Patents Act Prevails Over Competition Act? Supreme Court Issues Notice On CCI's Petition

The bench led by CJI DY Chandrachud comprising Justices JB Pardiwala and Manoj Misra considered the matter.

The Delhi High Court in July 2023 gave its verdict while dealing with a bunch of appeals moved by multinational entities Ericsson and Monsanto challenging the proceedings initiated against them by CCI. An appeal was also moved by CCI.

The appeals raised a common question “When a patent is issued in India and the patentee asserts such rights, can CCI inquire into the actions of such patentee in the exercise of its powers under the Competition Act?”

While allowing the appeals, the High Court bench said: “The legislative intent is apparent in that the Patents Act—especially as amended by the 2003 Amendment that introduced Chapter XVI after the Competition Act was enacted. It 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 therefor are all to be governed by the Patents Act.”

Additional Solicitor General of India N Venkataraman appearing for the Competition Commission of India (CCI) highlighted that there were two crucial points of consideration before this Court - 1. The existence of a right emanating of a Patent and 2. the execution of a Right resulting in an abuse of a dominant position.

Referring to the above points, he further explained, “These are the two words used by the Raghavan Committee on IPR while drafting the Competition Law. They are two distinct legal concepts. In patent law, you can trace the existence of a right. The execution of a right resulting in abusive of the public domain and it is a subject in rem.”

He urged that by virtue of the High Court Order, the CCI has been ousted of its jurisdiction.

Senior Advocate AM Singhvi appearing for the multinational entities submitted - 1. The complaint which was initiated against the respondents (which led to the CCI probe) was withdrawn prior to the High Court Decision; 2. The patent in question has expired, which means it is res Publicis juris; 3. No season order can be given since the patent is over and no damages can be claimed. He suggested that the present matter be disposed of as infructuous.

“It's a genuinely dead matter”

The bench acknowledging being seized of the matter, observed, “ Alright we will issue notice”. The matter is now listed after 4 weeks.

Background

The Delhi High Court has ruled that the Patents Act, 1970 must prevail over the Competition Act, 2002 on the issue of exercise of rights by a patentee.

“Therefore, when assessed, 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,” a division bench of Justice Najmi Waziri and Justice Vikas Mahajan observed.

The court added that Chapter XVI of the Patents Act is a complete code in itself on all issues pertaining to unreasonable conditions in agreements of licensing of patents, abuse of status as a patentee, inquiry and relief that is to be granted.

“On this issue, there is no scope of doubt beyond the pale of doubt that the Patents Act is the special statute, and not the Competition Act. It is also a fact that Chapter XVI of the Patents Act is a subsequent legislation as compared to the Competition Act,” it said.

Competition Commission of India v. Monsanto Holdings Pvt Ltd | Petition(s) for Special Leave to Appeal (C) No.25026/2023

Click here to read the order