The Core Paradox Rewarding Innovation vs. Protecting the Market Intellectual Property Rights Competition Law © Mechanism: Statutory Monopoly * Mechanism: Monopoly Regulation © Timing: Ex-Ante (Before market * Timing: Ex-Post (After market entry to incentivize R&D) entry to correct abuse) Primary Goal: Reward creators * Primary Goal: Maximize economic efficiency and consumer welfare, with temporary exclusive rights ‘to monetize their intellect. Nature: Restrictive by design. |The Global Baseline: TRIPS International mandates for policing anti-competitive IP practices ss es Zwrto omc Z wo omc Article 40 (Licensing Restraints) Article 31 (Compulsory Licensing) Recognizes that IP licensing practices Provides an exception to normal IP (exclusive grantbacks, coercive package exclusivity. Conditions like ‘seeking a licensing) can impede technology transfer. voluntary license first’ can be waived if an Grants member states the explicit right to administrative or judicial process determines regulate these abuses. a practice is strictly anti-competitive. Takeaway: The TRIPS Agreement ex; domestic antitrust enforcement againstJurisdictional Harmony in India Overriding powers and statutory coexistence (comers IP Statutes Indien Patents Act, 1970 & Copyright Act, 1957, Govars resistin Cd inant ie compuson lesnsing (eo. ste. pusecton 8a) re ses eee ede ce an eee ier aks solute jurisdiction to examine cases involving both competion laW and IPR if market power is abused. TaitThe Section 3(5) Reasonability Filter Distinguishing legitimate protection from market manipulation Raw IP Licensing Terms Exclusive grantbacks, tie-in arrangements, price-fixing, restrictive RED clauses. ‘The Mesh: Section 3(5) Exception ———>' Safe: Reasonable conditions necessary for protecting IP (€4. quality control, teritril limits).The Limits of Exclusivity: Section 4 When a legal monopoly becomes an illegal abuse Denial of Tying & Unfair/Predatory| Market Access. Bundling Pricing Sec 4(2)(c) Sec 4(2)(d) ‘Sec 4(2)(a) Refusing to license an IP Forcing a licensee or Imposing exorbitant, without justiiation, consumer to purchase a discriminatory royalties preventing the secondary, unpatented or excessive trait values emergence of new product to gain access that exploit a captive roduets for which there to the patented market is consumer demand, technology. Mere dominance through a patent is legal; the Ete Mer aeons TensBattleground: Telecommunications The SEP and FRAND Ecosystem (Ericsson Cases) Implementers implementers mplementers (Micromax, Intex, (Micromax, Intex, (Microma, Intex, iBall) ‘Bal ‘Bal The IP Concept ‘Standard Essential Patents (SEPs) have no noni fringing alternatives. You cannot build a 2G/3G/4G device without them. The Anti-Competitive Allegation Ericsson allegedly demanded discriminatory rates and ‘exorbitant royalties for its SEPs, acting as a "hold-up" The CCI Action ‘The CCI mandated that SEPs must be licensed on FRAND terms (Fai, Reasonable, and Non-Discriminatory) to prevent dominant players from halting industry innovation,Battleground: Agriculture & Life Sciences Sub-licensing and Trait Value (Monsanto) oo | The IP Claim The Anti-Competitive Allegation Mahyco Monsanto Biotech held the Sub-license agreements with seed proprietary Bt. cotton technology, ‘manufacturers contained stringent, essential for pest-resistant seeds in harsh termination conditions, India excessive “tat values,” and restricted scientific development. The CCI Verdict Meee) Erne a) ete Ocoee sae pene rsBattleground: The Automotive Aftermarket The failure of artificial IP shielding (Shamsher Kataria) The IP Claim ‘Auto Original Equipment Manufacturers (OEMs) restricted Original Equipment Suppliers (OESs) from selling spare parts directly to the open market, claiming proprietary rights and copyrights on ‘engineering drawings. The Anti-Competitive Allegation These agreements functioned asa “refusal to deal’, creating a ‘complete monopoly over secondary spare parts and driving up repair ‘costs for consumers. The CCI Verdict ‘The OEMs failed to prove the specific grant of IPRs in India. Crucially, the CCI ruled that selling a finished physical part in the open market does not inherently compromise the Underlying IP of the design. ‘The restriction failed the “reasonability" test.Battleground: Media & Entertainment Cartels vs. Legitimate IP Defense Unjustified Boycott Justified Precaution The FICCI / UPDF Case Scenario: A film distributors forum directed members to boycott releasing films to multiplexes over a revenue dispute. Verdict: Claiming ‘copyright’ over films does not grant an absolute right to form a cartel and boycott exhibitors. Section 3(5) provides no shield here. The K Sera Sera Case Scenario: Producers refused to supply a digital cinema provider (K Sera Sera) with movie content. Verdict: The refusal was based on documented prior incidents of piracy (DCP leaks) by the provider. The CCI ruled this a valid, precautionary step to. protect copyright, not an anti- competitive denial of access.Battleground: Trademarks & Aftermarkets Descriptive use is not infringement (Hawkins Cookers) Anatomy of a Ruling The IP Claim Hawkins attempted to stop third-party manufacturer Murugan Enterprises from using the word "Hawkins" on their "Mayur’ brand gasket packaging The Anti-Competitive Allegation Hawkins was using trademark litigation to create a monopoly over the spare parts aftermarket, blocking independent manufacturers. The Judicial Verdict (Delhi High Court) Using a trademark solely to indicate compatibility (descriptive use) does not constitute infringement. Big brands cannot weaponize IP to monopolize ancillary markets. Consumer choice in the aftermarket must be protected.M&A Dynamics: The Risk of Gun Jumping The cost of premature consummation The Concept “Gun Jumping” occurs when parties to a combination (mergerlacauisition) consummate the transaction before obtaining CCI clearance, violating standstill obligations. Friction Timeline The Statutory Risk (Sections 43A, 44, 45) ~ Fines up to 1% of the total turnover or assets of the combination for failure to notify. ~ Upto INR Crore fine for omitting material facts or destroying documents. Enforcement Reality: The CCI actively monitors media for Lunnotified deals. (e.g,, Penaities levied on Alcargo Logistics and Investcorp India for acquiring assets without notification).M@&A Dynamics: The Green Channel Automatic approval for non-overlapping combinations Standard Route: Regulatory fiction and waiting periods of up to 210 days, cs | ff es || ee || The Green Channel: Introduced in 2019 (Regulation 5A), allows immediate consummation of a transaction upon ( days) meee Eligibility Criteria ‘The merging parties must have absolutely NO business overlaps: = No Horizontal overlap (competitors) = No Vertical overlap (supply chain). = No Complementary overiap. Market Impact Highly successful mechanism. Currently, 25% of all combination notices in India are filed under the Green Channel, accelerating structural market growth,The Safety Valves Compulsory Licensing and Parallel Importation Compulsory Licensing, (Sec. 84, Patents Act) If an IP holder fail to satisfy public ‘demand, prices goods out of reach, ‘or refuses to work the patent in India, the state can force licensing Precedent: Bayer v. Natco. The patent office forced a license for a life saving ‘cancer drug, dropping the cost from INR 2.8 Lakh to INR 9,000 per month. Legally importing genuine products ‘sold elsewhere without the local IP ‘owner's consent to prevent artificial ‘geographical price-gouging. Under the Trade Marks Act (Sec 30(4), ‘owners can block this if the goods have been materially altered, maintaining SSThe Reasonability Imperative Strategic synthesis for IP compliance in India FRAND is Mandatory for SEPs Monitor M&A Overlaps. Prove the Grant ‘Audit for Necessity Mandatory for SEPs Monitor M&A Overlaps. ‘You canaot claim the Section 2(5) Licensing restictions must be If your technology isan industry _ When acquiing IP portfolios, ‘exception without documented ‘tity tailored to prevent ‘standare, weaponizing observe standstl obigations to ‘roof that the specific patent, infringement. Expansive clauses _ injunctions or demanding avoid gun-jumping, Utiize the trademark, or copyright s validly _(e-ins, total aftermarket contro). —_ demanding discriminatory Green Channel only if portfolios ‘granted and active In Indl "willbe stuck down. royalties wil tigger Abuse of have zero hotizontal or vertical ‘Dominance investigations. intersection.