusi hand , competition policy by keeping
market open and effective , preserves the
on primary source of pressure to innovate
and diffuse innovation .
But there are also conflicts such as when
as IPR serves to entrench market power.
A regulatory balance therefore should be
maintained.
 Anshuman Sakle, Partner, Ruchi Verma, Associate and
Nandini Pahari,Associate, Cyril Amarchand MangaldasMore
Power to CCI — The Delhi HC upholds the CCIs Jurisdiction
to probe against Monsanto’s abusive practices(2020) PL
(Comp. L) July 61
Mansee Teotia & Manish Sanwal, INTERFACE BETWEEN
COMPETITION LAW AND PATENTS LAW: A PANDORA BOX
available at

Referen http://www.cnlu.ac.in/2021/CIRF/1%20Mansee%20T
eotia%20and%20Manish%20Sanwal.pdf

ce and Charanya Lakshmikumaran Neelambera

Sandeepan, Regulatory Tussle: Competition Commission
of India v. Controller of Patents & Ors. Available at

Further https://www.lakshmisri.com/insights/articles/regulato
ry-tussle-competition-commission-of-india-v-controll
er-of-patents-ors/#
Reading .
Amazon Seller Services Private Limited v. Competition

s Commission of India, Delhi Vypaar Mahasangh and Flipkart

Internet Private Limited
Sections 21 and 21A of the Competition Act, 2002.
K.D. Raju, "
The Inevitable Connection between Intellectual Prop
erty and Competition Laws
", Journal of Intellectual Property Rights
US Department of Justice and the Federal Trade
Commission, '
Antitrust Enforcement and Intellectual Property Righ
ts: Promoting Innovation and Competition
' (2007)