Opening a new chapter in intellectual property and patent law dispute resolution, the Delhi High Court has held that the Competition Commission of India (CCI) had the jurisdiction to entertain complaints regarding abuse of dominance of Patent Rights.
The bench of Justice Vibhu Bakhru in its judgment issued on Wednesday dismissed the writ petitions filed by Telefonaktiebolaget LM Ericsson challenging two separate decisions of the CCI to look into allegations of abuse of market dominance. Senior advocate Prathiba M Singh, who had appeared on behalf of Ericsson, said that the judgment “would start a good debate on IP and Competition law in the country,’ as more such cases would now come up before the courts.
Micromax India and Intex, which manufacture telecom equipment in India, had alleged that Ericsson was imposing unfair conditions for granting license to use its Standard Essential Patents (SEP). The CCI had directed investigation into the allegations, prompting Ericsson to approach the court.
The firm had claimed that the CCI did not have the jurisdiction to issue such orders as the dispute in the case was on issues of grant of patent licenses, which would come under the jurisdiction of the Controller General of Patents, Designs and Trade Marks or a Civil Court. The single bench of the high court has, however, held that there was “no irreconcilable repugnancy or conflict between the Competition Act and the Patents Act. And, in absence of any irreconcilable conflict between the two legislation, the jurisdiction of CCI to entertain complaints for abuse of dominance in respect of Patent rights can’t be ousted.” The bench also noted that while the dispute under the Patent Act would be specific to the parties involved, the “the orders passed by CCI are in rem.”
“The question whether there is any abuse of dominance is solely within the scope of the Competition Act and a civil court cannot decide whether an enterprise has abused its dominant position and pass orders as are contemplated under Section 27 of the Competition Act. Merely because a set of facts pleaded in a suit may also be relevant for determination whether Section 4 of the Competition Act has been violated, does not mean that a civil court would be adjudicating that issue,” said the court.
Citing various European court judgments, the bench also held that “there is good ground to hold that seeking injunctive reliefs by an SEP holder in certain circumstances may amount to abuse of its dominant position.” However, during the discussion, the bench also observed that “it does appear that Ericsson had made efforts to arrive at a negotiated settlement with Micromax and Intex, who on the other hand, appear to have been manufacturing/dealing with products using the patented technologies without either obtaining a licence from Ericsson or approaching the Controller of Patents for a compulsory licence.”
The bench has however held that the observations made in the judgment would not be considered when the dispute is being decided on merit.
Sources have said that Ericsson would be filing an appeal challenging the judgment.