Delhi High Court: Four appeals and a writ petition were filed seeking clarification on a common question of a far-reaching implications when a patent is issued in India, and the patentee asserts such rights, can the Competition Commission of India (CCI) inquire into the actions of such patentee in the exercise of its powers under the Competition Act, 2002 (Competition Act). A Division Bench of Najmi Waziri and Vikas Mahajan, JJ., quashed the proceedings initiated by the Competition Commission of India for want of power. The Court further held that the Patents Act is a special law, and it must prevail over the Competition Act which is a general law.
Counsel for patentees submitted that the Patents Act is a special law dealing specifically with patents, and issues of imposition of conditions for licensing patents are provided for under Chapter XVI of the Patents Act, which includes anti-competitive agreements and abuse of dominant position explicitly. Thus, there is no reason for the Competition Act, which deals with anti-competitive agreements and abuse of dominant position generally, to override the special law.
Counsel for CCI submitted that the Competition Act is a special law dealing with anti-competitive agreements and abuse of dominant position, and thus some stray provisions in the Patents Act, which deals otherwise with patents generally, cannot be understood as overriding the Competition Act, which is, in any event, a subsequent statute.
The Court noted that the legislative intent is apparent that the Patents Act is especially for the field pertaining to patents, unreasonable conditions in agreements of licensing, abuse of status as a patentee, inquiry in respect thereof and relief that is to be granted therefore are all to be governed by the Patents Act. However, the Competition Act is a general legislation pertaining to anti-competitive agreements and abuse of dominant position generally. The inclusion of Section 84(6)(iv) in the Patents Act by way of an amendment after the Competition Act was passed with Section 3(5)(i)(b) is particularly instructive of the above legislative intent as regards anti-competitive agreements.
The Court further noted that in reconciling the two statutes, the subject matter that is in focus is not merely anti-competitive agreements and abuse of dominant position, which both the Patents Act (in Chapter XVI) and the Competition Act (in Sections 3 and 4) deal with. The subject matter that is relevant for this assessment is anti-competitive agreements and abuse of dominant position by a patentee in exercise of their rights under the Patents Act. Thus, the Patents Act is the special statute, and not the Competition Act.
The Court further observed that when asessed, by the maxim generalia specialibus non derogant or by the maxim lex posterior derogat priori, the Patents Act must prevail over the Competition Act on the issue of exercise of rights by a patentee under the Patents Act.
Thus, the Court quashed the proceedings initiated by the CCI and allowed the appeals and petition impugning the CCI order making it clear that it must not be understood as expressing any opinion on the merits of the claims of any of the parties as to whether Ericsson or Monsanto have, in fact, imposed anticompetitive conditions, or abused their dominant position.
[Telefonaktiebolaget LM Ericson v. Competition Commission of India, 2023 SCC OnLine Del 4078, decided on 13-07-2023]
Advocates who appeared in this case :
Mr. C.S. Vaidyanathan, Sr. Advocate with Ms. Saya Choudhary Kapur, Mr. Ashutosh Kumar, Mr. Vivek Ranjan Tiwary, Mr. Vinod Chauhan, Ms. Vrinda Bagaria, Mr. Palash Maheshwari, Mr. Radhika Pareva, Mr. Munesh Sharma, Mr. Anand S. Pathak, Mr. Shashank Gautam, Ms. Sreemoyee Deb, Mr. Rajat Moudgil, Mr. Ravishekhar Nair, Mr. Sahil Khanna and Mr. Vinayak Goel, Advocates for the Appellant;
Mr Balbir Singh, ASG with Mr Avinash Sharma, Ms Monica Benjamin, Ms. Anu Sura, Ms. Akanksha Kapoor and Mr. Siddhant Choudhary, Advs. for the CCI;
Mr. J. Sai Deepak and Mr. Avinash K. Sharma, Advocate for the R-2 (INTEX).