The Conflict Between Patent And Competition Laws in India

The key to progress is revolution, which is why regulations such as patent laws exist to encourage people to come up with new technology and inventions by giving a set of incentives! The exclusive right of economic exploitation of an invention is one of these incentives. However, there are several regulations that aim to prevent monopolies and increase market competition.

You may be questioning why, on the one hand, a law allows for exclusive rights to a new technology but, on the other hand, another legislation prohibits monopolies in order to promote fair competition; isn’t this conflicting?! How can one preserve his or her intelligence from being exploited by others while simultaneously avoiding being market dominant? So, we’ve answered all of your questions about this problem. This article will provide you with answers to all of these issues as well as a clear understanding of how to find the appropriate balance between the two enactments.

Competition and Patent Laws 

In a market, competition is an inevitable and essential situation in which businesses or sellers compete for the patronage of customers to attain a certain commercial goal. For example, the goal may be to increase earnings, sales, or market share. A competition legislation, on the other hand, may be seen of as a tool for implementing and enforcing competition policy, as well as preventing and prosecuting anti-competitive corporate behavior and unwarranted government intervention in the market. The most important goal behind the enactment of competition law and policies in various jurisdictions, and the one that an Intellectual Property owner should be concerned about, is to ensure fairness and equity in market place transactions, as well as to protect small and medium business opportunities.

Patent is an exclusive right granted to the patent owner for an invention that has some element of originality, is non-obvious or something new, and has an industrial applicability. To issue such patents, a country’s patent law is established, which acts as a balance, balancing the interests of patent owners on the one hand with the interests of the general public on the other. One of the primary goals of any jurisdiction’s patent legislation is to promote new technology, scientific study in under-explored areas, and economic advancement by protecting an inventor’s research and development investments.

Therefore, the question that should be asked is how these two laws are related to one another. Patent law and competition law are two arms of a single body that are strongly linked to market dynamics. Although both of these regulations are in contradiction with one another, their main goal is to safeguard the welfare of customers in the marketplace by supporting industry, innovation, and fair competition. For example, if you are a market competitor who has produced something original and distinctive, you will be given patent rights; nevertheless, this does not imply you may abuse your market dominance by putting unfair limitations on others. As a result, the two pieces of law are expected to collaborate closely.

As previously stated, patent law and competition law are conflicting, yet they are supposed to complement one another by addressing one other’s shortcomings. Both systems have serious weaknesses; the patent law, for example, has a huge risk to disadvantage consumers or competitive businesses in the market in certain circumstances. Assume you are the owner of a patent for a technology, such as a human robot. Now that you have tremendous market power, you want to use it to dominate the whole market by abusing your position. While dominating, you are inadvertently impacting other companies that are striving to develop superior technologies without infringing on your patent. As a result, you would have an indirect impact on the market’s free and fair competition policy.

Likewise, competition law has a tendency to limit an inventor’s rights if he or she has developed a certain number of resources during the study in order to come up with a new technology or invention. To summarize, both patent and competition legislation must be balanced in order to create a fair and stable market. Extremes of both regulations will almost certainly corrupt the market.

One could now wonder how to create a balance between the two laws. Indeed, over the years, jurists have attempted to balance both of these laws, so it is certainly feasible. The Competition Act of 2002 was implemented in India with the goal of complying to the TRIPS agreement while also addressing the problems caused by the previous MRTP Act. Section 3(5) of the Act, for example, exempts IPR licensing agreements from the provision of anti-competitive agreements. As a result, all IP owners will be able to circumvent the competition law’s restricting measures while still promoting innovation and scientific research. However, this exception for IP owners is not absolute; if the Competition Commission determines that a patent owner is abusing it’s own dominant market position by imposing unreasonable restrictions on the production or entry of other businesses, that act will be classified as anti-competitive practices under section 3 of the Competition Act of India. There have been a number of cases where the courts have identified a conflict between IPR, namely patents, and competition rules.

Conclusion

Although the economic link between competition, innovation, and patents is complex, the impact that competition can have on patent applications are determined by the market’s competitiveness. It has been discovered that the greater the competition, the higher the incentives for innovators, i.e. competitors who attempt to protect their idea through patent applications. The courts and jurists have determined that upholding the rights of Intellectual Property owners does not always imply market dominance abuse. It is a well-known truth that, while both rules contradict each other, they are also parallel to each other with the goal of providing a secure and competitive market for customers and market participants. Courts have been effective in striking a necessary balance between legislation and the inventive market.