The Anti-Trust law regulates mergers and acquisitions, restricts the use of dominant position in order to maintain a healthy competition in the economy. The Intellectual Property rights on the other hand attempts to strike a balance between the rights of owner and public interest. Intellectual Property rights confers the owner of the property with exclusive rights and commercial value in order to reward the owner for its creation. Since IPRs grant exclusive rights and monopolies, they are prima facie incompatible with competition policy. On the one hand, it is important to lift the inventor’s spirits, while on the other hand, market competition must be managed. They are, however, complementary in some ways; IPR allows for technological advancement and, one of the purposes of competition policy is to encourage the creation of more goods and the dynamic evolution of the product.
PATENT AND COMPETITION LAW
Patent law is supplemented by legislation, which aids in the establishment of fair market behavior by prohibiting the unauthorized manufacture and sale of proprietary goods, which is also the primary goal of competition policy. And when the patent owner uses their invention in a way that subverts the object of patent rights and is incompatible with their essential role does competition become an issue. Granting a right to the patent owner would not constitute antitrust infringement, but abusing the rights would constitute a breach of antitrust policies. Patent rights are granted for a certain period of time, such as twenty years from the date of filing. If such rights are granted for an indefinite duration, monopoly control is abused, and competition is stifled by restrictions on product invention and innovation. When the patent owner is granted exclusive rights to prevent competitors from entering the market, a monopoly law is invoked. It enters the picture to foil an unfavourable business situation.
The mere award of a Patent right does not constitute an antitrust violation; nevertheless, the misuse of that right constitutes an antitrust violation. Patent rights, like other IP rights, are limited in time; otherwise, monopoly control will be abused, and competition will be stifled by stifling product innovation. As a consequence, a proper safety mechanism is framed to authorize patents only for inventions that benefit the public. A circumstance can arise in which an exclusive license completely prohibits other companies from entering the market; in this case, competition law must be implemented to avoid such unfavourable market activity, if the company having the patent is showing signs of Abuse of Dominance.
COMPETITION ACT OF INDIA AND IP RIGHTS
India did not have a competition legal system until 2002. The Monopolies and Restrictive Trade Practices Act (“MRTP”), passed in 1969, was the previous regime. The Competition Act, passed in 2002 and revised in 2007,90, was intended to replace MRTP. Since then, the relationship between IP and competition has been a source of constant debate among experts. The capacity of India’s competition regime to deal with market power generated by IP became very important in light of global changes, including the obligations under the TRIPS and the resulting amendments to the IP regime in India. There are other provisions of the Competition Act that deal with the same thing.
As per the Statement of Objects and Reasons, the Competition Act is being enforced, among other things, to discourage activities that harm competition and to encourage and preserve competition in markets.
The competition policy of India recognizes the importance of intellectual property rights and frames its policies accordingly. The exception allows the IPR holder to enforce fair conditions to secure the rights granted by the applicable IP law, ensuring that IPRs are not frustrated. However, for a variety of reasons, such an exemption has not been carved into Section 4 of the Competition Act. To begin with, IPRs does not confer a dominant position in the market; as previously stated, the legal monopoly granted by IPRs does not always imply an economic monopoly, and it is the latter that is the focus of competition law. Second, even though IPRs do grant a dominant position, the mere presence of market force is not prohibited under Section 4 of the Competition Act; it must amount to a dominant position violation. Competition policy is willing to tolerate any superiority that can arise from the holder’s exercise of IPRs; competition law only intervenes where this amounts to violence. In the scenario wherein there occurs such an abuse the fact that the source of market dominance is IPR do not hold any relevance. There Section 4 of the Competition Act does not make an exception for the IPR sourced market power.
There is no question that in today’s economy, intellectual property and competition play complementary roles in achieving the ultimate objective of consumer welfare security. IP encourages creativity, which in turn encourages market competition. However, the direct and immediate interests of these two domains of law do conflict to the point that some mode of reconciliation – a middle route – is required.
IP must deal with the grant and functioning of property rights, while competition law would need to deal with the manner of exercise of these rights, only with reference to their effect on the market. The difference between policy decisions and individual case decisions needs to be maintained. Such separation is essential in order for both areas to be able to efficiently fulfil their goals and in the long-term complement and supplement each other. Such separation is essential in order for both areas to be able to efficiently fulfil their goals and in the long-term complement and supplement each other