Patents Act overrides the Competition Act

July 24, 2023

GS Paper III Indian Economy

Context:

The Delhi High Court ruled that the Patents Act, will take precedence over the Competition Act concerning the exercise of rights by a patent holder.

About the Case:

The case involved appeals by agrochemical company Monsanto and telecom company Ericsson, along with the Competition Commission of India (CCI).
CCI initiated “antitrust investigations” against Monsanto and Ericsson for alleged anti-competitive practices related to patent licensing.
The key issue was whether CCI had jurisdiction to investigate actions of a patentee or if it was solely under the Patents Act.

What are antitrust laws?

Antitrust laws are rules that promote competition by restricting a firm’s ability to dominate the market. This frequently entails dismantling monopolistic firms as well as making sure mergers and acquisitions don’t excessively concentrate market power.

Verdict:

The Court ruled that the Patents Act must prevail over the Competition Act on the issue of the exercise of rights by a patentee under the Patents Act.
Complete Code in Patents Act: The court stated that Chapter XVI of the Patents Act comprehensively deals with unreasonable conditions in patent licensing, abuse of patentee status, inquiries, and relief.

About Patents Act:

Definition: A patent is an exclusive right granted for an invention under the Patents Act 1970.
- The patent provides the holder with the sole authority to use, sell, or license the invention, preventing others from doing so without permission.
Patentee under the Patents Act: According to the Act, a patentee is the person whose name appears on the register of patents as the “grantee or proprietor of the patent.”
Register of Patents: The register of patents is maintained by a government patent office, which is present in four cities across the country.

Additional Information:

About Competition Commission of India (CCI):

It is a statutory body responsible for enforcing the Competition Act, 2002.
It was constituted in March 2009, replacing the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) on the recommendations of the Raghavan committee.
Composition: The CCI consists of one Chairperson and six Members appointed by the Central Government.
- It is a quasi-judicial body that provides opinions to statutory authorities and deals with various cases.

The Competition Act, 2002:

The Act prohibits anti-competitive agreements, abuse of dominant position, and regulates combinations that adversely affect competition within India.
The Act led to the establishment of the Competition Commission of India and the Competition Appellate Tribunal (COMPAT).
- COMPAT was replaced by the National Company Law Appellate Tribunal in 2017.

News Source: The Livemint