INTELLECTUAL PROPERTY RIGHTS AND THE INDIAN COMPETITION LAW

A SYNOPSIS

Amity Law School, Amity University, Uttar Pradesh

INTRODUCTION
Intellectual Property Rights An intellectual property right (IPR) is, according to Blacks Law Dictionary, an intangible right protecting commercially valuable products of the human intellect; it may comprise patents, copyrights, trademarks and other similar rights (industrial designs and trade secrets). An IPR includes the right to exclude others from exploiting the noncorporeal asset. Intellectual Property Rights (IPRs), very broadly, are legal rights granted to creators and owners of works that are results of human intellectual creativity. These can be in the industrial, scientific, literary and artistic domains. They give their owners the right to exclude others from access to or the use of protected subject matter for a limited period of time. This also gives them the subsequent right to license others to exploit the innovation when they themselves are unable to engage in large-scale commercial exploitation or for other reasons. Competition Law Competition law prevents artificial entry barriers and aims to remove monopolization of the production processes by encouraging entrance into industries by new players. The objectives of competition policy include the maximization of consumer and producer welfare, as well as maximizing efficiency in production. Well designed and effective competition laws promote the creation of an enabling business environment, which improves static and dynamic efficiencies and leads to efficient resource allocation and in which the abuse of market power is prevented mainly through competition.

IPRs AND THE INDIAN COMPETITION LAW: AT CROSSROADS

The Indian Competition Act, 2002, under Section 3 prohibits anti-competitive agreements, sub-section (5) thereof says that this prohibition shall 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 enjoyed under the statutes relating to the above mentioned IPRs.1 Therefore unreasonable conditions imposed by an IPR holder while licensing his IPR would be prohibited under the Competition Act. This provision is quite very similar to the laws in other countries. Hence, the Competition Act does not impose any kind of restrictions on use and enforcement of IPRs through agreements containing reasonable conditions, but Sections 4 to 6 build in safeguards against abuse of dominance and errant combinations. Section 19 provides for inquiry into Anti-competitive Agreements and Section 27 lists the nature of Orders which the commission may be competent to pass after inquiry into agreements or abuse of dominant position. The abuse of dominance due to an IPR is liable for action under the Act just as IPR-related dealings in combinations leading to an anti-competitive effect. Licensing constitutes an important part of the IPRs regime, or to be more specific, industrial property rights. Vertical agreements can lead to anti-competitive effects when they are imposed on downstream firms by companies holding a strong and unrivalled market position. Vertical price fixing (resale price maintenance) is banned per se in most jurisdictions including under IPRs licensing agreements.

a) The Copyright Act, 1957. b) The Patent Act, 1970. c) The Trademarks Act, 1999. d) The Geographical Indication of Goods (Registration & Protection) Act, 1999. e) The Designs Act, 2000. f) The Semi-Conductor Integrated Circuits Layout Design Act, 2000.