Ipr CL PDF
Ipr CL PDF
Ipr CL PDF
In the partial fulfilment for the requirement for the award of the degree of
B.A.LL. B
(YEAR 2019 – 2024)
SUBMITTED TO:
SUBMITTED BY:
Shivi khare
20191BAL0072
ACKNOWLEDGEMENT
I would like to express my sincere gratitude to my mentor Prof. Gargee Singh for guiding me
in making this project and for providing me with knowledge during our research. It has been a
privilege to be her student and this project would not have been practically possible without
her indispensable support. I cherish the motivation that she has brought in us to work harder
and think more vividly. Special mention of her patience with which she gave enough time to
me every time I approached her for guidance. It has been an enlightening experience under her
guidance and I take immense proud in being called her student.
With regards
Shivi Khare
TABLE OF CONTENTS:
Abstract
Introduction
Review of literature
Objectives of the study
Research questions
Research methodology
Scope and limitations of the study
Chapter: Relation between competition law and intellectual property rights
Conclusion.
ABSTRACT:
In this day and age, intellectual property rights (IPR) play a crucial role in ensuring that
intangible properties like creative works, trademarks, and inventions are not exploited by
unauthorized parties while also facilitating trade and the economy of every nation. Ideas and
innovations are especially vulnerable to exploitation in our digitalized world. Systems for
intellectual property control the duplication and theft of such ideas and innovations. Besides,
protected innovation likewise influences the business development of a business. First and
foremost, protecting intellectual property (IP)—such as trademarks, inventions, and trade
secrets—may enhance a brand's distinctiveness and individuality. As a result, a company can
use these intellectual property rights to obtain franchise agreements from other businesses. A
company's eventual commercial expansion may be aided by signing franchise agreements.
Second, systems based on intellectual property can be used to make money. For instance, the
process of patenting new ideas may result in providing creators with incentives that generate a
steady income stream. This income can also be put toward more research and development,
expanding the possibilities for innovation.
Competition law, on the other hand, regulates anti-competitive practices that businesses may
engage in by establishing rules and laws pertaining to market competition. Predatory pricing,
price fixing, and bid rigging are examples of anti-competitive practices. Predatory pricing is
the practice of putting exorbitant prices on goods or services so that consumers have few other
options but to buy them. Price fixing is the practice of conspiring with other businesses to set
similar prices for goods or services. In 50 B.C., the Roman Empire enacted competition laws
to protect the grain industry and prevent supply ship blockages. This is where competition law
got its start.
As a result, the purpose of this study is to examine the connections and interdependencies
between IPR and competition law. This study also focuses on providing guidelines that will
assist in improving the efficiency of the Indian system of competition law and patent offices in
order to develop economic efficiency in the country.
INTRODUCTION:
Markets typically operate under a variety of mechanisms or systems. This paper focuses on
two mechanisms—free market operation and regulated market operation—for simplicity's
sake. The prices of goods are set freely by agreement between buyers and sellers in a country
with a free market, without the intervention of the government or other regulatory measures.
As implied by its name, a regulated market economy is governed by a variety of regulatory
agencies. One of the most important parts of the regulatory mechanism that tries to strike a
balance between the free play of monopoly rights and the interests of society is legislation.
One of the topics that has received the most attention in recent years is the connection that
exists between Competition Law and Intellectual Property Rights (IPR). Anti-competitive
agreements, abuse of a dominant position, mergers and combinations, and efficient resource
allocation all fall under the purview of competition law, which has been hailed as the most
effective means of combating anti-competitive agreements and providing consumers with more
options and more value for their money. The concept of intellectual property rights stands as
evidence that strikes a balance between the social interest and the exclusive right of the owner.
It ensures that the owner of the intangible property acquires the monopoly rights necessary to
commercially exploit his intellectual creation. IPR is a set of rights that give the owner the right
to prevent others from using the product for a specific amount of time.
From the preceding, it can be deduced that IPR and Competition Law will undoubtedly clash.
IPR aims to grant monopoly power, which Competition Policy disagrees with because, on the
one hand, innovation must be encouraged and market competitiveness must be maintained. As
a result, the two laws do not conflict; rather, in some instances, they work in conjunction with
one another. One of the goals of the competition policy is for IPR to provide economic agents
with incentives for technological innovation, which will result in the dynamic growth of
products and the creation of more products.
REVIEW OF LITERATURE:
An article written by Ms. Anusha Gudagur named “the relation between competition law
and intellectual property rights (ipr)” published by the website named Indian law protocol,
explains how the competition law and the ipr intersects with each other and what are the
factors that keep them linked with each other.
An article titled “interplay between competition law and ipr in its regulation of the
market” written by Mr. Shubhodip Chakraborty, published by the website named lawctopus,
talks about how the partnership between ipr and competition law helps in regulating the
market and the benefits that it provides to the consumers.
• To understand whether IPR and competition law harmonize with each other or not.
• To analyse how does IPR effect the competition present in the market.
• To examine the conflict between ipr and competition law.
RESEARCH QUESTIONS:
• How does the existence of IPR with competition law effect the market?
• What is the perspective of the Indian law regarding the relation of IPR and
competition law?
RESEARCH METHODOLOGY:
This study is limited to the understanding of what is competition law, what is ipr, how do
their existence effect each other and the market in whole.
CHAPTER:
It is now abundantly clear that the relationship between intellectual property rights (IPR) and
competition law is a contentious issue. Since competition law deals with preventing anti-
competitive agreements, regulating mergers and acquisitions, limiting the use of dominant
positions, and other similar issues, Intellectual Property Rights, on the other hand, attempt to
strike a balance between the rights of the owner and the needs of society. It makes it easier for
the owner of intangible property to secure exclusive rights and monetary compensation for his
creative work. IPR and competition law share a tassel, as the preceding demonstrates. because
exclusive rights and monopolies conferred by intellectual property rights violate the
competition policy. Boosting the spirit of the inventor is essential, but organizing market
competitiveness is also necessary. However, there are some ways in which they work together.
One of the objectives of competition policy is the creation of more products and their dynamic
growth through technological innovation made possible by intellectual property rights (IPR).
Most people think that IPR and competition law have different goals. This is because, by
restricting horizontal and vertical limits or on monopoly abuse, intellectual property rights
(IPRs) appear to be in conflict with static market access and level playing fields in competition
rules. This is because IPRs establish limits within which competitors may exercise exclusive
legal rights (monopolies) over their invention.
One of the topics that has received the most attention in recent years is the connection that
exists between Competition Law and Intellectual Property Rights (IPR). Anti-competitive
agreements, abuse of a dominant position, mergers and combinations, and efficient resource
allocation all fall under the purview of competition law, which has been hailed as the most
effective means of combating anti-competitive agreements and providing consumers with more
options and more value for their money. The concept of intellectual property rights stands as
evidence that strikes a balance between the social interest and the exclusive right of the owner.
It ensures that the owner of the intangible property acquires the monopoly rights necessary to
commercially exploit his intellectual creation. IPR is a set of rights that give the owner the right
to prevent others from using the product for a specific amount of time.
From the preceding, it can be deduced that IPR and Competition Law will undoubtedly clash.
IPR aims to grant monopoly power, which Competition Policy disagrees with because, on the
one hand, innovation must be encouraged and market competitiveness must be maintained. As
a result, the two laws do not conflict; rather, in some instances, they work in conjunction with
one another. One of the goals of the competition policy is for IPR to provide economic agents
with incentives for technological innovation, which will result in the dynamic growth of
products and the creation of more products.
Before we get into more details of the topic, we must understand the concept of ipr and
competition law individually.
The term "intellectual property rights" refers to a collection of legal rights granted to the owner
of intangible property in order to obtain the exclusive legal rights (monopoly) to utilize his
intellectual creations for commercial purposes. Industrial property and copyrights are the two
subcategories of intellectual property rights (IPR). Patents, trademarks, industrial designs, and
source-geographic indications are all examples of industrial property. And literary and artistic
works like plays, novels, poems, and films, musical works, and artistic works like drawings,
paintings, photographs, sculptures, and architectural designs are all protected by copyright.
New inventions emerged as a result of Europe's Industrial Revolution in the 19th century. The
era of scientific advancements is referred to as this. When it comes, The purpose of patenting
intangible properties was to safeguard creative concepts from commercial misappropriation.
Although the term "IPR" was first used in the 19th century, intellectual property did not become
commonplace in the majority of the world's legal systems until the 20th century.
The Paris Convention for the Protection of Industrial Property, which was held in Paris on
March 20, 1883, was the first multilateral effort. In 1886, in Berne, Switzerland, it was followed
by the Berne Convention for the Protection of Literary and Artist Works. The Magna Carta of
IPRs can be referred to as these two initial international efforts. With the establishment of
WIPO and TRIPs, the IPR jurisprudence has been firmly established at the international and
national levels. The IPR regime has travelled a long way since then.
The creation of a wide range of intellectual goods is the primary objective of intellectual
property law. Because it enables individuals to profit from the information and intellectual
goods they produce, this provides an economic incentive for their creation. In India, intellectual
property rights (IPR) were brought in from the West. The first Indian law on intellectual
property rights was the Indian Trade and Merchandise Marks Act of 1884. The primary Indian
Patent Regulation was established in 1856 followed by a progression of Acts being passed. The
Indian Copyright Act of 1914 and the Indian Patents and Designs Act of 1911 are both
examples. Indian Exchange and Product Imprints Act and Indian Copyright Act have been
supplanted by the Exchange and Product Imprints Act 1958 and Copyright Act 1957
individually.
One of the topics that has received the most attention in recent years is the connection that
exists between Competition Law and Intellectual Property Rights (IPR). Anti-competitive
agreements, abuse of a dominant position, mergers and combinations, and efficient resource
allocation all fall under the purview of competition law, which has been hailed as the most
effective means of combating anti-competitive agreements and providing consumers with more
options and more value for their money. The concept of intellectual property rights stands as
evidence that strikes a balance between the social interest and the exclusive right of the owner.
It ensures that the owner of the intangible property acquires the monopoly rights necessary to
commercially exploit his intellectual creation. IPR is a set of rights that give the owner the right
to prevent others from using the product for a specific amount of time.
From the preceding, it can be deduced that IPR and Competition Law will undoubtedly clash.
IPR aims to grant monopoly power, which Competition Policy disagrees with because, on the
one hand, innovation must be encouraged and market competitiveness must be maintained. As
a result, the two laws do not conflict; rather, in some instances, they work in conjunction with
one another. One of the goals of the competition policy is for IPR to provide economic agents
with incentives for technological innovation, which will result in the dynamic growth of
products and the creation of more products.
Competition law:
A piece of legislation passed by the legislature known as "competition law" aims to foster or
preserve market competition by enforcing rules against businesses' anti-competitive behavior.
In the United States, competition law is known as antitrust law, while in China, it is known as
antimonopoly law. By preventing a monopoly in the market, this law aims to promote market
competition and provide customers with the best products at the lowest possible prices. When
compared to monopolies, competition in the market results in lower prices, superior products,
a broader selection, and improved efficiency.
The instrument by which the government regulates and controls the market's producers and
players is competition law. Therefore, the issue of competition and competitiveness is
addressed by competition law to ensure that consumers have a choice of goods and services
and that prices are competitive. Additionally, rivalry regulation forestalls fake section
hindrances, works with market access, and praises other contest advancing exercises.
It is seen that IPR and Rivalry regulation are in opposition to one another. This is due to the
fact that intellectual property rights (IPR) give the creators of a new product exclusive legal
rights that prevent others from using their creations for commercial purposes. In contrast,
competition law prohibits static market access and, more specifically, monopoly position
abuse. As a result, it should be noted that IPR and Competition Law use different definitions
of the term "competition."
The primary goal of granting licenses for intellectual property rights (IPR) is to foster
competition among potential innovators while simultaneously limiting it in a variety of ways.
After a predetermined time period, the rights become part of the public domain, ending the
competition. The primary objectives of competition law are to ensure that customers receive
high-quality goods and services at reasonable prices, to promote and encourage competition in
the market, and to put an end to abusive practices.
The main goal of intellectual property rights (IPR) is to provide the necessary incentives to
encourage innovation, as stated in a UNCTAD document titled "examining the interface
between the objectives of competition policy and intellectual property". This goal is
accomplished by providing inventors with exclusive rights to their inventions, which enable
them to recuperate research and development expenditures for a predetermined amount of time.
The aim of intellectual property law is to strike a balance between the owner's exclusive right
and the public good. Intellectual Property Rights are a collection of legal rights granted to
stakeholders of intellectual property to commercially exploit those rights. These rights are
obtained through statutory recognition rather than delegation. The State only grants rights for
a predetermined amount of time to prevent, first, a permanent monopoly and, second, a
harmonious balance between the competing interests of stakeholders and the general public.
Some jurists came to the conclusion that the IPR cannot be classified as a monopoly in the
strictest sense because of the curtailed monopoly. However, it cannot be denied that a reduced
monopoly's goal is to encourage new product innovations. In addition, the goal of granting
intellectual property rights is to compensate the creator or innovator in a way that can be made
profitable.
The similarities and differences between the concepts of "competition" in competition law and
intellectual property rights.
The signification of 'rivalry' in the IPR and Contest Regulation are logically unique. The
primary goals of granting intellectual property rights (IPR) are to encourage fierce competition
among intending innovators while simultaneously restricting competition in a number of ways.
After a certain amount of time has passed, the rights become part of the public domain,
completing the work. The goal of competition law is to make sure consumers get the right
products at a fair price and of better quality, to encourage and maintain market competition,
and to stop abusive practices. It is said that the presence of horizontal agreements, or
agreements between businesses that trade similar or identical goods, has a significant negative
impact on competition.
An agreement is said to have a significant negative impact on competition if it has the effect of
restricting or controlling a product or service at any stage and causes bid rigging or collusion.
Hostile to believe regulation likewise forbids vertical arrangements which could bring about
meaningfully affecting rivalry. Agreements between businesses at various levels of production,
distribution, etc. are known as vertical agreements. Additionally, an enterprise cannot abuse its
dominant position under the Competition Law.
Any business can acquire monopoly power and gain dominance over a specific market
segment. While this does not directly violate antitrust law, abuse of this position is illegal and
hurts the market. The law also regulates mergers and acquisitions. A company tends to become
dominant when the relevant market is narrowly defined, and it ceases to be so when the market
is broadly defined. Contest Regulation likewise manages restraining infrastructures and their
place of strength. Agreements between businesses, abuse of a dominant position, and mergers
or combinations of businesses are the three main topics of competition law. Basically, stopping
unfair competition.
According to Article 10(b)(2) of the Paris Convention, "any act of competition contrary to the
honest practices in industrial and competition matters" constitutes unfair competition.
The free play of market sources alone has little chance of achieving fair competition. As a
result, there must be some regulation to stop such unfair competition. Unfair competition,
creating confusion, misleading, discrediting competitors, disclosing confidential information,
free riding, and comparative advertising are all recognized by the Paris Convention. It should
be noted that this list of unfair competition does not include all cases; it continues to grow as
new ones are handled in various nations.
As a result, we can say that intellectual property rights (IPR) are about individual rights that
grant monopoly only to the inventor in order to safeguard his invention from commercial
exploitation. On the other hand, commercial law protects the interests of the market and the
broader community rather than an individual by limiting private rights that may harm the
community's well-being and thus encourages market competition. Even though they are in
complete opposition to one another, consumer welfare is ultimately their primary objective.
Although the relationship between competition law and intellectual property rights may
initially appear to be antagonistic, it actually encourages investments in dynamic competition
by limiting static competition. IP rights grant their holders the right to commercially exploit
his product within a predetermined time frame, giving them an advantage over others. The IP
right holder will always have the monopoly power and position of dominance during this time,
which is obvious. Despite the fact that monopolistic behaviour should never be prohibited
under competition law, abuse of such position will constitute a violation of anti-trust law.
As a result of encounters in various cases over the years, changes in the law have resulted in
these two laws functioning in a complementary manner rather than in opposition to one another.
It is essential to observe the laws of other nations and how they have framed their legislation
in order to counter these issues in order to comprehend the difficulties in applying competition
law and intellectual property rights.
Intellectual property rights and competition law appear to contradict one another, but they are
not; rather, it prevents the rigid competition from preventing the individual from investing in a
dynamic competition. It grants the owner exclusive use of his or her product for a
predetermined amount of time. Patent holders have monopoly power and are in a position to
dominate at this time. Antitrust law will not be broken by such dominance.
The additional, but not contradictory, function of both laws emerges as new cases are filed over
time. It is necessary to examine Indian competition laws and the ways in which they have been
structured to eliminate such issues in order to comprehend the issue that arises when an IPR
and competition law are applied.
Indian perspective:
One of the most challenging issues in competition law is the application of IPR law to
competition issues. When certain intellectual property rights (IPRs) have been obtained
fraudulently or improperly, such as when patents have been obtained by deceiving the patent
office, competition law may be applied.
First and foremost, there are two divergent viewpoints regarding the relationship between
competition law and intellectual property law. Competition is the primary source of conflict
between these two subjects. Competition Law is generally regarded as the one that promotes
competition and eliminates monopoly in the market. In contrast, Intellectual Property Rights
(IPR) promote monopoly by rewarding innovators who introduce new products to the market.
However, proponents of this interface theory hold a different viewpoint, stating that properly
assigning and defending property rights on assets with economic value is the primary function
of IP law. On the other hand, minimizing the negative effects of monopoly power caused by
IPRs ought to be the primary objective of competition law.
In addition, the second point of view asserts that competition law continues to foster
competition in the market and the community as a whole, resulting in numerous innovations
and economic expansion. In a similar vein, the IP Law also encourages innovations by
providing them with exclusive rights to safeguard them against commercial exploitation. As a
result, it is evident that IPRs and competition laws complement one another in their efforts to
promote innovation, competition, and consumer welfare. Because competition ultimately
ensures the best outcome for customers, maintaining competition in innovation is crucial.
As was previously mentioned, consumer welfare and market participants' economic freedom
are two aspects of competition law's goal. According to Section 31(b) of the WTO Trade-
Related Aspects of IPR (TRIPS) Agreement, the government can take measures such as
obligatory licensing of such technologies when a patent holder engages in any form of anti-
competitive behaviour.
The different segments which talk about the unavoidable association among IPR and rivalry
regulation are:
Section 3(5) of the Indian Competition Act, 2002 excludes the fair use of such inventions from
the scope of the competition law, and thus this section itself does not constitute fairness
imposed by owners of intellectual property. It suggests protecting only the terms and all
unreasonable terms that may be imposed. competitively.
Section 4 of the Indian Competition Act 2002 deals with abuse of a dominant position and only
prohibits its abuse, not its very existence. What is noteworthy in the current discussion is,
perhaps, that intellectual property does not confer a dominant position, and even if it did, this
section does not prohibit mere existence. Therefore, no intellectual property exceptions have
been made in this section. Dominant position, but only their misuse.
Section 4 (2) of the Indian Competition Act 2002 treats conduct by a company as abuse and
applies equally to intellectual property rights holders.
Section (3) of the Indian Competition Act, 2002 prohibits anti-competitive practices, but this
prohibition does not restrict “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 conferred under IPR laws. Prohibitions are in the Copyright Act 1956, the Patents Act
1970, the Geographical Indications of Goods (Registration and Protection) Act 1999 (48 of
1999), the Designs Act 2000, and the Semiconductor Integrated Circuit Layout Designs Act
2000.
Even though the IPR and Competition Law have taken distinct approaches to achieving the
same goal of consumer and social welfare, their distinct goals and approaches will always
conflict. As was mentioned earlier, IPR and Competition Law can coexist and complement one
another. However, the middle path that always leads to conflicts between the two can only be
reduced by separating their operations from one another. A conflict that must be resolved by
placing one over the other will result from allowing interference into each other's domains. If
their operations are kept separate from one another, a decision about policy like this can largely
be avoided.
While competition law would only need to address the manner in which these rights are
exercised, IP law must address the grant and operation of property rights. It is necessary to
maintain the distinction between individual case decisions and policy decisions. For both areas
to be able to effectively accomplish their objectives and, in the long run, complement and
supplement one another, this separation is necessary.
Judicial precedents:
Numerous cases involving IPR and competition law disputes have been received by the EU
and US in recent years. However, the number of cases involving IPR and Competition Law
disputes is extremely low in India; In point of fact, it is still in its infancy. However, for the
first time, the court dealt with issues related to IP law and competition law in Aamir Khan
Productions vs. the Director-General.
The contention between the IPRs as a rule preceded the Monopolistic and Prohibitive Exchange
Practices Commission (MRTP Commission) which is the ancestor of the Opposition
Commission. However, the Competition Commission of India (CCI), which enforces the
Competition Act, 2002 throughout India, now handles cases pertaining to the applicability of
competition issues to IPR and Competition Law. In May 2009, this Commission went into full
operation after being established on October 14, 2003. The CCI includes a director and 6
individuals.
The conflict between IPR and Competition Law has only been the subject of a few cases in
India. The following are a few examples of situations in which the interface between these two
fields has been observed:
1. Aamir Khan Creations Pvt. Ltd. v. the Director-General, Bombay High Court ruled that the
Competition Commission of India (CCI) is competent to hear all IPR and competition law-
related cases.1
2. For Kingfisher's situation, the Opposition Commission of India (CCI) likewise held that
Protected innovation related right is definitely not a sovereign yet legal right conceded under
regulation.2
1
Aamir khan productions Pvt Ltd V. Union of India, 112 Bom LR 3778 (2010)
2
Kingfisher V. CCI, writ petiton 1785 Del. HC (2009)
3. Indian Entertainment Network Pvt. Ltd. v. Super Cassette Industries Ltd. The Supreme Court
reaffirmed its position on the conflict between IPR and Competition Law in this case. 3Even
though the owner of the copyright has a complete monopoly, the Court noted that this
monopoly can be limited if it disrupts the smooth operation of the market, which would be in
violation of the Competition Law. The same was true for the refusal of a license. Intellectual
property owners can, without a doubt, receive royalties for their innovations by issuing
licenses, but this is not always the case.
4. Microsoft Case in the United States4- "It is a topic of debate in economic and legal circles
for a long time: how to wed the competition bride and the innovation groom" This is one of the
most significant cases regarding competition and IPR policy under the TRIPS regime.
Microsoft was accused of abusing its monopoly power in 1998 by tying its operating system
and web browser to sales, according to the case. Since Windows operating system users already
had a copy of Internet Explorer—the browser Windows tied with its browser—this limited the
market for other web browser competitors. Since there is a distinct version for each of the
operating systems, the opposition claimed that Internet Explorer was an entirely different and
distinct entity.
Microsoft was found guilty of monopolization and tying in violation of sections 1 and 2 of the
Sherman Anti-Trust Act, and it was determined that Microsoft had altered its dominant position
in order to crush other operating systems.
After Microsoft successfully appealed this decision, it was determined that Microsoft would
need to be divided into two distinct parts—one for the browser and one for the operating
system.
CONCLUSION:
Despite the fact that IPR and Competition Law have traditionally been antagonistic, they
never intend to replace one another; rather, they serve to complement one another. Both of
these have the goal of encouraging innovation competition. This is because new products for
the benefit of consumers will be created as a result of market innovation, which will
eventually lead to the country's economic expansion. Both of these take distinct approaches
to achieving the same objective, which is consumer welfare that ultimately leads to the
3
Indian Entertainment Network Pvt. Ltd. v. Super Cassette Industries Ltd, 5 OK 719 (2008).
4
United states v. Microsoft corp., 34 F.3d 253 (2001)
economic well-being of the nation. Because of the apparent overlap and sometimes conflict in
their scope, IPR and Competition Law cannot be considered separately. Therefore, it is
appropriate to achieve the ultimate goal of both IPR and Competition Law, which is
consumer welfare, by separating their functions and making their operations independent.
It is possible to come to the conclusion that intellectual property rights are a right, whereas
competition law is a body that regulates the production, supply, distribution, and storage of
goods, among other things, that an organization must carry out while operating the market.
IPR is a benefit that allows the creator of a product or a script to use it exclusively for a
predetermined amount of time. This is supported by labour theory, which asserts that an
individual is entitled to the rewards of all hard and laborious work.
Apparently these two regulations are disconnected in nature, however they are not, as we can
see from the previous review. Both laws help each other out, and one comes into play when
the other one is used improperly. By maximizing profit with a high-quality product at an
affordable price, competition law aims to provide customers with a wide range of options and
strikes a balance between the manufacturer's and customers' rights. In addition, IPR permits
the manufacturer to be compensated solely for the product's creation, which is advantageous
to the general public. While the IPR's monopoly position does not appear to violate
competition policies, but the positional misuse may be happening.