• Competition law deals with an efficient
mechanism to counter anti-competitive
agreements, regulating mergers and acquisitions,
restricting the use of dominant position etc.
• On the contrary Intellectual Property Rights tries
to strike a balance between the rights of the
owner and social interest. It helps the owner of
the intangible property gets exclusive right and
commercial value for his intellectual creation.
• On the one hand it is important to boost the spirits
of the inventor and on the other hand,
competitiveness in the market should also be
controlled.
• However, they are also related in certain areas.
• IPR provides a chance for technological innovation,
which in turn create more products and results in
the dynamic growth of the product, which is
considered one of the aims of the competition
policy.
Free Market System
• Manufacture identify how much product
should be produced what will be the capital
invested for invention or innovation .examples
of new products and also determine the price
and the product. The government has no role
in it .it reject the monopolistic behaviour of
the producers.
Criticism
• In this, there is a direct relationship between
service provider or producer or manufacturer
and consumer. So through this system, the
manufacturer takes unfair advantage of the
consumer easily for the profit and the
untamed competing interest cause an
unbalanced in country economy or market.
Regulated Market System
• Business, trade (buying and selling) are governed
through different regulatory bodies and they are
controlled by the state. It is done to prevent unfair
trade practices and to prevent a monopoly.
• There are a check and balance for monitoring the
activities of the suppliers through different legislation.
• It also compels the manufacturer to produce the
various products that are essential for the livelihood
of the public at large and for improving the economy
of the nation.
Criticism
• When an excessive restriction is imposed on
the economy as it will prejudice the economy
rigid as there will be no or minimum flexibility
in operation.
• Where there will be less flexibility than heir
will be less invention or innovation, as a result
of the consumer fails to get what they want
actually etc.
• The main objective of permitting license in IPR
is to encourage competition among the
prospective innovators and concurrently
restrict the competition in several ways and
after a specified period, the rights go to the
public domain ending the competition.
• The primary objective of competition law is to
stop the abusive practices in the market,
stipulate and encourage competition in the
market and make sure that customers get the
proper product at an affordable price with
improved quality.
Preventive Measures
• Two methods have been used to prevent the
abuse in IPRs:-
• Compulsory licensing (a contract which is
involuntary between a willing buyer and an
unwilling seller is enforced by the
government.)
TRIPS
• Under Article 31 of the TRIPS Agreement
provides for the grant of compulsory licenses,
under the following situation:-
• In the interest of public health
• In case of national emergency
• Anti-competitive practices
Parallel Imports/ Grey Market
• The concept of “Parallel Imports” in the context
of trademark laws means the procurement of
goods from the trademark owners or their
authorized personnel through legitimate trade
channels in a different market (mostly in a
different country) and thereafter importation
of such goods without the knowledge of the
trademark owners of such products for sale to
the general public in a different market.
• Section 3 of the Indian Competition Act specifies that:-
• “No enterprise or association of an enterprise is allowed
to make any agreement about production, distribution,
supply, acquisition, storage, controls of goods or
provision of services, which will have a significant
adverse impact on competition within India”.
• In general word, it means that it restrains the enterprise
or group of the enterprise to enter into any agreement
relating to any activities which will hurt competition. It
is limited to India.
Section 3(5)
• (5) Nothing contained in this section shall restrict—
• (i) the right of any person to restrain any infringement of, or to
impose reasonable conditions, as may be necessary for protecting
any of his rights which have been or may be conferred upon him
under:(a) the Copyright Act, 1957 (14 of 1957);
• (b) the Patents Act, 1970 (39 of 1970);
• (c) the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the
Trade Marks Act, 1999 (47 of 1999);
• (d) the Geographical Indications of Goods (Registration and
Protection) Act, 1999 (48 of 1999);
• (e) the Designs Act, 2000 (16 of 2000);
• (f) the Semi-conductor Integrated Circuits Layout-Design Act, 2000
(37 of 2000);
• Section 3(5): It talks about the exception. it talks
that competition law does not affect the IPR rights.
But if we study the Section 3(5) with Section 4 then
we find that it also restrains the IP holders to abuse
its dominant position and if they misuse its
dominating position then competition law will
come into the picture.
• From this, we can conclude that they are
supplementary to each other rather than
contradicting it.
Case Laws
• 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.21
• 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.18
• 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.
• FICCI Multiplex Association of India vs United
Producers Distribution Forum
• In this particular case the main question was whether
the competition in the market affects the right of the
copyright holder. the court observed in the above case
that the right granted to the copyright holder is not
absolute right but it’s a statutory right under the
copyright Act, 1957. The European courts of justice also
held that the objective of IPR is to encourage
innovation in all areas and further provide commercial
gain.
