THE INTERFACE BETWEEN IPR AND COMPETITION LAW
November 23, 2019
The interface between Intellectual property rights and Competition law has attracted growing attention, particularly as a result of the expansion and strengthening of innovation and technological sector at the global scale, especially in developing nations. Just as the like poles of a magnet repel each other similarly the impetus of Intellectual Property and Competition law creates the apparent antagonism between the two. The intellectual property rights regime furnishes exclusive rights to those who are innovating new product or creating new things by providing monopoly rights to spur innovations. The essential attribute of intellectual property rights is the 'right of exclusion' which allows the owner to exercise his right to exclude the whole universe, while on the other hand, competition policy seeks to avoid market barriers by restricting monopoly and exclusivity to ensure freedom of trade and commerce in the market. In general, it has been realized that both the areas are complementary to each other with two different bodies of law having their independent and different area of operation.
The conflict between the competition policy and intellectual property right regime has been most controversial in the context of patent laws. The interface between competition policy and patent law arises out of the methods that they embrace to achieve their reciprocal goals. On the one hand, competition policy prescribes that there is no unreasonable restraints on competition, on the other hand; patent laws reward the inventor with a temporary monopoly that insulates him from competitive exploitation of his patented article.
IPRs protection is a tool meant to cultivate innovation, which benefits consumers through the development of new and improved goods and services, and promotes economic growth. It confers on innovators the rights to legitimately exclude, for a limited period, other parties from the commercial use of innovative products and processes based on that new knowledge. In other words, innovators or IPRs holders are benefited with a temporary monopoly by the law to recover the costs incurred in the research and innovation process. As a result they earn rightful and reasonable profits, so that they have incentive to engage in innovation.
Competition law, on the other side, is essential in curbing market lacunas, disciplining anticompetitive practices, preventing abuse of monopoly, inducing optimum allocation of resources and benefiting consumers with fair prices, wider choice and better qualities. It, therefore, ensures that the dominant power associated with IPRs is not excessively compounded or leveraged and extended to the detriment of competition. Besides, while seeking to protect competition and the competitive process, which in turn encourages innovators to be the first in the market with a new product or service at a price and quality that consumers want, competition law underscores the importance of stimulating innovation as competitive inputs, and thus also works to enhance consumer welfare.
Although the two regimes are diverse, they tend to show a certain degree of collocation on various grounds where both disciplines prevail by limiting each other's right. The interface between these two areas of law is generally anticipated in many sectors of economy, including Pharmaceutical sector where there is a lack of consumer knowledge, which gives rise to the problem of Pay for delay/Reverse delay settlements, discrimination in patient assistance program, ever-greening of patents, etc. and for which the concept of 'Compulsory Licensing' was addressed to draw the balance between intellectual property right and competition law so that the owners of intellectual property rights cannot misuse its privileges and curb competitiveness in the market by abusing its dominant position.
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