The Delhi High Court recently ruled that the Patents Act of 1970 takes precedence over the Competition Act of 2002 regarding the exercise of rights by a patent holder under the Patents Act. In a case involving agrochemical company Monsanto, telecom company Ericsson, and the Competition Commission of India (CCI), the Court held that the CCI does not have jurisdiction to inquire into the licensing of patents or determine if a patent holder has abused its dominant position.
The Court stated that the focus of the statutes is not solely on anti-competitive agreements and abuse of dominant position, which are addressed by both the Patents Act (Chapter XVI) and the Competition Act (Sections 3 and 4). Rather, the relevant issue is the anti-competitive agreements and abuse of dominant position by a patent holder exercising its rights under the Patents Act. The Court emphasized that the Patents Act is the special statute in this regard, as Chapter XVI specifically deals with these matters and was enacted subsequent to the Competition Act.
The background of the case involved appeals and a writ petition filed by Monsanto, Ericsson, and the CCI. Both companies challenged the CCI's antitrust investigations into allegations of anti-competitive practices and failure to reasonably make patents available. They questioned the CCI's authority to conduct such inquiries.
Monsanto and Ericsson argued that the Patents Act, being a special law dedicated to patents, includes provisions on licensing conditions, anti-competitive agreements, and abuse of dominant position in Chapter XVI. They contended that the Competition Act, a general law on anti-competitive agreements and abuse of dominant position, should not override the specific provisions of the Patents Act.
On the other hand, the CCI argued that the Competition Act is a special law addressing anti-competitive agreements and abuse of dominant position, and thus some provisions in the Patents Act, which deals with patents in general, should not supersede the Competition Act, especially since it is a subsequent legislation.
The Court disagreed with the CCI's arguments and stated that Chapter XVI of the Patents Act provides a comprehensive framework for addressing unreasonable licensing conditions, abuse of patentee status, inquiries related to these matters, and the corresponding relief. It highlighted that the Competition Act is a general legislation concerning anti-competitive agreements and abuse of dominant position, while Section 84(6)(iv) of the Patents Act, added after the enactment of the Competition Act, signifies the legislative intent.
Based on these considerations, the Court set aside previous judgments against Ericsson and Monsanto and terminated the CCI proceedings against them.
Various legal representatives appeared in the case, including senior advocates CS Vaidyanathan, Neeraj Kishan Kaul, Sajan Poovayya, and Dr Abhishek Manu Singhvi, among others, representing Ericsson and Monsanto. Additional Solicitors General N Venkatraman and Balbir Singh appeared for the CCI, while advocates J Sai Deepak and Avinash K Sharma represented Intex. Advocates Ruchir Mishra and Mukesh Kumar Tiwari represented the Union of India.
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