Delhi High Court rules on not ousting CCI's jurisdiction on a patent

Delhi High Court rules on not ousting CCI's jurisdiction on a patent

It disposed of the petition directing the Commission to consider the objections and act in accordance with law

The Delhi High Court has held that the jurisdiction of the Competition Commission of India (CCI) cannot be ousted merely because of the information on which it sought to initiate an inquiry, related to a patent.

The single judge bench of Justice Yashwant Varma held that the CCI is statutorily empowered to deal with all information, which it may receive on the actions that may (i) impede competition, (ii) usher in an anti-competitive environment, (iii) relate to abuse of dominant position or (iv) the adoption of unfair trade practices.

It observed, "It is only when a complaint fails to raise the aforesaid issues and concerns itself solely or exclusively with violations of the Patent Act, 1970 or the infringement or enforcement of rights that may otherwise be conferred by that Act that it could be said that the information would fall outside the purview and power of inquiry of CCI."

CCI had received information against the petitioner under the Competition Act, 2002. The informant had submitted a confidentiality request for it. The complaint alleged discriminatory pricing by the petitioner regarding a drug being offered at a relatively lower price to public procurers and at a much higher price to individual consumers.

The petitioner submitted that the Commission required it to disclose information that would be commercially sensitive and would result in exposing the petitioner to criminal proceedings under the Swiss Criminal Code.

The petitioner also submitted the issues raised in the information related to the rights of a patent holder under the Patents Act. He further stated that the Competition Act contained nothing in Section 3 (prohibiting anti-competitive agreements), which would restrict the right of any person to prevent infringement or imposing of reasonable conditions that may be necessary for protecting his/her intellectual property rights.

He maintained that other allied provisions of the Patents Act created safeguards for the rights that could be claimed by a patent holder.

Per contra, the CCI submitted that the inquiry was sought in respect of the price of a drug licensed by the petitioner and sold and distributed within the country. It was likely to impact many people. He argued that the apprehension of the petitioner about the disclosure of commercially sensitive information was misplaced. The Commission said, during the inquiry, it was open to the petitioner to claim confidentiality to any disclosure it made before the Commission.

The court, thus, stated that it was confident that the Commission would duly take into consideration the objections raised by the petitioner, which included the former's assumption of jurisdiction.

It further held that the Act did not exclude the jurisdiction of the Commission completely in cases involving patent, when the information related to issues pertaining to an anti-competitive environment, abuse of dominant position or the adoption of unfair trade practice.

Reliance was placed on Monsanto Holdings Pvt. Ltd. and Ors. vs. Competition Commission of India & Ors. case, where a single bench of the high court held there was no conflict between the Patents Act and the Competition Act and that the jurisdiction of CCI to entertain complaints regarding abuse of dominance in respect to patent rights could not be excluded.

The court held, "It becomes imperative to observe that the initiation of an inquiry by the Commission based on information that may be received, is not liable to be either viewed or understood as the initiation of any coercive steps. The entities, whose operations transcend jurisdictions, can neither assume nor claim immunity or exemption from laws or compliance with statutes, which are promulgated and are not shown or established to fall foul of international or treaty obligations of nations."