1. INTELLECTUAL PROPERTY RIGHTS & IT’S HISTORY
Intellectual property rights are the rights that are related to human creativity. From the shape of a pen to a can of Coca-Cola, from the logo of Apple to Music produced by singers, everything is protected under IPR. The protection of human ideas not only contributes to technological and economic progress but also to cultural progress. Intellectual property rights are a means to protect rights relating to human intellect.[1] The main purpose of IPR is they empower the real owner to stop the misuse of illegal use of their product. This helps to protect the owner’s integrity and reduce exploitation. IPR has a very long history.
In ancient times, the Romans issued marks on pots to denote their owners. There was also a Venetian Law of 1474 that gave 10-year privileges to inventors of new machines. In the year 1623, IP Legislation was passed by Britain which encouraged guilds and associations of merchants to create innovations and introduce them to the market for trade. Another important IP Legislation was “The Statue of Anne” in 1710 which was passed by the British Parliament.[2] This legislation played a key role in strengthening copyrights which allowed the authors to recreate or distribute their work freely. However, due to globalization, in the late 19th Century there was a high demand for IPR again due to rapid development in technology and the growth of international trade.
A] TYPES OF IPR
IPR are generally divided into two categories: i) Copyrights & ii) Industrial property.[3]
i) Copyrights
Copyrights include all the original work of an artist in any field – sound recording, films, artistic works, dramas, cinematography, or musical works. It also includes computer programming which consists of a database. Copyrights give its owner the right to perform and the right to reproduce their work while the owner can also sue any person who illegally uses their work. The owner of a copyright has their work protected for a period of 70+ years of the age of the owner.
ii) Industrial Property
Industrial property includes all IPRs that are related to industries and inventions. It includes patents, Trademarks, Industrial designs, geographical indicators, etc. New inventions are a key to technological advancement. Therefore, the innovation behind the invention must be protected. On the other hand, industrial designs are aesthetic creations of an industrial product.
a) Patent
A patent confers an exclusive right to the owner to use or exploit his product after his application is granted by the patent office. A patent is protected for a period of 20 years from the date of its filing. During this period, no other person than the patentee (the owner of the patent) can have rights over the product, but the patentee can authorize any person to use it. Patent acts as a reward for innovations and helps in boosting creativity that encourage development. After the expiry of the term, the patent falls under the public domain and can be used without authorization.
b) Trademark
A trademark plays a vital role in distinguishing one brand from a group of brands. It acts as a sign of trust and promotes brand building. Trademark includes any sign, symbol, color, word, letter, heading, shape, packaging, or combination of thereof. E.g. The shape of a bottle of Coca-Cola is a trademark as it is unique. Trademarks are protected for a duration of 10 years and may be renewed afterward.
2. COMPETITION LAW AND ITS HISTORY
Competition Law can be traced back to the Roman Empire. Statutes like the Sherman Act of 1890 and Clayton Act of 1914 of American antitrust statutes paved the way for modern-day competition law. Competition law works for consumer welfare by maintaining fair quality of products, prohibiting unfair competition in the market, and helping to introduce new products in the market. Initially, Competition law did not have much recognition, but after World War II, the American competition law gained importance. In 1957, European countries incorporated provisions for competition law in the Treaty of Rome, provisions were made in Articles 81 & 82. Since then, different countries like Singapore, Russia, Japan, South Korea, etc. instituted their competition law. In India, the Competition law was passed by Parliament in the form of the Competition Act, 2002. Here is aimed at – i) preventing malpractices that can hurt the market, ii) promoting market competition, iii) protecting the interests of consumers & iv) looking after the freedom of other participants in the market. Globalization and Privatization played an important role in the interdependence & growth of countries, but it also increased the market competition. The economic efficiency of a country is enhanced by fair and healthy market competition. Another factor for which Competition Law was formulated was to protect consumers from abuse by dominant players in the market.
3. INTERFACE BETWEEN IPR & COMPETITION LAW
As mentioned in UNCTAD, the main objective of IP is encouraging innovation by providing incentives and granting rights for a particular period. While that of C.L. is to look after the market functions, correct market failures, and faster economic development. From this, it can be derived that the ultimate goal of both IPR & CL is consumer welfare and to intensify economic efficiency. IPR and CL need to have a balanced approach as the use of IPR under a few circumstances may give rise to competition-related problems. At first instance, IPR and CL may be different subjects with different objectives. [4]They have overlapping principles and they seem to be in conflict but, the ultimate goals remain the same.
1)IPR and Competition Act,2002
The IPR and Competition law can be seen in some sections of ICA, 2002. It is as follows
a) Prohibition of tying agreement
Prohibition of tying agreement was included in S3(4) of ICA,2002. Here tying agreements are the agreements where a buyer has to buy a useful or desirable product along with another product i.e. not useful. This provision not only promotes market competition but also boosts innovation which is the main feature of IPR.
b) Protection of IP Right holder
Section 3(5) of ICA 2002, ensures protection of rights of an IPR holder.[5] This provision states that IPR rights are not affected by competition law. But in S4 of ICA,2002 it is stated that the ICA also restrains IP holders from misusing their dominant positions, and if they do misuse it competition law will interfere. From this, we can conclude that IPR and CL complement each other. This can be seen in the case of Valle Peruman and others v/s Godfrey Philips India Ltd (2005).[6] In this case, a trademark owner manipulates his trademark, resulting in unfair trade practices. The SC stated that all kinds of IPs have the potential to infringe on competition. It also took into consideration the competition policy of India. The court also recognized that a trademark owner has to use his trademark reasonably. Similarly in the case of Aamir Khan Production Pvt Ltd v/s The Director General (2010). [7]Here the petitioners appealed to the HC that the CCI does not have jurisdiction to initiate any proceedings concerning films where provisions of the Copyrights Act, 1957 have exhaustive provisions. However, the Bombay HC has stated that CCI has jurisdiction over matters regarding competition and IPR. Here in the case of Kingfisher v/s CCI the Bombay HC stated that CCI is qualified to look into all matters before the Copyright Board of India.[8]
2) Competition law and abuse of IP
Competition law attempts to increase consumer welfare. Therefore, it has two objectives 1st to maintain free trade in the market and second to protect consumer interest. [1]Therefore, competition logistically against the dominant use of power in the market and anti-competitive agreements. IPR. On the other hand, enforcing an exclusive right to the owner does both IP and competition. Law ensures that IP owners do not misuse their rights. The trip agreement also agrees that some licensing practices or specified conditions regarding IP may restrain competition and that will hurt trade.
3)Competition law and patent law
Competition laws have a common role which is establishing fair market behaviour and also prohibiting the selling of patented products without authorisation patents are granted for a period of 20 years. So after the period, the monopoly of the owner vanishes, but if they were to be given for an unlimited period then competition in the market would have been affected and there would be misuse of monopoly. There for competition. Law has an important role and the rights to exclude others are given to patent owners.[9]
4. Evolving relationship between IPR and competition
During earlier times, it was evident that both IPL and competition locker were contradictory to each other. However, this view has evolved due to recent changes in the relationship. The provisions regarding IPR are made with a view of protecting the rights of the inventor and also compensating them if their rights are infringed. On the other hand, competition laws are made to increase free market access to society. The new laws and judicial pronouncements have established harmony between the two like the Competition Amendment Bill 2020, which expanded the ambit of section 34 of the Competition Amendment Act beside section 4, which was added to the Competition Amendment 2002, and this section ensured protection of IPR holders in competition law. The tension between the two subjects is ancient and acts like a connection between them ever since the statute of Monopolies ,1624[10].Developed countries like US adopted legislations regarding the subjects much earlier than countries like India ,who are in developing stage and are experimenting legislations.This works as a means to share information regarding various aspects of the two.
5. Conclusion
IPR exclusive rights and competition law is a regulating body for the smooth functioning of the market. Both seem to be opposites but work for the same goal. IPR grants privileges to owners whereas competition or restricts them if they are misused. Ultimately, the main goal of both IPR and competition law is consumer protection. Both IPR and competition law are supplementary to each other and come into picture when either of the one is misused by the other .IPR aims to provide economic benefit to its user while competition law aims to maintain fair relations between consumer and manufacturer, which helps in maximizing profit .Both the subjects aim to work for benefit of public at large and go hand in hand with each other.
[1] V.K.Ahuja, Laws relating to intellectual property rights, page3,4 th edition,(2017)
[2] https://www.wipo.int/about-ip/en/
[3] 1]V.K.Ahuja, Laws relating to intellectual property rights, page3, page 6, page 7,4 th edition,(2017)
[4] Vatsala Sood, Interface between IPR and competition law,2023 https://www.legalbites.in/interface-between-ipr-and-competition-law/
[5] The Gazette Of India, The Competition Act 2002, Page number -5,6, NO.12 of 2003,2023
[6] Valle Peruman and others v/s Godfrey Philips India Ltd,986 AIR 806,1985 SCR Supp.{3}123
[7] Aamir Khan Productions Pvt Ltd vs The Union of India,112 BOM LR 3778, D.B.,18 August 2010.
[8] Kingfisher Airlines LTD v. Competition Commission of India, Writ petition no. 1785 of 2009, Bombay High Court, 31st March,2010
[9] Panda, Aurobinda and Patel, Atul and Deo, Akshay and Khettry, Siddhartha and Mathew, Sujith Philip, Intellectual Property Law & Competition Law, vol 6, JICLT,{120},122,123,2011
[10] KD Raju,The Inevitable Connection Between Intellectual Property and Competition Law :Emerging Jurisprudence and lessons for India, Volume 18,JIPR,[111],113,2012
Author: Parth Kambli
Juris Centre 