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Anti-Competitive practices in Ipr

ANTI-COMPETITIVE PRACTICES IN IPR INTRODUCTION Intellectual property rights are the intellect rights given to persons over the creations of their minds for any innovation or newness. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time. Intellectual property are of various kinds such as patent, copyright, trademark, geographical indications, industrial design and layout design of integrated circuit. In India these property which is intangible in nature is duly recognized by law. This rights are necessary for the protection of the owner of these intellectual property, they can be inventor, author or creator. But there are some anti-competitive practices associated with the intellectual property that tends to exploit market through its power of monopoly and are as follows: In the Chapter relating to Prohibition of Agreements (Anti –Competitive Agreements) under section 3 (5) states that: “Nothing contained in this section shall restrict (I) the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under: (a) The Copyright Act, 1957 (14 of 1957) (b) The Patents Act, 1970 (39 of 1970) (c) The Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of 1999) (d) The Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999) (e) The Designs Act, 2000 (16 of 2000) (f) The Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000). ANTI-COMPETITIVE AGREEMENTS. Further the term reasonable condition is not defined under the act, that would rendered as unreasonable relating to IPR such practices are as follows: Patent pool Patent pools can be defined as an agreement between two or more patent owners to license one or more of their patents to one another or to third parties. Often, patent pools are associated with complex technologies that require complementary patents in order to provide efficient technical solutions. Through the agreement patent holder can be excluded from the use of some patent or possibly the bigger entities holding patents may form into one so the competition can be avoided. This type of practices are watched by authorities established specifically to promote healthy competition in the market and to prevent such bad practices which will exploit market. A device might contain several component and each one is patented by different firm. Problem will arise at a point when one firm wants to use that component unit’s technology which is very hard negotiating with the patent holder company to get the licensee for its utilisation. There is no guarantee that the negotiation will be included positively or achieve what they seek for which sometimes become very tardy process. So to overcome this it is assisted to make one entity from where all the components can be licenced that is a joint venture for sharing the intellectual property rights. It is majorly done in electronics sector relating to software industry. It reduces product development and market competition, these are differentiated in pharmaceutical sector. Due to patent pooling several patents are brought under single contract due to which abnormalities of litigation is avoided as there is transparency in the transfer of licensee. Pools only include patents that are complementary and necessary for implementing a standard, they furthermore reduce royalty rates for users of the standard by eliminating wasteful multiple marginalization. Patent pool is often regarded as welfare enhancing tool when the patents are complementary. The aim of patent pool is profit oriented as collectively licencing would be cost efficient. The firm’s would then be earning high profits by keeping new competitors outside markets. In short, if all the technology is locked in a few hands by a pooling agreement, it will be difficult for outsiders to compete. Tie-in arrangements The second such prohibited practice is of tie-in arrangements. It states that the licensees to purchase goods from the patentee itself and not from other producers/manufactures/sellers or there might be condition that patentee will only take goods from licensee only if licensee purchases from patentee or he will not buy goods from any other producer, a type compulsory clause to follow, it can be for even unpatented goods as well which would forbid licensee to compete. In Shri Sonam Sharma vs Apple Inc. Usa & Ors it was held that the distribution arrangement between the impugned parties helped create a market for iPhone in India wherein domestic consumers got an opportunity to purchase a contemporary handset which was otherwise available through the grey market and thus tying arrangement, the anti-competitive concerns in terms of section 3(4) violations does not hold. An agreement may provide that royalty should continue to be paid even after the patent has expired or that royalties shall be payable in respect of unpatented know-how as well as the subject matter of the patent. There could be a clause, which restricts competition in R & D or prohibits a licensee to use rival technology. A licensee may be subjected to a condition not to challenge the validity of IPR in question. A licensee may require to grant back to the licensor any know-how or IPR acquired and not to grant licenses to anyone else. This is likely to augment the market power of the licensor in an unjustified and anti-competitive manner. A licensor may fix the prices at which the licensee should sell. The licensee may be restricted territorially or according to categories of customers. A licensee may be coerced by the licensor to take several licenses in intellectual property even though the former may not need all of them called package licensing which may be regarded as anti-competitive. A condition imposing quality control on the licensed patented product beyond those necessary for guaranteeing the effectiveness of the licensed patent may be an anti- competitive practice. Restricting the right of the licensee to sell the product of the licensed know-how to persons other than those designated by the licensor may be violative of competition. Such a condition is often imposed in the licensing of dual use technologies. Imposing a trade mark use requirement on the licensee may be prejudicial to competition, as it could restrict a licensee's freedom to select a trade mark. Indemnification of the licensor to meet expenses and action in infringement proceedings is likely to be regarded as anti-competitive. Undue restriction on licensee's business could be anti-competitive. For instance, the field of use of a drug could be a restriction on the licensee, if it is stipulated that it should be used as medicine only for humans and not animals, even though it could be used for both. Limiting the maximum amount of use the licensee may make of the patented invention may affect competition. A condition imposed on the licensee to employ or use staff designated by the licensor is likely to be regarded as anti-competitive. The above list is not exhaustive but illustrative Some other practices as anti-competitive under section 3 of competition act 2000 are as follows: Exclusive licensing is another category of possible unreasonable condition. Examples of arrangements involving exclusive licensing that may give rise to anti-competition concerns include cross licensing by parties collectively possessing market power, grant backs and acquisitions of IPR licensing arrangements likely to affect adversely the prices, quantities, quality or varieties of goods and services will fall within the contours of competition law as long as they are not in reasonable juxtaposition with the bundle of rights that go with IPRs. Grant-Back Clause the licensee is required to grant back the developments taken place to the Licensor, it is also referred as licence-back clause. Acts performed by enterprises which lead to abuse of dominant position which falls within the meaning of S 4 of the Act are as follows: (a) (I)    directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or services; or (ii)   Price in purchase or sale (including predatory price) of goods or services; or (b)  Limits or restricts – (i)  Production of goods or provision of services or market therefor; or (iii) Technical or scientific development relating to goods or services to the prejudice of consumers; or (C) In practice(s) leading to denial of market access in any manner; or (d) Makes conclusion of contracts subject to acceptance by other parties of supplementary obligation which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or (e) Uses dominant position in one relevant market to enter into, or protect, other relevant market. Exclusive supply agreement any  in any manner the purchaser in the course of his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person. Refusal to deal includes any agreement which restricts, or is likely to restrict, by any method, the persons or classes of persons to whom goods are sold or from whom goods are bought." Hindustan Coca Cola Beverages Pvt. Ltd was has contravened the provisions of section 3 (4) of the Act as this agreement has created appreciable effect on competition by creating entry barriers to other entrants in the relevant market and foreclosing competition by driving out the competitors from the relevant market. The agreements are adversely affecting the competition in the markets. It is not conclusively borne out that the arrangements have either created entry barriers for new entrants or drove existing competitors out of the market, nor is there any appreciable effect on the benefits accruing to the ultimate consumers.

Posted By

Harpal Parmar

2 years ago

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Geographical Indication of Goods (Registration and...

What is Geographical Indication ? In simple layman language the term Geographical Indication would refer to “a sign that identifies a product as emerging from a particular location or area which provides the product a unique quality or reputation or some other characteristic.”[1] As per World Intellectual Property Organisation (WIPO), “a geographical indication (GI) is a sign used on products that have specific geographical origin and possess qualities or a reputation that are due to that origin. The qualities depend on the geographical place of production, there should be a clear link between the product and it’s original place of production”. [2] India being a member of the World Trade Organisation (WTO) are bound to comply with the Agreement on Trade – Related Aspects of Intellectual Property Rights.[3] Section 2(3)(e) of the Geographical Indication of Goods (Registration and Protection) Act, 1999 defines “geographical indication” in relation to goods as “ an indication which identifies such goods as agricultural goods, natural goods or manufactured goods, as originating, or manufactured in the territory of a country, or a region, or a locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to it’s geographic origin and in the case where such goods are manufactured goods, one of the activities of either the production or of processing or preparation of the goods concerned takes place in such territory, region or locality, as the case maybe”.[4] Article 22(1) of the TRIPS agreement reads, “geographical indications are, for the purpose of this agreement, indications which identify a good as originating in the territory of a member, or a region or locality, in that territory, where a given quality, reputation and or other characteristic of the good is essentially attributable to it’s geographical origin.[5] Objective The objective behind the enactment of this Geographical Indication of Goods (Registration and Protection) Act, 1999 by Act no. 48 of 1999 on 30th December, 1999, can broadly be categorised under three thresholds.[6] Geographical indication by means of specific law governance could adequately protect interests of the producers of such goods. Exclusion of unauthorized persons by carrying out geographical indications would protect consumers from being deceived. Goods bearing Indian geographical indications would be promoted in the export market.   Conditions for Registration Any producer, organisation, association of persons, or authority established under law has the right or power to apply for a geographical indication, as long as the person applying represents the interests of the producers.   The registration application for a geographical indication should be in written form, alongside the prescribed fees, and it should be addressed before the “Registrar of geographical indications”.[7]   The corollary to Section 9[8] of the Geographical Indications of Goods (Registration and Protection) Act, 1999 deals with conditions for registration of certain geographical indications. The conditions include : The geographical indications be such that it is not of deceiving or confusing nature. The geographical indications be such that it is not contrary to any existing enforceable law. The geographical indication be such that it does not contain any obscene or scandalous content. The geographical indications be such that it does hurt any religion or section of society of the country. The geographical indication be such that it does not disentitle to protection in any court. The geographical indications be such that the determined generic names or indications of goods are not ceased but protected in their origin country. The geographical indications be such that it truly represents the goods to the territory, locality or region of it’s origin and not elsewhere.   The Geographical Indication Registration Process   The registration process under the Geographical Indication of Goods (Registration and Protection) Act, 1999  requires a few number of steps as per rules laid down by the Geographical Indications Registry, Intellectual Property, India. The steps are as follows: [9] Filing of application: the initial step is to check whether the indication falls within the ambit of the definition of a Geographical Indication under Section 2(1)(e)[10] of the Act. Application must be in triplicate form. Application must be duly signed by the applicant or his agent and must be attached by a statement of case. Application must contain details of special characteristics and information regarding how such standards are to be maintained. Application must contain three certified copies of the map of the specified region relating to the Geographic Indication. Application must contain details of the inspection structure for regulation of Geographic Indication to the territory it relates. The application must include the applicant’s address. In case of multiple producers, collective reference to all the producers are to be made in the application and the geographic indication if registered would be accordingly indicated in the register. The applicant is required to have an address for service in India. The application as per the guidelines are to be filed either be a registered legal practitioner or a registered agent. Preliminary Scrutiny and Examination: the application process is followed by a scrutiny and an examination. The application is scrutinized by the examiner to monitor deficiencies. After the scrutinised report mentioning the deficiencies are informed to the applicant, it must be clarified and amended by the applicant within one month. The statement of case attached in the application is reviewed and assessed by consultative board of experts. After the due scrutiny and assessment process is completed, the Examination report is issued. Show cause notice: after the issue of the examination report, the following procedure is followed. If the Registrar is unsatisfied or has an objection regarding the application, he communicates the same to the applicant. The applicant is then required to respond within a period of two months or apply for a hearing. The applicant needs to communicate his decision, and if he / she is going for appeal, a request for the same is to be made within one month. If an application is accepted in error, the Registrar may withdraw the application after providing an opportunity of being heard. Publication in the Geographical Indication Journal: After the application is accepted, within three months it has to be published in the Geographical Indications Journal. Opposition to Registration: after the publication in the Geographical Indications Journal, a procedure for “opposition to registration” may arise. Any person within three months (extendable by one month on request) from publication at the Geographical Indications Journal has the opportunity to file a notice of opposition against the application. The copy of the “notice of opposition” is sent to the applicant by the Registrar. The applicant is required to send a copy of the counter statement within two months. The copy if the counter statement is to be served to the person filing the “notice of opposition” by the Registrar. If an applicant fails to reply with the counter statement, it is presumed that he has abandoned his application. Both the parties are then required to lead their evidences by way of an affidavit and supporting documents, and subsequently a date of hearing is fixed. Registration: the main registration process actually is completed with this process. Once the application for the Geographic Indication is registered, the Registrar finally registers the geographic indication. The date of filing is regarded as the date of registration. A certificate with the seal of the Geographic Indications Registry is issued by the Registrar to the applicant. Renewal: the registration of the Geographic Indication is for a period of 10 years or for the termed period till the date on which the registration of geographic indication in respect of which the authorised user is registered expires, whichever is earlier, after which it needs to be renewed by payment of a renewal fee. Appeal: persons aggrieved by the orders or decisions have the option for appeal before the Intellectual Property Appellate Board (IPAB) within a period of three months. Public Review[11] The public has the power to inspect the documents. Section 78(1)[12] mentions about certain documents which are generally available at the Head office of the Geographical Indications Registry. A copy of the registration certificate and related documents mentioned under section 78 of the act, as per Central Government inspection rules are to be present at the every branch office of the Geographic Indications Registry. The inspection by the public can be done on the payment of a certain fee on all working days of the Geographical Indications Registry as prescribed by the Registrar. Central government on occasions may direct the Registrar to distribute copies of journal and documents to encourage public review.   Need for registration under Geographical Indicaton of Goods (Registration and Protection) Act, 1999. Registration under the Geographical Indication of Goods (Registration and Protection) Act, 1999 ensures certain rights on the registered proprietors and authorised users. Following are some of the rights:[13] In case of infringement of Geographical Indication, the aggrieved party has the right to obtain relief. Exclusive right towards use of Geographical Indication in relation to goods in respect of which geographical indication is registered. In case of multiple authorised users for a registered geographic indication, the users have co – equal rights. Landmark Case Laws Imperial Tobacco Co. v. Registrar, Trademarks[14]: The Calcutta High Court in this case explicitly explained the term and the following concept of “geographic term”[15] as: “geographical terms and words used in common use designate a locality, a country, or section of country which cannot be monopolized as trademarks…… a geographic name according to it’s ordinary signification is mark inherently or alternatively incapable of registration subject to certain exceptions.” Tea Board, India v. I.T.C. Limited[16][17]: This case was filed before the Division Bench of the Calcutta High Court. In this case the Tea Board of India bearing the “geographic indication” – “Darjeeling” and the logo of a woman holding tea leaves was dealt with as the certification trademark “Darjeeling” under the Trade Marks Act, in connection with tea. The ITC Sonar Hotel in Kolkata named it’s executive lounge hotel as “Darjeeling Lounge”. The question raised was whether by virtue of certification trade mark, the plaintiff could restrain the defendant for infringement and passing off, in carrying out the business of hospitality services for naming one of it’s lounges in the hotel as “Darjeeling Lounge”, wherein the food and beverage items served to the customers are not necessarily restricted to products grown or evolved in the Darjeeling district. The Court in this judgment was of the opinion that the Tea Board’s prima facie failure in proving violation of its registered certification trademarks in relation to Section 75 of the Trademark Act[18] was because they did not register the name of the mark “Darjeeling” in respect to hotel business, instead registered it with the intention of  certification  of tea grown in Darjeeling wherein Sections 28 and Section 29 of the Trademark Act are unavailable. Conclusion Intellectual property rights nowadays are more controversial, political and economical. Patents, copyrights, trademarks, service marks, designs and geographic indications are few of the most discussed and debatable topics especially when relating to biotechnology, food security, trade, education, research and public health. Therefore, in this highly mechanised economy of today, understanding of IPR’s has almost become a matter of informed policy relating to matters of human development. Geographical indication therefore, is an emerging arena for intellectual property matters, which needs to be protected and safeguarded using necessitated legislations.   [1] [2] [3] “The Protection of Geographical Indication In India” – Dr. Sudhir Ravindran, Arya Mathews. [4] [5] [6] [7] Section 3 of the Geographical Indications of Goods (Registration and Protection) Act, 1999. [8],%201999.pdf [9] [10],%201999 [11] [12],%201999   [13] [14] AIR 1977 Cal 413 of 422 [15] [16] GA No. 3137 of 2010, CS No. 250 of 2010. [17] [18]

Posted By

Samriddha Gooptu

2 years ago

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