Competition law and Patent law are at conflicting ends, but a positive relationship between the two can be derived if a balance is achieved.
The world has long debated and unarguably still continues to debate about the co-existence of the IP laws and the Competition laws that are prevalent together in every part of the world. The debate revolves around the issue whether one is detrimental to the effectiveness of the other or not. To gain a better understanding of this disputation and what possible amends can be made in order to strike a constructive balance, one needs to understand the two concepts individually.
Competition law is a law which basically stimulates and promotes the market competition in an economy by regulating the companies and industries which gain a monopoly in the market and are in a position to influence the market forces, other industries as well as consumers. Competition law, in a nutshell, aims to regulate the anti-competitive trade practices which are against the requisites of healthy competition.
The Competition law in India is fairly new and is exercised through the Competition Act, 2002 and is enforced by the Competition Commission which was constituted in March 2009.
Different countries are governed by different patent laws. The patent laws empower the inventors by providing them protection relating to both the processes and products that are invented.
When a product is produced, the patent safeguards the inventor by providing an undivided right which prevents other unauthorized competitors/ persons from making, using, selling or importing that product.
In the case of processes, the patentee receives a similar exclusive right to prohibit any unauthorized competitor/ person from using, selling or importing the process and the product that is produced by the process is also covered under the protection.
In India, the law governing patents is the Patents Act 1970, along with the Patent Rules 1972, which came into force on 20th April 1972.
RELATIONSHIP BETWEEN BOTH THE LAWS:
Both benefit consumers and foster economic growth:
Competition and patent law both promote public welfare and act as catalysts in the boosting of the economy.
Through the competition policy, more firms and companies come forward and compete against each other to provide the newest innovations and efficient technological/biotechnological processes that are more cost-efficient in terms of manufacturing them, that can enhance their profits and competitiveness in the market. This helps both the industries in the economy and the consumers who are provided with the technology of their satisfaction.
Also, through the patent policy, since the patentees are given protection for twenty years from the date of filing the patent application, more innovations are conceived which provide capital, among other incentives to the firms due to exclusivity and since novel information and technology is dispersed in the society, it benefits the consumers as well.
Thus, they act to promote the same cause.
Patents can hamper innovation which in turn hinders competitiveness:
In the case of questionable patents, competition may be obstructed in the areas where these patents have been awarded. For example, a questionable patent is such which contains claims that are extremely broad and include a lot of fields. So if a person patents an invention that comes in the ambit of the field in which patent has already been obtained, then it can block the patentee’s ability to exploit its own invention as it will end up infringing the property rights of the first patent i.e. the questionable one. Thus, this will dissuade competitors from making innovations where questionable patents are concerned.
Unreasonable patents can arouse dissatisfaction amongst firms:
Sometimes, patents are granted to those inventions that do not fulfil the paramount requisites on the basis of which patents are provided. Obvious and petty inventions, especially in the case of software technology are granted, which in turn cause vexation to the firms and vitiate the competitive mood.
Questionable patents complicate business planning:
Since questionable patents create an environment which are conducive to the creation of licensing difficulties, exorbitant royalties for the usage of the patented product and can create precariousness in the research and development area for firms, it complicates the business planning because firms need to now rack their brain on a whole new level to be able to create products which don’t infringe the property rights of other products that maybe so used in this process.
The various facets of the relationship between the two laws have been spread out above which show us how their intermingling creates complication, consensus and conflict at the same time. However, in the light of the need to strike a balance between the two, competition law should be promoted but not at the cost of limiting anybody’s avenue for receiving a patent.
At the same time, before granting questionable and invalid patents, patent application should be evaluated by third parties who have expertise in that field so as to grant patents only to very deserving inventions. At the same time, a legislation should be enacted that publishes all patent applications eighteen months after the filing of the patent so as to save the cost and energy of the competitor who can invest in designing a new product by being informed before-hand about the products that have been already invented. Furthermore, litigation should be fully-fledged open as a means to challenge and review patent claims.