The Evolution and Interrelationship of Intellectual Property Rights and Competition Law

As one famous saying goes, Competition brings out the best in products and the worst in people. While this quote, to some extent,  stands out as a reflection of human behaviour with respect to their urge to stay ahead in the constantly competing and evolving economy, it impliedly dictates standards of fairness and equity in sustaining a vibrant marketplace with dignity. Nevertheless, in the attempt to connect the dots between maintaining fairness in the competition and preserving intellectual property rights, the relationship between these two has been coming across as a contemporary issue. Ideally, both of these laws are designed to serve distinct purposes within their respective domains. Consequently, there is a delicate boundary between them; however, this boundary is frequently blurred, leading to conflicts, and that's the primary reason they are often called friends in disputes or conflicts in the legal world since promoting fair competition is as crucial as safeguarding innovations, it is essential to strike a balance. This blog addresses the relationship between intellectual property services and competition law, considering their jurisdictional evolution, intended functions, and other significant dimensions.

Balancing IPR Protection And Competition Regulation: Why it is important?

The balance between IPR protection and competition regulation is essential for a thriving, innovative, and fair market. Intellectual property rights services play a crucial role in protecting innovations, but without competition regulation, these protections could lead to monopolistic practices. A well-balanced approach ensures that innovation is rewarded, competition is maintained, and consumers benefit from both new products and fair prices. Even though they often seem at odds, intellectual property rights services can be seen as an element of competition law. In Aamir Khan Production Private Limited v. The Director-General (2010), the Bombay High Court affirmed that the Competition Commission of India has jurisdiction over matters of competition and IPR. This position was later upheld by the Competition Appellate Tribunal in Kingfisher v. Competition Commission of India (2012).

IPR and Competition Law: The evolution and necessity of maintaining balance

As economies grew and markets expanded, the need to regulate competitive practices also became evident. Competition law, often referred to as antitrust law, emerged to prevent monopolistic behaviours and promote fair competition. Its roots can be traced back to the late 19th and early 20th centuries, particularly with the enactment of the Sherman Antitrust Act in the United States in 1890, which aimed to curb concentrations of power that interfere with trade and reduce economic competition. Then, the interplay between IPR and competition law became increasingly significant as industries advanced and technology proliferated. While Intellectual Property Right Services aims to protect and reward innovation by granting temporary monopolies, competition law seeks to prevent these monopolies from stifling competition and harming consumers.

Sui Generis Protection within the Framework of Intellectual Property Rights and Competition Law

There are several reasons why rule-makers might prefer to frame legal rules with a narrow focus. In some instances, a narrowly tailored rule is the only viable method to accomplish a certain goal. In many other scenarios, however, there is a choice between regulating an entity, activity, or relationship using a broad framework (such as patent or property law) and crafting a more specific law. From this conceptual standpoint, Sui generis protection provides a specialised legal framework for protecting intellectual creations or assets that do not fit squarely within the traditional categories of patents, copyrights, trademarks, or trade secrets. This unique form of protection is designed to address situations where traditional IPR regimes and Intellectual Property rights services may fall inadequate or unsuitable. Although the foundation of modern intellectual property law revolves around general classifications like patents, copyright, and trademarks, there exist specific contexts where sui generis protection is deemed necessary.

How do sui generis rights contribute to fostering fair competition?

Sui generis rights provide creators and innovators with incentives to develop new ideas, products, and services by offering them exclusive rights or protection. Sui generis rights fill gaps in traditional intellectual property laws by providing protection for unconventional creations or subject matters that may not qualify for standard patents, copyrights, or trademarks. Sui generis rights can help to prevent monopolistic practices by ensuring that intellectual property is not concentrated in the hands of a few dominant players. Sui generis rights offer specialised legal protections for a wide range of intellectual creations, helping to create a dynamic and competitive marketplace that benefits both creators and consumers.

Conflict resolution techniques for IPR and Competition Law

Strategic Balancing Methods:

Navigating these challenges effectively requires a sophisticated strategy. This includes employing a "rule of reason" to evaluate the anti-competitive impacts of IPR, permitting exemptions for competition-promoting activities, and mandating the fair licensing of Standard-Essential Patents (SEPs) ;to prevent monopolisation.

Compulsory Licensing Policy:

Instituting a policy for granting compulsory licenses in cases of refusal to deal, promoting fair competition and preventing monopolistic practices.

Supporting Innovation and maintaining market equilibrium:

Intellectual property rights (IPRs) and competition law should synergise to protect the rights of IP holders and encourage innovation. Authorities of IPRs and competition laws should collaborate to maintain market equilibrium.

Conclusion

Despite initial appearances of discord, Intellectual property rights and Competition law are complementary; one comes into the picture when the other is exploited. For instance, competition law champions consumer diversity while meticulously managing the equilibrium between producer entitlements and consumer interests, while IPR provides manufacturers with the means to be duly rewarded for their innovative product designs, thereby serving the interests of the public at large.

How can Hedgesquare Help?

At Hedge Square, We provide Intellectual Property rights services. Our Intellectual Property Rights consultants offer informed guidance for safeguarding and registering your intellectual property assets. Moreover, we provide assistance with the application and registration process, ensuring compliance with all relevant procedures.