Interface between IPR And Competition
Competition law and intellectual property law has different occupied field and enacted to
cater distinct objectives. There is a dire need to understand the smooth functioning of the both
the laws. Competition law regulate those practices which has anti-competitive effect on
market and thus hampering the smooth functioning of the market. On the other hand, IPR
talks about the exclusive monopoly right to the holder. The non-excludable character that has
been created by IPR that causes deadlock between the two essentially which creates interface
between two respective laws. Thus, it creates a tussle between the IPR and Competition laws
which needs to be resolved cordially.
IPR is usually used as a tool to create exclusive monopoly rights to the holder and thus
deterring other players from offering the products in the same market which reduces
competitiveness in the market and led to creation of conflict between objectives of both the
law. IPR is based on the concept of reward theory means the reward the inventor who has
disclosed to the society at large which further intensifies the bone of contention. However, by
observing the objectives there is an undisputed opinion that both the laws promote consumer
welfare and innovation. Competition law is enacted to avoid the misuse of the monopoly
power granted under the statute which is widely traced in different before enacting such
legislation to control abuse of monopoly power. The Competition Act, 2002 has widely
accepted the intentions of IPR while framing provisions and it does not eliminate the
dominance achieve by an individual due to such Intellectual Property Rights. Thus, a
balanced approach is required to harmoniously construct both the statute and to clarify much
upon that different jurisdictional opinion has to be taken into consideration.
With the advancement of jurisprudence pertaining to harmoniously construct both the laws it
is necessary to critically analyses the issue in great detail. Every subject matter of IPR need
not be in derogation with competition law. the IPR creates dominant but there is no
reasonable inference that it leads to abuse of dominant position.
STATUTORY FRAMEWORK
The Competition Act 2002 was enacted on the pedestal of economic efficiency and
liberalization. it promotes social, economic and political justice for the people. Competition
law was enacted to fulfill the mischief created by MRTP Act with inclusion of vigorous
Provisions and in compliance with TRIPS. Section 3 talks about anti-competitive agreements
but section 3(5) talks about the interface between the laws which provides blanket exception
to IPR related licensing agreement to promote innovation in the market but it also regulates
the practices which causes Appreciable Effect on Market by abusing such dominant position
under Section 4.
There are plethora of cases observing the interface between IPR and Competition laws. In
the Aamir Khan Productions Pvt. Ltd. v. Union of India, the Bombay HC held that CCI has
jurisdiction to hear all the matters vis-à-vis competition law and IPR. CCI also held that IPR
related right is not sovereign in nature but merely a statutory right granted under a law.
In Entertainment Network (India) Limited v. Super Cassette Industries Ltd, the Supreme
Court reiterated on the issue related to conflict between two laws. The court observes that
even though the copyright holder has full monopoly but the same is limited in the sense that
if such monopoly creates disturbance in smooth functioning of the market will be in violation
of competition law and same was in relation to refusal of license. Undoubtedly, IPR owners
can enjoy the fruits of their labour via royalty by issuing licenses but the same is not absolute.
In Union of India v. Cyanamide India Limited &Another, it was held by the court that
charging excessive prices on life saving drugs is within the ambit of price control and CCI
has jurisdiction over such matter. In case of scarcity of substitutes there is always a peril of
creation of monopolies which disturbs the economic efficiency in the market. Further, in
different jurisdiction same principle was reiterated.
