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Richa Mishra

"A need was felt that if anti-competitive behaviour takes place after granting of Intellectual Property Rights (IPRs), it should be brought under the surveillance of the Competition Law with reasonable restrictions", official sources said.

NEW DELHI, Dec. 2

CONDITIONS imposed by patent holders during the process of its implementation can come under the ambit of the proposed Competition Law, if found anti-competitive.

"A need was felt that if anti-competitive behaviour takes place after granting of Intellectual Property Rights (IPRs), it should be brought under the surveillance of the Competition Law with reasonable restrictions. Currently, patents or exclusive right granted under the Patents Act, 1970 are exempted from purview of the proposed law," official sources said.

Elaborating further, sources said issues such as patent pooling, territorial allocation and grant back needs to be "frowned upon" under the proposed law since these would be construed as restrictive and stalling competition. Further, situations like when a foreign company gives rights to a company here with a restrictive clause that the product is not to be marketed by the Indian firm in any other market in South-East Asia, such restrictions would be looked into.

The Parliamentary Standing Committee on Home Affairs examining the Competition Bill, 2001 has accepted the department's suggestion for a clause which permits the application of competition law to examine any unreasonable conditions that may be imposed by the right holder while exploiting their rights to be incorporated in the present Bill.

In the existing Bill, the Section providing for prohibition of entering into anti-competitive agreements also specifies the areas where this provision will not apply. The rights where the provision will not apply include: Copyright under the Copyright Act, 1957; patent or exclusive right granted under the Patents Act, 1970; collective mark, permitted use, registered proprietor, registered trade mark or registered user under the Trade Marks Act, 1999.

The Competition Bill, 2001 seeks to ensure fair competition in India and the establishment of a Competition Commission of India (CCI) to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets in India, and for matters connected therewith or incidental thereto.

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