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The Competition Act, 2002 as well as the Patents Act, 1970 are the two statutes which are in close connection when the regulation of competitive forces in the market is the concern. When you look at these at laws, at the first instance you will find that these laws are in contradiction to each other but this apparent conflict somewhat has been resolved in the previous years. This is due to the fact that both the legislation were aimed to encourage competition, innovation, and industry.
What the CCI Says
The matters related to the anti-competitive agreement within the ambit of Intellectual Property Rights have been enumerated in Sec. 3(5) which makes it clear that the Competition Act, 2002 has no restrictions to adjudicate the matters falling within the ambit of such agreement. Furthermore, Sec. 3(5)(i)(b) expressly states that such agreements which are related to Patents can be entertained by this Hon’ble Commission.
Furthermore, it was held in the case of Bharati Airtel, that only CCI is empowered to deal with the anti-competitive acts under Competition Act 2002, and that CCI has the jurisdiction across transcends sectoral boundaries, thereby covering all the industries with a focus on the object and purpose behind the Act.
We can rely on a landmark case to say, that the Informant has every right to raise issues before the Commission. Section 62 of the Act makes it clear that provisions of Competition Act are in addition to and not in derogation of other existing laws. Also, a suit pending before a civil court for infringement of the powers granted by the patent cannot restrict the jurisdiction from making out a prima facie case contravention of Section 3 or 4. The intellectual property laws do not have an overriding effect of Competition law due to the fact that the non-obstante clause provided under Section 3(5) is not absolute and thus, the right holder is exempted from the rigours of Competition law in order to protect the infringement of his rights, and for doing so, he has the power to impose reasonable conditions.
Having said that, the Commission notes that it recognizes the role and importance of sectoral regulators and exercises its jurisdiction keeping in mind the role of sectoral regulators. Therefore, the allegation of the opposite party of encroachment by the Commission on the powers of the Copyright Board is completely without merit. The Commission is a market regulator and has the jurisdiction to look at all issues affecting competition in the market.
The Interpretation Dilemma
It can argued that the Competition Commission of India lacks jurisdiction to entertain matters related to Patents Act. This is due the fact that the Patents Act, 1970 is a special Act which contains comprehensive provisions relating to grant of patents rights as well as remedying any abuse thereof, and, the Competition Act, 2002 is a general Law enacted with a view to ensure freedom of trade and to promote and sustain competition in the market.
If we refer to the interpretation of statutes, we notice that the legal maxim “Lex specialis derogat legi generali” is perfectly to be suited in the present scenario. The maxim states that a law governing specific subject matter will override a law governing general subject matter. Thus, if we go in the direction provided by this maxim then the Patents Act, 1970 will prevail over Competition Act, 2002 and thus the matter related to patents should be brought in front of the Indian Patent Office, as well as Intellectual Property Appellate Board (IPAB).
The Patents Act, 1970 is a regulator which regulates the Patent Industry in Lalaland. The necessity of such regulators has been emphasized by a Constitution Bench of this Court in Modern Dental College and Research Centre and Ors. v State of Madhya Pradesh and Ors., stating that the intervention by regulatory bodies is neceessary for the welfare of the society and to promote the basic well being for individuals in need. It does not rob the character of the market economy.
In support of the submission that a special legislation i.e. the LPA, will prevail over the provisions of the LCA, reliance should be placed on the decisions of this Court in State of Punjab v. Labour Court, Jullundur and Ors., In the said matter, the Court was inter alia seized of the issue whether the employee-Respondents were at liberty to seek the payment of gratuity by invoking the remedy available under Section 33-C(2) of the Industrial Disputes Act, 1947 as opposed to the Payment of Gratuity Act, 1972. In deciding the said dispute, it was held that a legilsation containing special provisions covering all the essential features of a scheme will prevail over the laws and the regulatory bodies which are not mentioned therein.
Thus it can be easily observed that if we go according to the Interpretation of the aforementioned legal maxim and the cases cited it can be concluded that the LPA being a special Act will prevail over a general Act.
The Competition law in India has been through many changes and evolution, which is one of the main reasons that it has become more effective today as compared to the time when it was enforced. But there are some lacunas which need to be rectified in order to avoid hassle for the courts to adjudicate the matters and improve the effectiveness of the competition law regime. One such scope of improvement can be seen on the subject of jursidiction of CCI over patent matters, which has to be interpreted in such a way that that no contradiction arise in the future.
ABOUT THE AUTHOR
Rishabh Shukla is a 4th Year Law Student of New Law College, Bharati Vidyapeeth to be Deemed University. He is also the co-owner of LegumVox and LexGaze. He areas of interest include Insolvency & Bankruptcy, IPR, Arbitration, and Competition.
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