The intersection of IPR and Competition Law 

Intellectual property rights law and competition law have been treated as conflicting in nature as their goals seem to be at loggerheads. But...

Published: 16th September 2021 12:40 AM  |   Last Updated: 16th September 2021 08:58 AM   |  A+A-

Therefore, Indian policy needs significant amendment with regards to substance and procedure for dealing with cases where IP and competition law. (Representational Image)

Intellectual property rights law and competition law have been treated as conflicting in nature as their goals seem to be at loggerheads with one another. The scope and timing of the laws getting triggered is also different in the sense that IP law comes into effect when there is creation of an asset; however the competition law only gets triggered when there is a use. Moreover, the grant of such right is not dependent on the market power that exists under the IP law.

But a deeper understanding will reveal that this is not entirely true, and the purposes of the Acts are rather complementary. Since India is a developing country, the probable economic loss due to not taking the complementary nature into account is very important for its development in the international sphere. Therefore a stronger and more efficient framework is required for facilitating the intersection of the two laws. 

A closer look at the Competition Act will allow us to see that the Competition Commission of India has the powers to undertake consultation with other sectoral regulators but this remains partially addressed and insufficiently implemented as they are not mandatory in nature or binding for that matter.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) also appeals to developing countries to build a stronger intellectual property right enforcement regime. Therefore it is important to take the international obligations and international jurisprudence into account as well. The EU and the US have taken a balanced view in this regard. They treat abuse of dominance by the intellectual property right holder as an exception as opposed to a general rule. Since Indian jurisprudence has taken a lot from the common law especially in cases of economic laws, both the approaches of the EU and US can lend support to policymakers for arriving at a reasoned decision or formulating a flexible policy in cases of intersection between IP rights and competition law. 

For this, recognising that intellectual property is in fact a form of competition policy is important and that they are inseparable. The goals and policies of the two laws will always be compatible with each other so long as the domain of the rights are limited to their own sphere and do not transgress the boundaries set by the other law. The recognition of the fact that there may be times when there is overreach by competition law in the sphere of IP law where it is not even required is important. Therefore, a reconciliation between the two laws is important to avoid this conflict.

It may also be noted that CCI has a residuary but an important power to grant any relief that it may deem fit under Section 27(g) of the Act. This power may also be used sparingly in cases where competition is hampered excessively, to grant and distribute IP among competitors and maintain the balance in the market. This argument is further bolstered by the fact that there is a compulsory licensing regime in India, for example in India the Patent Act, 1970, Section 84 allows for compulsory licensing on three grounds.

The anticompetitive effects of patent pooling should also be borne in mind while considering the principles of competition law. The complementary patents that can be pooled are not supposed to generate anti-competitive effects because of the monopoly or the monopolistic competition that might have been created.

In the US, it is treated as a concrete asset and post-merger evaluation of the market share is done whereas in the EU, it would not have been a significant consideration although it is taken into account. In India, although there has not been any specific case for application of competition law and IPR under combination regulations and combination in general, which is governed by Section 6 of the Competition Act, intellectual property forms a very big and concrete set for merging parties and it should not be overlooked while giving a decision and go-ahead on a merger. This is extremely important as IPR is now gaining importance as a very powerful asset for a particular company and may even lead to market concentration.

Therefore, Indian policy needs significant amendment with regards to substance and procedure for dealing with cases where IP and competition law seem to intersect. 

Kavya Lalchandani 
Legal scholar based out of Delhi



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