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The ASSOCHAM International Conference on the "Interface between Intellectual Property and Competition Law"

Posted by Nehaa Chaudhari at Jul 22, 2013 05:55 AM |
An international conference on interface between intellectual property and competition law was organized by ASSOCHAM on July 12, 2013 in New Delhi. In this post, Nehaa Chaudhari shares select notes from the conference.

All views expressed are only of the participants and cannot be taken to be those of any organization or the like that they may represent.


D.S. RAWAT- SECRETARY GENERAL- ASSOCHAM- WELCOME ADDRESS

  • IPR and competition laws in conflict or have provisions (in existing law) that already take care of this possible conflict?
  • What happens if an IP right holder acquires a ‘dominant position’ by virtue of these rights?
    • Abuse of dominant position provisions get attracted if rights are beyond the boundaries of IPRs.
  • Anti-competitive agreements (and beyond the objective of preventing infringement)- then what happens?

V. LAKSHMI KUMARAN- MANAGING PARTNER, LAKSHMI KUMARAN AND SRIDHARAN- THEME ADDRESS

  • Trans-border transactions are normally of two types:
    (a) trade (in goods and services) - WTO mandate is free trade of goods and services between nations;
    (b) investment.
  • “Free” trade should also be “fair” trade.
  • Competition law will not question the grant of the IP rights. It will question how you use them, especially when/if you use in a way that is detrimental to competition.
  • Patent law places many restrictions on what you can and cannot do- these ‘can’t do actions’- if you perform them, you will be scrutinized under competition law.
  • Cases in US/Europe- challenging patents were withdrawn by ‘compromise’ but agreements really spoke of ‘something more’ promised by the patent holder if the challenging suit was withdrawn- scrutinized by competition law.

NUNO PIRES DE CARVALHO- DIRECTOR, IP AND COMPETITION POLICY DIVISION, WIPO, GENEVA- SPECIAL ADDRESS ([email protected])

  • 2007- Agenda for Development at WIPO- Committee on Development and IP (CDIP) to supervise implementation of the AD and coordinate with other Committees.
  • WIPO- as of now, member states do not want to embark on negotiating processes on IP and Competition but rather want to better understand it.
  • WIPO- 2011-2012- Project on IP and Competition Law.
  • WIPO Goal- to establish WIPO as a global forum on IP and Competition policy.
  • Rationale (WIPO)- same as the 3 DA (2007) recommendations.

CHAITANYA PRASAD- IAS, CONTROLLER GENERAL OF PATENTS, DESIGNS AND TRADEMARKS- KEYNOTE ADDRESS

  • Monopoly- genesis of both IP and Competition Law (IPRs= regulated monopoly= not bad- IPRs= carefully granted essential monopolies regulated by State).
  • Competition Law and IP have common goals- better technology etc., and also economic growth and better quality of life for consumers.
  • IPRs- (a) industrial IPRs- GIs, patents, TMs, IDs, etc and (b) non industrial IPRs- copyright and related rights.
  • Patent Law- grant of Compulsory licences in some situations- Doctrine of Exhaustion of IPRs- domestic or international?- international committee divided on this.
  • READ- Adams v. Burke- 1873 SCOTUS.
  • DB- Delhi HC- parallel imports- allowed under Trademark Law?
  • New York Times- 06/06/13- generic drug market v. patent holder- anti competitive markets- SCOTUS decision.
  • Standards- especially in communication networks- generally have higher royalties- disclose existence of IPRs and agree to license at reasonable rates- REQUIREMENT.
  • IP Law- in built mechanisms to address abuse and these are furthered by competition law.
  • IP + CL- hand in hand for welfare of market and growth of economy.

ASHOK CHAWLA- CHAIRPERSON, CCI- INAUGURAL ADDRESS

  • “Very rightly” WIPO is not seeking to harmonize regime across nations- this has to be a domestic process of laws/jurisprudence.
  • Similarities/intersection of IP and competition law:
    • IP + competition law- both put a premium on innovation – IP does this directly and competition law because there is a need to do better than other firms.
    • Lead to technical and economic innovation.
    • Goals – greater good for consumer and society.
  • Merger Control- crystal gazing on post merger scenario is required. Competition law authorities required to take nuanced approach in fast growing and tech. sectors- ex ante analysis- need to be upfront to scrutinize kind of restrictions being imposed under the deal- need to balance protection of knowledge of the mind with protecting the interests of the stakeholders as well.- this is the CCI approach.
  • The aforesaid balancing act is also going to be a critical area over the next twenty years- especially for policy makers.
  • Wider dissemination of advocacy is required.
  • Question to Chawla- ‘pay for delay’ agreements/reverses payments- our generic companies (what happens to them?)- what happens to the consumers? Is there going to be a study on this by the CCI?- Chawla said that in the generic drugs sector we are already strong- he said that this is going to be an issue Indian manufacturers will have to grapple with eventually (internationally)- but we will take care when it comes here.- Carvalho intervened and pointed out that ‘pay for delay’ agreements and reverse payments were different things.
  • Question to Chawla- IPR section on the CCI website does not have any content anymore- Chawla said that they will rectify this and understand that the section would be very useful in terms of clarifying the CCI’s stance on this intersection between Competition Law and IPRs.

Technical Session 1- “Balancing IPRs against Fare Practice”- Moderator- Hitesh S. Barot- Senior Intellectual Property Counsel, GE India.
NUNO PIRES DE CARVALHO- DIRECTOR, IP AND COMPETITION POLICY DIVISION, WIPO, GENEVA- THE INTERFACE BETWEEN IP/COMPETITION IN WIPO DEVELOPMENT AGENDA
([email protected])

  • Balanced IP- the Foundation of economic democracy.
  • Trade name- reputation- basis for survival in the market. Trade secret- sets you apart from competitors- IP not all about reputation- IP protects and promotes intangible differences that businesses introduce in their products/services- that is, differentiation. This could be of origin, quality, invention, creation, location, reputation, price etc. this differentiation is behind every IP asset.
  • What is balanced IP?
    • IP in the right dosage- (not too much- examples of too much- IP for unmodified genes/functional signs/or common terms as trademarks.)- (not too little- example of too little- lack of protection for sound/smell designs, tolerance for counterfeit goods and piracy, no protection for new and inventive traditional knowledge etc).
    • IP that is not abused.
    • IP that is not distorted by external circumstances- regulation distorts competition and therefore distorts IP. Since IP is about differentiation, before innovation it promotes social, cultural and economic freedom. IP is the foundation of any free market economy based on consumers’ and entrepreneurs’ freedom.

PARTHASARATHY R., SENIOR PARTNER, LAKSHMI KUMARAN AND SRIDHARAN- THE INTERFACE BETWEEN IP/COMPETITION IN THE PHARMACEUTICAL SECTOR ([email protected])

  • Patents Act- Section 140- certain prohibitions.
  • Section 107A of the Patents Act appears to provide for international exhaustion.- Delhi HC (2012)- Kapil Wadhwa v. Samsung International extended international exhaustion to trademarks also.
  • Areas of concern- ‘pay for delay’ agreements- will Section 3(5) of the Competition Act apply?
  • US- a granted patent is presumed to be valid. India does not envisage such a framework.
  • Getting a patent and getting the right to practice a patent are very different in patent law.
  • Acquiring patents by fraud attracts section 4 of the Competition Act.
  • Unfair pricing- not an offence to have excessive pricing in the US.
  • Standards- when you develop patents here, you AGREE to compulsory license on a FRAND basis. Only issue then is what are FRAND terms- won’t get injunctions on this issue here in India, since you can prove damages are enough of a remedy- so it all comes down to negotiations.

MIHIR RALE- AVP- LEGAL AND REGULATORY, STAR INDIA PRIVATE LIMITED - THE INTERFACE BETWEEN IP AND COMPETITION LAW IN THE BROADCASTING SECTOR

  • Overregulation leads to lack of innovation- this is his conclusion.
  • Content costs rise constantly- recouping them is very hard since channel prices have remained static for about eleven years now- supposed to have been an interim measure by the SC but TRAI is allowing it to continue.
  • Question by Barot- who decides how to price is going to be something interesting to debate.
  • (Sort of answering the ,above> question)- Mandatory Sharing Act- share feed w/ Prasar Bharathi- feed here refers to sporting events of national importance- the purpose is to give access to those who have terrestrial network (not cable/DTH)- but provision in the Cable Act says operators HAVE to carry two DD channels- so.. now operators don’t want to carry other (sports) channels, since Team India is available on DD anyway.

HEMANT KUMAR- GROUP GENERAL COUNSEL, ESSAR GROUP- ANTI COMPETITION AND IPR- DIFFERENT MEANS TO THE SAME END?

  • Can of course recover costs of innovation- (under IP license agreements)- but only up to a reasonable limit.

SANJEEV GEMAWAT- SENIOR VICE PRESIDENT- LEGAL AND SECRETARIAL, DLF RENTCO GROUP- IPR AND COMPETITION LAW- INDUSTRY PERSPECTIVE

  • The challenge is not competition, but protecting IPRs, given the size of the economy.
  • How will authorities interpret limits= challenges?
  • Challenge- threshold limits under Section 5 of the Competition Act- considering size of the economy.
  • Barot’s comment- soft convergence is emerging as a solution.

Technical Session 2- “Innovation and Competition”- Moderator- Geeta Gouri- Member, Competition Commission of India
BALAZS GARGYA- FIRST SECRETARY, EUROPEAN UNION DELEGATION TO INDIA – INNOVATION AND IPR

  • Indo EU FTA
    • Agreement will recognize India’s access to medicines policies.
    • Both sides have shown flexibility.
    • All our flexibilities will be untouched.
    • Right to compulsory licenses maintained and recognised.
    • Agreement not going beyond existing obligations.

J.L.N. MURTHY- GENERAL COUNSEL- ASIA PACIFIC, RED BULL- RECENT CHANGES ON MADRID PROTOCOL

  • Anand Sharma recently deposited the instrument of India’s accession to the Madrid Protocol.
  • This is w.e.f. 08/07/2013 in India.
  • Accession strengthens march towards excellence in IP recognition.

MUNESH MAHTANI- GLOBAL COMPETITION COUNSEL, GOOGLE, U.K.- COMPETITION LAW ENFORCEMENT IN THE HIGH-TECH SECTOR

  • Challenges for competition authorities:
    • Defining markets and assessing market power- increasing market shares may not indicate market power (e.g.- Microsoft/skype)- need to look at actual competitive dynamics.
    • Identify abusive conduct.
    • Important to distinguish between harm to competitors and harm to consumers.
  • Existing antitrust laws can deal with high tech. sectors.

MANAS KUMAR CHAUDHURI- CO-CHAIRPERSON, ASSOCHAM NATIONAL COUNCIL FOR COMPETITION LAW AND PARTNER, KHAITAN AND CO., MONOPOLISTIC BEHAVIOURS IN HORIZONTAL AGREEMENTS AND VERTICAL AGREEMENTS

  • Monopolistic behaviours in horizontal agreements and vertical agreements.
  • GI agreements- falling foul of Competition Law?
  • Assignment agreements- terms  anti competitive (if any)- then principle of severability of contract will apply.
  • Function of patents- to reward innovative work of inventor and NOT to protect public from defects. (ECJ decision 15/74).
  • The beginning of competition law assessment lies where IPR enters the market.

SAMIR GANDHI- PARTNER, AZB & PARTNERS, RELATIONSHIP BETWEEN IPR, MONOPOLIES AND DOMINANCE

  • IPR and Competition Law are two sides of a coin aimed at furthering innovation.
  • Under Section 4 of the Competition Act, 2002, you cannot take the defence of “doing so to protect my IPRs’ stance for your actions.
  • CCI has not yet had an IPR+ competition law ‘meaty’ case yet.
  • Refusal to license IPRs- competition law cannot say that you HAVE to license, but MAY be construed as anti-competitive if not backed up by sound objective claims.
  • At what stage are you required to license?

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