CCI v. Patents Act: The Battle of Jurisdiction of Matters Related to Patents Act

After Independence in the year, 1947 India was introduced to a mixed economy model. In the mixed economy model both the public and private sectors co-exist. The main intention behind the same was to ensure the effective role of Government in the economy. When in 1991 under the leadership of P.V. Narsimharao the New Economic Policy was introduced to us, it opened the doors of the Indian market to the whole world. This was the time when India was introduced to the global players in every market one can ever think of. At this time the MRTP Act, 1969 was governing the Indian private sector but due to its limited scope, there was a need for its successor. The Raghavan Committee which was made to come with a solution came up with a new Act. i.e. Competition Act, 2002. Since the inception of the Act, there have been numerous times when there was a question raised related to jurisdiction. One of the most discussed and frequently raised questions of jurisdiction as between the Patents Act, 1970 and the Competition Act, 2002.

IPR and Competition Act, 2002
The Competition Act was made with the intention of ensuring fair trade and to prevent anticompetitive practices with minimal intervention from the side of government. Therefore, the main agenda of the Competition Act, 2002 is to ensure that there are no anti-competitive practices like anticompetitive agreements, abuse of dominance or combinations which are in contravention of the Act and are carried out. The main intention behind the laws relating to Intellectual property rights is to encourage innovation by protecting the innovator and by giving incentives to the innovator. Thus, giving an exclusive monopoly rights for a limited period to the innovator so as to enjoy the fruits of his innovations which later will come in public domain. Therefore, it can be established that the rights enumerated in IPR related law will be concerned with the interest of innovator whereas the Competition Act is concerned with the interest of consumers and fair competition. Thus, creating a basic clash between these Acts.

Patents Act, 1970 vs Competition Act, 2002
Section 3(5)(b) of the Competition Act clarifies that nothing contained in section 3 of the Act which deals with “anti-competitive agreements” should encroach the rights available to a person under Patents Act, 1970. Thus enabling the person to enter into agreements that benefit him exclusively. But if we concentrate on the wordings of section 3(5), it also includes the word “reasonable” and thus empowering the CCI to find whether the condition imposed is satisfying the demand of the word “reasonable”. Thus, creating a route to interfere with the Patent Act.
It is not just that the cross-connection between the acts is limited to clear wordings of section 3(5) but the main clash rises with the wordings of section 4 of the Competition Act. Section 4 of the Competition Act deals with “Abuse of dominant position”. Therefore, if there is an abuse of dominant position by an enterprise or a group then the same will fall into the purview of the Competition Act, 2002. But the topic of abuse has also been taken care of by section 83(f) the of Patents Act, 1970 which ensures that there should not be any abuse of patent right which unreasonably restrains trade. Thus enabling the Patents Act to look into the matters related to abuse.
Now the main question arises that what will happen if there is abuse in relation to patents that are affecting the market? Where should the jurisdiction lie? Whether the matter should be governed under the Patents Act or Competition Act?

Telefonaktiebolaget Lm Ericsson (Publ) Vs. Competition Commission of India And Another
The issue related to Jurisdiction was deeply dealt with in the case of Telefonaktiebolaget Lm Ericsson (Publ) Vs. Competition Commission of India And Another.
In this case, the arguments on which the Petitioners placed their reliance on was mainly revolving around that the CCI does not have the jurisdiction on matters related to Patents because the Patent Act, 1970 being a special Act should prevail over the Competition Act, 2002 which is a general Act. It was also argued that the Patent Act already covers the aspect related to abuse of patents and thus there was no need for the intervention of CCI. In reply to which the counsel on behalf of CCI said that “the provisions present in the Competition Act are in addition and not in derogation of any law”. It was also contended on behalf of the CCI that the CCI is not concerned with the grant and exercise of rights of the patent but is more concerned to ensure the compliance of section 3 and section 4 of the Act. While arguing by the side of respondents it was said that “a non-obstante clause was a well-recognized device for giving an overriding effect to certain legislative provisions” and to substantiate this argument the decision of the Supreme Court in the case of Union of India v. G.M. Kokil was referred.
It was observed in this case that facially there might appear a contradiction among the Acts but there is no actual contradiction when reading carefully. It was held that as there is no irreconcilable repugnancy between both the Acts and in absence of any irreconcilable conflict between the two legislations, the jurisdiction of CCI cannot be ousted in regards with abuse of dominance.
Therefore, in this case, the court came to the conclusion that the jurisdiction of CCI under the Competition Act, 2002 cannot be ousted by Patents Act, 1970 and thus, in this case, the Jurisdiction of CCI prevails.


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