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INTELLECTUAL PROPERTY RIGHTS AND COMPETITION LAW: CONSENTING ORCONTESTING Dr. Ravi Vyas
(Assistant Professor, St. Paul Institute of Professional Studies, Indore, MP)
Abstract - When the world became Free Trade Zone in 1994 under GATT Agreement and after Trade Related Aspects of Intellectual Property Rights (TRIPS) comes into effect in 1995, the discussion has been raised within underdeveloped countries about securing and saving their local economies and indigenous trade. It is known fact that Intellectual Property Rights offers an absolute usage of the right of the innovation or invention for the inventor and innovator. It offers a right of the reward, a monopoly right for innovator by preventing other companies to offer their goods in the same marketplace. But this condition on the other hand forms the market exploitative and monopolistic. And thus, requirement was observed to have and other law to counter Intellectual Property Laws, it is Competition Law.
The Competition law is passed to evade the ill use of the monopoly power granted under Intellectual Property Law and to control misuse of monopoly power. The Competition Act, 2002 has extensively acknowledged the purposes of IPR while provisions are so framed that it does not eradicate the supremacy of an Innovator arisen due to such Intellectual Property Rights. The present study is an approach to see whether the intentions of both Intellectual Property Right Law and Competition Law has been achieved or not. Are these two laws acts as completing or competing role with each other.
Keywords: IPR, TRIPS, Competition, Indian Competition Act, etc.
1 INTRODUCTION
Intellectual Property is a type of property which includes creation of intellect or brainpower for producing more sophisticated goods and services, work, inventions, experiments, methods or processes. The person who innovates such things is the whole sole owner of the Intellectual Property and such right is called as Intellectual Property Right of the holder.
This is also known as IPR or IPRs. The IPR gives an advantage of monopoly use to the creator or innovator to exploit his or her innovation for reward of the invention or innovation or creation for a limited period of time. The holder of IPR normally Patent their IPR for innovation or invention or creation. Generally, the life of an IPR is 20 years or less.
On the other hand, Competition Law is a rule to regulate market competition and prevent anti-competition behaviour generally resulted through monopoly competition or coordinated action in the economy by any group of groups of people, corporates, etc. Such one-sided or matched actions may include charging excessive prices, anti-competitive tie-ups, rejection to Licence, abuse of dominance or Monopoly, Cartel conduct, etc. Competition law usually frames policies for healthy competition in an economy and prevent anti-competitive practices by people and corporates.
Thus, both IPR and Competition Law are seams conflicting with each other. This paper focuses on the arguments for whether the two laws are really have completing or competing actions with each other. For any economy continuous Research, Innovation and Development is very necessary for growth and progress. Saving the rights of the innovator is also the prime responsibility of the law as it will motivate and encourage them for more exploring more sophisticated products and services. On the other hand, the law also has to regulate the unethical use of monopoly right on the invention or innovation. Hance, actions should be taken to make sure that competition law should not disturb, hurt or discourage knowledge-based economy follow-on through innovation.
1.1 Rationale and Objectives
With increasing consumerism there is a positive pressure on the producers to regularly innovate and develop their products. This gives an advantage to the people who involve in innovation and invention as they have monopoly right for their creation but on the other hand it gives an opposing situation for easy availability of the product for mass population.
Hence, Competition Law guard consumers. But there is a very thin line of demarcation for between the interface of the two disciplines and, here the conflicts between the two
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emerges. The paper aims to find through some legal events,the way how these two jurisprudences complementing or contending with each other.1.2 Research Methodology
Present study is conceptual and the data is gathered after studying various research papers, books, journals, laws, case laws, legal judgements and official websites. The information is processed and presented in desired manner.
2 REVIEW OF LITERATURE
Patel, et al. (2011) in their paper highlighted the meaning of IPR and Competition Law. They also pointed the areas of conflict between both and showed ways to harmonies them as well.
Dumont, B., & Holmes, P. (2002), pointed in their study the conflicting cost and benefits of IPRs on the basis of competition and economic efficiency.
Ghidini, G. (2006) in his book has given a very detailed description of all the aspects and contents of both IPR and Competition Law.
Régibeau, P., & Rockett, K. (2007) in their book presented detailed description of IPRs types and Competition Law and the Economics consequences because of the conflict between both the terms.
Correa, C. (2007) in their article presented the interaction between IPR and Competition Law specifically raising some important issues in the Developing Countries.
Shankar, G., & Gupta, N. (2011) in their paper showed how both IPR and Competition Law changes their position from divergence to convergence giving examples from European Union‟s market economy laws.
Kumar, N. (2003) in his paper highlighted IPRs and TRIPs agreements and their effect on Asian Countries specially in the areas of Technology, Medicine and Economy.
Raju, K. D. (2013) in his article stressed how Indian Competition Law is incapable to deal with Intellectual Property Protection. He suggested the ways to collaborate both IPRs and Indian Competition Law.
Vats, N. (2011) in his study discussed about interaction between IPRs and Competition Law and emphasized the points how both the realms can work together for the welfare for consumer and consumer‟s rights.
2.1 Safeguarding of Intellectual Property Rights under Competition Act 2002
Section 3(5)(i) of Indian Competition Act 2002 safeguards Intellectual Property rights of the holder. It allows the holder of IPR to include a condition of „Reasonable Use‟ of the innovation of the person under an agreement to guard the rights of innovator. It is having a wide coverage of this section of the law on other prevailing laws. Including Copyright Act 1957, The Patent Act, The Trade and Merchandised Act 1958, The Trade Mark Act 1999, The Geographical Indications of goods (Registration and Protection) Act 1999, The Design Act 2000 and The Semiconductor Integrated Circuits Layout Design Act, 2000.
In the simple words section 3(5)(i) gives exceptional right to the innovator to execute
„Reasonable Conditions‟ in the agreement for safeguarding their Licences to secure their Intellectual Property Protection, without causing any Competition Law refutation issues.
This power may be seeming as a position of „Dominance‟ of the IPR holder but for the country like India it is a need of giving a balanced approach of powers to both the innovator and the Licence Holder for the uninterrupted economic growth. So, in short it can be resolved that a „Justifiable Monopoly Power‟ may not be seen as abuse of the „Power‟.
Remarkably, the same „Reasonable Monopoly Power‟ of the Patent holder is defined under Patents Act 1970. As per section 83 (f) and (g) of the act is clearly mentioned that Patent Right is not abused by the patentee or the person deriving such title to work in such a way that it may harm the Trade adversely and the patent right are approved to make the advantage of Patented Invention available at reasonable prices to the community.
2.2 Divergence between Intellectual Property Right and Indian Competition Act 2002
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As per the report of Working Group1 constituted by Planning Commission of India to study Competition Policy in 2007 stated in the para 5.1.7 that all forms of IP may likely raise Competition problem. This is because IP provides exclusive rights to the holder to engage in commercial or production activities enjoying the patronage with the available right on Intellectual Property. This right is known as „Dominance‟ or „Monopoly Right‟ of the holder.it is good also as it gives a freedom to the creator for enjoying his/her innovation and for more development in the product of service and on the other hand to avert others to use his/her innovation. But, at the same time, there is a necessity to control and stop anti- competitive behaviour that may ascend while the holder exercises the IP right.
In the same report under para 5.1.8 pointed out that in situations of contradiction between Intellectual Property Rights and Competition Policy Rules the supremacy of Competition Law will prevail as IPR shrinks competition and Competition Law expands the scope of the healthy opposition. Anti-Competitive Trade Practices are very essential for the growth of the economy and for the wide interest of public.
As per Section 4 (1) of Indian Competition Act2 2002 says that, “No enterprise shall abuse its dominant position.”
Section 4(2)(a) and (b) says, “There shall be an abuse of dominant position under sub-section (1) if an enterprise directly or indirectly imposes Unfair or Discretionary condition in purchase or sale of goods or services. Limits or restricts production of goods or provision of services or market, therefore, or, Technical or Scientific Development relating to goods or services to the prejudice of consumers.”
Further in Section 4 (1) (d) and (e) says, “Makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts or Uses its Dominant Position in one relevant market to enter into, or protect, other relevant market.”
The above discussion it is very clear that the holder of Intellectual Property has the best right over his/her creation, innovation or invention but in the situation of the misuse of such „Monopoly Right‟ whenever observed then, the Competition Law will come it to force to make the things go in the right way.
In the notable judgement given by the court of law in case of Vallal Puruman &
Others V. Godfry Phillips India Ltd. the court stated that the trademark owner has right to use it in a reasonable manner as per the terms and conditions mentioned at the time of grant of Trademark but the Trademark owner should not abuse the Trademark and is not allowed to manipulate, distort or contrivance it.
In another remarkable judgement in the case of Amir Khan Production Pvt. Ltd. V.
Union of India, the court of law led that “the Competition Commission of India (CCI) has the power to deal with the cases of Intellectual Property what can be contested before Copyright Board can also be contested before Competition Commission Act 2002, has overriding effect over other legislations for the time being in force.”
In the same way in another case of Kingfisher V. Competition Commission of India, the Bombay High Court gave the decision that “All the defences which can be raised before Copyright Board can also be raised before CCI. Hence, the Competition Law does not bar application of other Laws.”
3 CONCLUSION
After the whole discussion it is clear that Intellectual Property Right is a right associated with an individual person whereas Competition Policy is a rule for every individual. The former has a characteristic of a Right on Property whereas the latter has a characteristic of Duty for Law for smooth functioning of state. No doubt, an innovator has to work with huge labour and perseverance to give shape to his/her creation. Such exertion must need honour and reward but the recompense should not be on the price of „Unethical Dominance of Position‟ which effects welfare of the society at a large and hinders economic growth. Thus,
1 https://niti.gov.in/planningcommission.gov.in/docs/aboutus/committee/wrkgrp11/wg11_cpolicy.pdf
2 https://www.cci.gov.in/sites/default/files/cci_pdf/competitionact2012.pdf
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whenever it appears that an IP right is hurdling in fair competition, then the Law will come to rescue the society.REFERENCE
1. Correa, C. (2007). Intellectual property and competition law: exploration of some issues of relevance to developing countries. ICTSD IPRs and sustainable development programme issue paper, 21.
2. Dumont, B., & Holmes, P. (2002). The scope of intellectual property rights and their interface with competition law and policy: divergent paths to the same goal?. Economics of Innovation and New Technology, 11(2), 149-162.
3. Ghidini, G. (2006). Intellectual Property and Competition Law: the innovation nexus. Edward Elgar Publishing.
4. Kumar, N (2003). Intellectual property rights, technology and economic development: Experiences of Asian countries. Economic and Political Weekly, 209-226.
5. Patel, A., Panda, A., Deo, A., & Khettry, S. (2011). Intellectual property law & competition law. J. Int'l Com. L. & Tech., 6, 120.
6. Raju, K. D. (2013). The inevitable connection between intellectual property and competition law:
Emerging jurisprudence and lessons for India.
7. Régibeau, P., & Rockett, K. (2007). The relationship between intellectual property law and competition law: an economic approach
8. Shankar, G., & Gupta, N. (2011). Intellectual property and competition law: divergence, convergence, and independence. NUJS L. Rev., 4, 115.
9. Vats, N. (2011). Intellectual Property Rights versus Competition Law. Kurukshetra Law Journal, 1, 188- 210.
