Jurisdiction Of Competition Commission Not Excluded Merely Because Actionable Info Relates To A Patent: Delhi High Court

The Delhi High Court has held that the jurisdiction of Competition Commission of India is not ousted merely because the information on which it seeks to initiate an enquiry relates to a patent.

A single bench of Justice Yashwant Varma held that so long as the CCI is duly and statutorily empowered to deal with all information which it may receive with respect to actions that may (i) impede competition, (ii) usher in an anti-competitive environment, (iii) relate to abuse of dominant position or (iv) the adoption of unfair trade practices.

It observed,

"It is only when a complaint fails to raise the aforesaid issues and concerns itself solely or exclusively with violations of the Patent Act, 1970 or the infringement or enforcement of rights that may otherwise be conferred by that Act that it could be said that the information would fall outside the purview and power of enquiry of the Commission."

Briefly, the facts of the case are that CCI received information against the petitioner under Section 19 of the Competition Act, 2002. The informant had submitted a confidentiality request under Section 57 of the Act for the same. The complaint alleged discriminatory pricing by the petitioners regarding a drug being offered at a relatively lower price to public procurers and at a much higher price to individual consumers.

The petitioner submitted that the Commission required it to disclose information which would be commercially sensitive and would result in exposing the petitioner to criminal proceedings under Article 271 of the Swiss Criminal Code. The counsel for petitioner also submitted that the issues raised in the information related to the rights of a patent holder under the Patents Act, 1970. He stated that as per Section 3(5) of the Competition Act nothing contained in Section 3 (prohibiting anti-competitive agreements) would restrict the right of any person to prevent infringement or imposing of reasonable conditions that may be necessary for protecting his/her intellectual property rights, including rights conferred upon him under the Patents Act, 1970. He also submitted that Sections 85, 90, 102, 107 and other allied provisions of the Patents Act, 1970, created safeguards with respect to the rights which may be claimed by a patent holder. 

Per contra, the counsel for CCI submitted that the enquiry was sought in respect of price of a drug licensed by the petitioner and sold and distributed within the country which was likely to impact a large number of people. He also submitted that the apprehension of the petitioner with respect to the disclosure of commercially sensitive information was misplaced and contended that it was open to the petitioner to claim confidentiality with respect to any disclosure that it may make before the Commission in the course of the enquiry.

The Court stated that it was confident that the Commission would duly take into consideration the objections that raised by the petitioner, which include those relating to the assumption of jurisdiction by the Commission itself.

It further held that Section 3(5) of the Act does not exclude the jurisdiction of the Commission completely in cases involving patent, when the information may relate to issues pertaining to an anti-competitive environment, abuse of dominant position or the adoption of an unfair trade practice.

Reliance was placed on Monsanto Holdings Pvt. Ltd. and Ors. v. Competition Commission of India & Ors. where a single bench of the High Court had held that there is no conflict between the Patents Act and the Competition Act and that the jurisdiction of CCI to entertain complaints regarding abuse of dominance in respect to patent rights could not be excluded.

So far as petitioner's apprehension with respect to exposure of confidential and sensitive commercial information is concerned, the observed,

"It becomes imperative to observe that the initiation of an enquiry by the Commission based on information that may be received, is not liable to be either viewed or understood as the initiation of any coercive steps. In any case, entities whose operations transcend jurisdictions can neither assume nor claim immunity or exemption from laws or compliance with statutes which are promulgated and are not shown or established to fall foul of international or treaty obligations of nations."

Accordingly, the writ petition was disposed of with the observation that the Commission shall, while proceeding further, consider the objections of the petitioner and dispose of the same in accordance with law.

CASE TITLE: VIFOR INTERNATIONAL LTD. v. COMPETITION COMMISSION OF INDIA

Citation: 2022 LiveLaw (Del) 777

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