India’s competition and patent laws cannot neatly be separated

We need a nuanced approach to protect patent rights while preventing anti-competitive practices

- VIJAY L. KELKAR & PRADEEP S. MEHTA

When monopoly rights collide with market freedom, the law must choose balance over chaos.

Yet, arecent ruling of India’s Supreme Court could tip us the wrong way. Intellectual property rights (IPRs), by their very nature, grant a legal monopoly to innovators over their creations. However, this monopoly is not absolute; competition law playsa vital role in ensuring that these rights are not exploited to the detriment of markets or consumers. Thus, by holding that the Competition Commission of India (CCI) cannot exercise jurisdiction over patent-related matters—or, specifically, by refusing to overrule a high court order saying so—the apex court may have effectively opened the door to potential anti-competitive agreements and abusive practices by patent holders.

The Ericsson vs. CCI case arose when the competition watchdog investigated the company for abusing its dominance in the business of licensing Standard Essential Patents (SEPs) by charging unfairly high royalties on technologies suchas 4G, 5G and WiFi. Ericsson challenged the probe at the Delhi high court, contending that only the Patents ‘Act had jurisdiction over such disputes.

This was not the first time that fault lines between India’s competition law and IP law had surfaced. The Competition Act exempts IPRs, but with a condition: IPR restrictions must be both “reasonable” and necessary to protect this right. Courts have repeatedly acknowledged that the CCI can examine IPRlinked conduct under the competition law, as stated in Aamir Khan Productions Put Ltd vs. The Director-General.