Ongoing Debate: Intellectual Property VS Competition Law :Crux to Know

India under section 84 of Patents Act 1980 granted compulsory license to NATCO for production the anti-cancer drug Nexavar against Bayer which was holding patent for Nexavar.

The IPR is often seen overriding the Competition law brewing a fresh debate each time whether the two are good enough for the producers and consumers alike. 

What is IPR (Intellectual Property Rights) ? 

Intellectual Property Rights are the rights given to a creator over the use of his creations. It is aimed at incentivizing creativity and innovation.  It can include creations such a new drug composition, business module, product, software and so on.   Some of the aspects of intellectual property include patents, trademarks, copyrights, geographical indications and industrial designs.

What is Competition Law ? 

Competition law seeks to avoid market barriers and benefit consumers by encouraging competition among a multiplicity of suppliers of goods, services and technologies.   The Competition Law has been put in place in order to ensure competitive environment among the firms.  India’s Competition Law was formulated as Competition Act 2002 which was later amended in 2007.   The Competition Commission of India (CCI) under the ambit of Competition Act prevents practices having adverse effect on competition, promotes and sustains competition in markets, protects the interests of consumers and ensures freedom of trade carried on by the participants.

Why it is in News ?

The IPR is often seen overriding the Competition law brewing a fresh debate each time whether the two are Interface between Competition Law and Intellectual Property Law  Intersection of the two laws is observed when there is a interchange in the exclusive rights given by IP law to a company and the anti-competition practices that the Competition Law tries to protect.  The Competition law stands abused when IPR holder imposes unfair and discriminatory conditions or price.  Limits or restricts production of goods or provision of services.  Denies market access to other entities.  Uses its dominant position in one market to enter into another market.

In developing countries, strengthening of IP law has taken place without commensurate levels of anticompetitive practices.  It poses challenges to policymakers to sort out the negative fallouts of excessive monopoly power because of rights of IP owner.  In dealing with this, patent offices are not competent enough for determining “excessive” or “unaffordable” pricing for issuing compulsory licenses to third party under TRIPS.  Competition Commission of India also does not have required competence to deal with this trade off that exists between IP law and Competition law.

 

What can be done ?
There is need to balance competition and protection of intellectual property rights.  Strengthen competition laws in order to control possible abuses emerging from the acquisition and exercise of IPRs.  Use the flexibilities allowed by the TRIPS Agreement to determine the grounds for granting compulsory licences to remedy anti-competitive practices relating to IPRs.  Experts in economics should be recruited in Patent offices to infuse competence for determining excessive or unaffordable prices.  Develop policies, including guidelines, to prevent and correct abuses in the acquisition and enforcement of IPRs.
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