CCI can entertain patent rights abuse complaints: HC

The Court found no 'irreconcilable conflict' between the Competition Act and the Patents Act

The Competition Commission of India (CCI) can entertain complaints regarding abuse of dominance of patent rights as there is no "irreconcilable conflict" between the Competition Act and the Patents Act, the Delhi High Court has said.

It said this while dismissing the petitions filed by Telefonaktiebolaget Lm Ericsson against the CCI's orders directing its Director General (DG) to investigate the matter regarding alleged violation of provisions of Competition Act.

CCI had passed orders on November 12, 2013 and January 16, 2014 respectively pursuant to complaints filed by Micromax Informatics Ltd and Intex Technologies (India) Ltd in which they both had alleged that Ericsson has abused its position of dominance.

"In my view, there is no irreconcilable repugnancy or conflict between the Competition Act and the Patents Act. And, in absence of any irreconcilable conflict between the two legislations, the jurisdiction of CCI to entertain complaints for abuse of dominance in respect of patent rights cannot be ousted," Justice Vibhu Bakhru said in his 161-page judgment.

Referring to the facts and circumstances of the matter, the bench also said it is difficult to form an opinion that conduct of Ericsson "indicates any abuse of dominance" as the Swedish firm appeared to have made efforts to arrive at a negotiated settlement with Micromax and Intex.

The court observed that it appeared that Micromax and Intex were using the patented technologies of Ericsson without either obtaining a license from it or approaching Controller of Patents for a compulsory license.

In their complaints before the CCI, Micromax and Intex had alleged that Ericsson has abused its dominant position as it has a large portfolio of Standard Essential Patents (SEPs) in technologies that are used in mobile handsets and network stations.

The court, in its verdict, noted that the dispute between Ericsson and Micromax and Intex relates to Ericsson's demand for royalty in respect of SEPs held by it.

Ericsson had claimed that both Micromax and Intex have infringed its SEPs and CCI's orders were without jurisdiction as any issue regarding claim for royalty would fall within the scope of the Patents Act and it cannot be a subject matter of examination under the Competition Act.
While dismissing the pleas, the court said, "Further,

merely because certain reliefs sought by Micromax and Intex before CCI are also available in proceedings under the Patents Act do not exclude the subject matter of the complaints from the scope of the Competition Act."

The court also dealt with the issue raised by Ericsson regarding breach of confidentiality in relation to the secret information provided to the CCI.

"Before concluding, it is also necessary to note that Ericsson had also filed complaints relating to the high-handed and officious manner in which investigations were being conducted. Ericsson had also expressed its apprehension as to a breach of confidentiality in relation to the confidential information provided to the CCI.

"In this regard, it must be observed that the CCI, DG and employees of the CCI are obliged to maintain confidentiality and secrecy of the confidential information provided by Ericsson and must take adequate measures to maintain the same," the bench said.

The court clarified that in case there was any negligence, "the CCI/DG may not be immune from a claim of loss or damages if they fail to maintain confidentiality/secrecy of the sensitive information provided to them.