CONTINUOUS ASSESSMENT TASK-I

COMPETITION LAW
ASSIGNMENT-I

INTERFACE BETWEEN IPR AND COMPETITION LAW

SUBMITTED TO : SUBMITTED BY:

Dr. Geeta Jyoti Mehmi

Assistant Professor of Law B.Com., Ll.B. (Hons.)

School Of Law L1703 A01

Lovely Professional University 11716098

 INTRODUCTION

At first glance, competition law and intellectual property law appear to have different scopes.
The growing number of antitrust and intellectual property law litigation, on the other hand,
proves different (IPR). In fact, the Competition Commission of India's (CCI) case law reveals
that the scopes of these two disciplines might overlap at times, and their goals can clash. As far
as anti-competitive agreements are concerned, competition law regulates mergers and
acquisitions, restricts the use of dominating positions, and so on. On the other hand, Intellectual
Property Rights attempts to create a balance between the owner' rights and the public interest. It
aids the intangible property owner in obtaining exclusive rights and monetary value for his
intellectual contribution.

In the short term, intellectual property rights foster creativity and novel items on the market,
whereas competition legislation benefits consumers in the long run by bringing new products to
market and maintaining product consistency. Both are complementary approaches to
encouraging creativity, technical advancement, and economic prosperity for the benefit of
customers and the economy as a whole. From the following, it is clear that there is a connection
between IPR and competition law. Because IPRs grant exclusive rights and monopolies, they are
incompatible with competitive policies.

On the one hand, it is critical to lift the inventor's spirits, while on the other side, market
competitiveness must be managed. They are, nonetheless, complementary in several areas. IPR
allows for technological innovation, which leads to the creation of additional products and the
dynamic growth of the product, which is one of the goals of competition policy.
 CONFLICT BETWEEN IPR AND COMPETITION LAW

Intellectual property refers to the creations of the intellect, including literary and artistic works,
as well as symbols, names, images, and designs utilised in trade. Patents, copyrights, trademarks,
and other intellectual property rights are examples of intellectual property rights. An IPR is
required to prevent others from using a non-corporeal commodity.

Intellectual property includes patents for inventions, trademarks, industrial designs, and
geographical references; copyright includes literary and creative works such as books, poetry,
and plays, animations, songs, sketches, paintings, photos, and sculptures, as well as architectural
designs. Musical artists' works, phonograph producers' recordings, and radio and television
stations' initiatives are all instances of copyright-related interests.

Competition legislation requires the enactment of a set of laws promoting market competition.
These are aimed at preventing unfair trade practises. It is frequently presented with the goal of
limiting the dominant company's abuse of industry hegemony. Consumer protection and fair
industrial competition are the fundamental objectives of the Competition Act. Holders of IPRs
are prohibited from engaging in anti-competitive agreements under the requirements of the 2002
Protection Act because they are in violation of competition policies. Furthermore, the Act
empowers India's Competition Commission to pursue IPR holders who abuse their dominant
position.

The combination of intellectual property rights and competition law has been regarded as a
failure. The former promotes monopolies, whilst the latter is designed to combat them. In other
words, whereas IP legislation tries to establish monopoly rights, antitrust law opposes them.
Despite this, the goals of both legislation appear to be at odds. Parallel imports and compulsory
licences are two primary measures utilised in IPR anti-competition policies to combat
monopolies
The Bombay High Court ruled, in Aamir Khan Productions Pvt Ltd v Union of India 1that CCI
has the requisite authority to deal with competition law and IPR cases. The court ruled that
competition commission has the power to deal with intellectual property cases. The court laid
down, “competition commission has the power to deal with intellectual property cases. What can
be contested before copyright board can also be contested before Competition Commission
Competition Act, 2002 has overriding effect over other legislations for the time being in force.”

Similarly, the Bombay High Court ruled, in Kingfisher v CCI2, that the CCI is qualified to deal
with all the problems before the Copyright Board of India. In this case the court held that Section
3(5) does not limit the right of the holder of IP rights to sue for infringement of copyright,
trademark, patent, etc. Competition Commission of India has conferred a power to deal with all
the cases that come before the Copyright Board. Thus competition law does put the bar on the
application from other law.

This was also the outcome of the FICCI Multiplex Association of India v United
Producers/Distributors Forum3, which once again affirmed the CCI’s jurisdiction. In this
particular case the main question was whether the competition in the market affects the right of
the copyright holder. the court observed in the above case that the right granted to the copyright
holder is not absolute right but it’s a statutory right under the copyright Act, 1957. The European
courts of justice also held that the objective of IPR is to encourage innovation in all areas and
further provide commercial gain.

1
Aamir Khan Productions Pvt Ltd v Union of India, 2010, 112 Bom LR 3778
2
Kingfisher v CCI, Writ Petition No. 1785 of 2009, Bombay High Court
3
FICCI Multiplex Association of India v United Producers/Distributors Forum, Case No. 1 of 2009, CCI Order
Dated 25 May 2011
 EXCEPTION TO IPR UNDER SECTION 3(5) OF THE INDIAN
COMPETITION ACT 2002

The Indian Competition Act of 2002 aims to keep IPR involvement to a minimum. However, if
the CCI believes that IPRs are causing an Appreciable Adverse Effect on Competition
(AAEC), the Act allows for the possibility of taking action. Furthermore, Section 3(5) of the
Indian Competition Act 2002 contains an exemption provision relating to the use of IPRs, which
allows for the fair use of these exclusive invention rights. Section 3(5)4 of the Act defines “fair
use” as requiring IP holders to impose “reasonable terms” on their IP security licences without
causing competition law issues.

Section 3(5) of the Indian Competition Act 2002, on the other hand, finds its limit in Section
4(2) of the Indian Competition Act [14], which states that a misuse of a dominant position occurs
when an undertaking imposes unjust and discriminatory requirements or rates on the purchase
and/or sale of products.

As a result, to the detriment of customers, the interests of IPR holders impose restrictions on
their use. This means that IPR holders will not impose arbitrary constraints on inventions while
licencing their IPR under Indian law. There is no set list of “unreasonable” restrictions, and most
of the time, this choice would have to be made on a case-by-case basis.

For example, Sections 83(f) and (g) of the Patent Act of 19705 state that a patent proprietor or
an individual acquiring title or interest in a patent shall not engage in activities that
‘unreasonably' restrict trade or negatively impact the international transfer of inventions, and that
the patented invention should be made available to the public at fairly fair rates.

4
Indian Competition Act, 2002
5
The Patents Act, 1970
 CONCLUSION

Following the analysis, it can be stated that IPR is a right, whereas Competition law is a
governing body that establishes rules for the manufacture, supply, distribution, and storage of
goods, among other things, to be carried out by the firm while operating the market. IPR is
defined as a benefit given to the inventor of a product or author of a script that allows them to
use it exclusively for a set length of time. We may support this statement with the labour theory,
which states that a person is entitled to the benefits of all hard and labour effort.

Both rules appear to be contradictory in nature, but as we can see from the above study, they are
not. Both laws are complementary to one another, and one enters the scene when the other is
misused. Competition law aims to provide customers with a wide range of options and to strike a
balance between the manufacturer's and the customer's rights by maximising profit while
providing a high-quality product at an affordable price. IPR also permits the producer to be
compensated for the product's unique creation, which benefits the general public.