RELATION BETWEEN COMPETITION LAW and IPR

Both IPR and Competition law are interdependent and connected. The Competition Act, 2002 was enacted for the establishment of Competition Commission of India(CCI) so that it can prevent the practice of having an adverse effect on competition, to promote and sustain competition in markets and to protect the interest of consumers so as to ensure the freedom of trade. On the other hand, Intellectual property confers an exclusive right to the owners. The intellectual property laws & competition law ensure that the owners do not abuse their exclusive rights. The TRIPS Agreement enables members to specify licensing practice or conditions in their legislation that may constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market[1]. However, in recent times, both IPR and Competition law has one like feature viz consumer welfare.

OBJECTIVES

The reason why IPR and Competition law are contrary to each other is that IPR grants a monopoly to the innovators of the new product, to which others have no access and on the other hand Competition law is against the abuse of monopoly position. The primary objective of competition law is to stop the abusive practices in the market, encourage competition and make sure that the customers get good quality goods & services at a reasonable price. On the other hand, the main objective to grand licence to IPR is to encourage competition among the prospective innovators by restricting them initially and after a specified period, the rights go to the public domain. Thus, it can be concluded that IPR is about individual rights where the owner has a monopoly right over his invented product for a specific time period whereas Competition law talks about the community as a whole.

NEXUS

Competition law may be applied when particular IPRs have been fraudulently obtained, for example, when patents have been obtained by deceiving the patent office.  When a patent holder adopts any kind of anti-competitive practice, the government can adopt compulsory licensing as a measure under Section 31(b) of WTO of TRIPS Agreement. Competition Law is always regarded to eliminate monopoly and encourage competition whereas IPR eliminates the competition by providing licence to the inventors of a new product which encourages monopoly. So, how are the two laws connected to each other? Well, the aims & objectives of competition law and IPR are that they both encourage innovation, competition and to enhance consumer welfare. Sections 3 & 4 suggest that there is some connection between the two laws.

Section (3) of the Indian Competition Act, 2002 prohibits anti-competitive practices, but does not restrict the right of any person to restrain or impose reasonable conditions which may be necessary for the protection of that person’s right which have been conferred under IPR laws like Copyright Act, 1956, Patents Act, 1970, the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999), The Designs Act, 2000[2]. Section 3(5) of the Indian Competition Act, 2002 exempts reasonable use of inventions which are obtained by fraud and the section protects reasonable conditions imposed by the IPR holder.

Section 4 of the Indian Competition Act, 2002 deals with abuse of dominant position. There are no exceptions to IPR in this section for the sole reason that may be IPR may not confer dominant position in the market. Section 4(2)of the Indian Competition Act, 2002 which is also equally applicable to IPR holders deals with the fact that action by enterprises are to be treated as abuse.

Under the case of Entertainment Network (India) Pvt. Ltd. vs. Super Cassette Industries Ltd, the court observed that even though the copyright holder has a full monopoly, such a monopoly is also limited if it creates a disturbance in the smooth functioning of the market, which will violate Competition Law and the same was with the refusal of license[3]. In the case of Union of India v. Cyanamide India Limited, the court stated that the issue of selling life-saving drugs for exorbitant prices is under the ambit of price control. In a situation where customers have the choice to select amongst limited options, there is always the concern of a particular product gaining hegemony, which interrupts the economic competency of the market[4].

CONCLUSION

To understand the relationship between Intellectual property Right and Competition Law one must understand that IPR provides rights while Competition Law is a set of regulations[5]. It may seem that IPR and Competition laws oppose each other but through the analysis provided it can be concluded that from the goal & objective, both the laws complement each other. It is essential for the public that consumers have access to quality products at affordable prices and a variety of options at the same time. IPR intends to grant the manufacturer his due for being an innovator. Both these laws cannot achieve their objective separately but need to be understood through the lens of similarity, for them to accomplish what they intended.


[1] Ahuja V.K Law relating to intellectual property, p-11.

[2] Anusha C Gudagur-The Relation between Competition Law and Intellectual Property Rights, The Relation between Competition Law and Intellectual Property Rights (IPR) – Indian Law Portal, visited on 15-07-2021 at 18:31hrs.

[3] IBID.

[4] Sheen kaul-The Nexus between IPR and Competition Law, The Nexus between IPR and Competition Law (legalbites.in), visited on 15-07-2021 at 19:16hrs.

[5] IBID.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at adv.aishwaryasandeep@gmail.com

We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.