In a petition filed by Telefonaktiebolaget LM Ericsson
(Ericsson) challenging two orders of the Competition Commission of
India (CCI), the Delhi High Court (Court) has held that the
jurisdiction of the CCI under the Competition Act, 2002
(Competition Act) to probe allegations of anti-competitive
practices and abuse of dominance arising out of the monopoly
granted by patent rights cannot be taken away even if the Patents
Act, 1970 (Patents Act) provides for efficacious remedies inter
alia in the nature of grant of compulsory licenses.
Ericsson had instituted a suit for patent infringement against
Micromax and Intex (Defendants) for its Standard Essential Patents
(SEPs) relating to 2G and 3G technologies. In an interim order, the
Court allowed the Defendants to sell the allegedly infringing
devices only after payment of a fixed royalty to Ericsson.
Defendants separately filed a complaint before the CCI against
Ericsson for abuse of dominant position by inter alia
demanding excessive royalties, coercing the Defendants to enter
into a license with onerous clauses benefitting Ericsson and not
disclosing terms of the licenses agreed by Ericsson with other
licensees for the same technology. The CCI prima facie
held that Ericsson was abusing its dominant position for use of its
SEPs relating to technology used in mobile handsets by the
Defendants and accordingly passed two orders initiating enquiry
against Ericsson for abusing its dominant position.
Aggrieved by the orders of CCI, Ericsson moved the Court by way
of a writ petition challenging the jurisdiction of the CCI to
entertain a complaint of abuse of dominant position under the
Looking into the abuse of dominant position, the Court observed
that threats coercing the Defendants to enter into non-FRAND (Fair,
Reasonable and Non-Discriminatory) terms puts the Defendants into a
disadvantageous position and amounts to abuse of a dominant
position by Ericsson. The Court explained that the SEP holder may
in certain circumstances be seen as abusing its dominant position
for seeking an injunctive relief. This is so because the risk of
suffering injunctions would, in certain circumstances, exert undue
pressure on an implementer and places him in a disadvantageous
bargaining position vis-ŕ-vis the SEP holder.
According to Ericsson, the Patents Act being a special act,
would prevail over the Competition Act in case of an irreconcilable
repugnancy or conflict between the two statutes, and the Defendants
should seek remedy under the provisions of the Patents Act.
Ericsson argued that the Patents Act is a self-contained statute
and it provides remedies for abuse of patent rights by the patentee
including abuse of a dominant position The Court disagreed and
stated that "There is no irreconcilable conflict between
the Competition Act and Patents Act and in the absence of any
irreconcilable conflict between the two legislations, the
jurisdiction of CCI to entertain complaints of abuse of dominance
in respect of patent rights cannot be ousted". The Court
also held that the Competition Act is not concerned with patent
rights of a person or enterprise (which is within the domain of the
Patents Act), but the exercise of such rights.
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In the wake of liberalization and privatization that was triggered in India in early nineties, a realization gathered momentum that the existing Monopolistic and Restrictive Trade Practices Act, 1969 was not equipped adequately enough to tackle the competition aspect of the Indian economy.
The Legal Metrology Act, 2009 was passed by the Indian Parliament in order to repeal and replace The Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.
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