Recently, the Hon’ble Delhi High Court delivered a landmark judgment clarifying that the Competition Commission of India (CCI) lacks authority to inquire into the exercise of patent rights. As background, the court examined the validity of two previous judgments, in 2016 and 2020, where it was held that the CCI has the power to proceed against patentees under the Competition Act, 2022 (Competition Act). The patentees’ argued that the legislative intent and provisions of the Patents Act, 1970 (Patents Act) make it clear that the Competition Act should not deal with patent-related matters.
The court, while considering whether the Patents Act is a special act, emphasized the need to consider three key factors: (i) the subject matter in question, (ii) the intendment of the statutes in respect thereof, and (iii) whether the scheme and relevant provisions of the two statutes have any indication apropos which, the legislature felt must override the other, especially when both statutes have a non-obstante clause. Based on these considerations, the court held that the Patents Act is a special statute whereas the Competition Act is general legislation focused on regulating anti-competitive agreements and addressing abuse of dominant position.
Further, the Patents Act was amended after the enactment of the Competition Act to include within its purview provisions similar to the Competition Act where power was given to the Controller of Patents to make inquiries concerning patent-related matters. Therefore, the court observed that, the legislative intent is clear that the Patents Act must prevail over the Competition Act where the issue is in relation to exercise of rights by a patentee.
Accordingly, the court disposed of the writ petition and the appeals setting aside the proceedings initiated by CCI against the patentees. In conclusion, the Delhi High Court's judgment clarifying the authority of the CCI in relation to patentees' rights has important implications for businesses operating in India. The ruling reaffirms the special status of the Patents Act and its dominance in matters related to patent rights. This development provides guidance to future cases and enhances legal certainty in the realm of competition law and patents in India.
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