[Exercise of patent rights] Patents Act prevails over Competitors Act; CCI can’t probe: Delhi Excessive Court docket

The Delhi Excessive Court docket has held that the Patents Act of 1970 prevails over the Competitors Act on Competitors Act of 2002 on the subject of the problem of train of rights by a patentee underneath the Patents Act.

A Division Bench of Justices Najmi Waziri and Vikas Mahajan mentioned that the Competitors Fee of India (CCI), established underneath the Competitors Act doesn’t have the jurisdiction to inquire into the enterprise of licensing of a patent by a patent holder or whether or not an organization, within the train of its patent rights, has abused its dominant place.

“In reconciling the 2 statutes [Patents Act and Competition Act], the subject material that’s in focus isn’t merely anti-competitive agreements and abuse of dominant place, which each the Patents Act (in Chapter XVI) and the Competitors Act (in Sections 3 and 4) cope with. The subject material that’s related for this evaluation is anti-competitive agreements and abuse of dominant place by a patentee in train of their rights underneath the Patents Act. On this difficulty, there isn’t any scope of doubt past the pale of doubt that the Patents Act is the particular statute, and never the Competitors Act. Additionally it is a incontrovertible fact that Chapter XVI of the Patents Act is a subsequent laws as in comparison with the Competitors Act,” the Court docket mentioned.

The Court docket laid down the legislation whereas coping with a set of appeals and a writ petition filed by agrochemical big Monsanto, telecom firm Ericsson in addition to CCI.

Ericsson and Monsanto had most well-liked appeals in 2016 and 2020 respectively difficult the CCI’s antitrust investigations into the allegations that the 2 firms have been indulging in anti-competitive practices and never making their patents accessible moderately. They questioned CCI’s powers to conduct such an inquiry in any respect.

The one-judge had determined the case in opposition to Ericsson in 2016 holding that there isn’t any authorized bar in legislation to the CCI continuing underneath the Competitors Act for violation of Sections 3 or 4. The 2020 judgement of the single-judge in opposition to Monsanto relied on the 2016 judgement and got here to the same conclusion.

In its plea, the CCI challenged a 2015 judgment in writ petition by Ericsson the place the single-judge quashed the CCI proceedings primarily based on the settlement between the 2 events.

Monsanto and Ericsson argued that the Patents Act is a particular legislation dealing particularly with patents, and problems with imposition of situations for licensing patents are offered for underneath Chapter XVI of the Patents Act, which incorporates anti-competitive agreements and abuse of dominant place explicitly.

They contended that in view of Chapter XVI of the patents Act, there isn’t any motive for the Competitors Act, which offers with anti-competitive agreements and abuse of dominant place usually, to override the particular legislation.

Nevertheless, CCI mentioned that the Competitors Act is a particular legislation coping with anticompetitive agreements and abuse of dominant place, and thus some stray provisions within the Patents Act, which offers with patents usually, can’t be understood as overriding the Competitors Act, which is, in any occasion, a subsequent statute.

Its counsel cited the provisions of Part 3(5)(i)(b) and Part 4 of the Competitors Act and mentioned that these Sections make it abundantly clear that solely the CCI can contemplate whether or not a situation imposed in an settlement licensing a patent is unreasonable, i.e., similar to would trigger an considerable hostile impact on competitors inside India or an abuse of dominant place.

The Court docket disagreed with the arguments of CCI and mentioned that Chapter XVI of the Patents Act is an entire code on all points pertaining to unreasonable situations in agreements of licensing of patents, abuse of standing as a patentee, inquiry in respect of the identical and reduction that’s to be granted.

It underlined that the Competitors Act is a common laws pertaining to anti-competitive agreements and abuse of dominant place usually and the inclusion of Part 84(6)(iv) within the Patents Act by means of an modification after the Competitors Act was handed with Part 3(5)(i)(b) is especially instructive of the legislative intent.

“For deciding an software for obligatory licensing, the Controller [of patents] is empowered by the Patents Act to think about the reasonability of situations imposed in a license settlement. The CCI is empowered underneath the Competitors Act to look at anticompetitive agreements and abuse of dominant place. Nevertheless, the Competitors Act makes provision for affordable situations being imposed in an settlement regarding train of rights underneath the Patents Act. Since such affordable situations are exempted from examination underneath part 3(5)(i)(b) of the Competitors Act, it’s indicative of the legislature‘s intendment as to the unique area of the Patents Act concerning affordable situations.”

The Court docket, subsequently, put aside the judgments handed in opposition to Ericsson and Monsanto and quashed the CCI proceedings in opposition to them.

Senior Advocates CS Vaidyanathan, Neeraj Kishan Kaul and Sajan Poovayya together with advocates Saya Choudhary Kapur, Ashutosh Kumar, Vivek Ranjan Tiwary, Vinod Chauhan, Vrinda Bagaria, Palash Maheshwari, Radhika Pareva, Munesh Sharma, Anand S Pathak, Shashank Gautam, Sreemoyee Deb, Rajat Moudgil, Ravishekhar Nair, Sahil Khanna, Vinayak Goel, Sajan Shankar Prasad, Swarnil Dey, Shaurya Pandey, Raksh Agarwal and Abhishek Kakker appeared for Ericsson.

Monsanto was represented by means of Senior Advocates Dr Abhishek Manu Singhvi, CM Lall and Raj Shekhar Rao together with advocates Adarsh Ramanujan, Bitika Sharma, Aman Sethi, Lakshay Kaushik, Luv Virmani, HS Sandhu, Mansi Sood, Skanda Shekhar and Areeb Amanullah.

Extra Solicitors Normal N Venkatraman and Balbir Singh with advocates Samar Bansal, Madhav Gupta, Vedant Kapur, Avinash Sharma, Monica Benjamin, Anu Sura, Akanksha Kapoor and Siddhant Choudhary appeared for CCI.

Advocates J Sai Deepak and Avinash Ok Sharma appeared for Intex.

Advocates Ruchir Mishra and Mukesh Kumar Tiwari represented the Union of India.