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2023 Supreme(Del) 3297

IN THE HIGH COURT OF DELHI AT NEW DELHI
Najmi Waziri, Vikas Mahajan, JJ.
Telefonaktiebolaget Lm Ericsson (publ) – Appellant
Versus
Competition Commission of India & Anr. – Respondents
LPA 247 of 2016, LPA 150 of 2020, LPA 550 of 2016, LPA 246 of 2016 & W.P.(C) 8379 of 2015
Decided On : 13-07-2023

Advocates appeared:
Mr. C.S. Vaidyanathan, Senior Advocate with Ms. Saya Choudhary Kapur, Mr. Ashutosh Kumar, Mr. Vivek Ranjan Tiwary, Mr. Vinod Chauhan, Ms. Vrinda Bagaria, Mr. Palash Maheshwari, Mr. Radhika Pareva, Mr. Munesh Sharma, Mr. Anand S. Pathak, Mr. Shashank Gautam, Ms. Sreemoyee Deb, Mr. Rajat Moudgil, Mr. Ravishekhar Nair, Mr. Sahil Khanna and Mr. Vinayak Goel, Advocates, for the Appellant in LPA 247/2016.
Mr Balbir Singh, ASG with Mr Avinash Sharma, Ms Monica Benjamin, Ms. Anu Sura, Ms. Akanksha Kapoor and Mr. Siddhant Choudhary, Advocates, for the CCI in LPA 247/2016, LPA 550/2016, LPA 246/2016 & W.P.(C) 8379/2015.
Mr. J. Sai Deepak and Mr. Avinash K. Sharma, Advocate, for the Respondent-2 (INTEX) in LPA 247/2016.
Dr. Abhishek Manu Singhvi, Mr. C.M. Lall and Mr. Raj Shekhar Rao, Senior Advocates with Mr. Adarsh Ramanujan, Ms. Bitika Sharma, Mr Aman Sethi, Mr. Lakshay Kaushik, Mr. Luv Virmani, Mr. H.S. Sandhu, Ms. Mansi Sood, Mr. Skanda Shekhar and Mr. Areeb Amanullah, Advocates, for the Petitioner in LPA 150/2020.
Mr. N. Venkatraman, ASG with Mr. Samar Bansal, Mr. Madhav Gupta and Mr. Vedant Kapur, Advocates, for the CCI in LPA 150/2020.
Mr. Ruchir Mishra and Mr. Mukesh Kr. Tiwari, Advocates, for the UOI in LPA 150/2020.
Mr. Neeraj Kishan Kaul, Senior Advocate with Ms. Saya Choudhary Kapur, Mr. Ashutosh Kumar, Mr. Vivek Ranjan Tiwary, Mr. Vinod Chauhan, Ms. Vrinda Bagaria, Mr. Palash Maheshwari, Mr. Radhika Pareva, Mr. Sajan Shankar Prasad, Mr. Munesh Sharma, Mr. Swarnil Dey, Mr. Shaurya Pandey, Mr. Anand S. Pathak, Mr. Shashank Gautam, Ms. Sreemoyee Deb, Mr. Rajat Moudgil, Mr. Ravishekhar Nair and Mr. Sahil Khanna, Advocates, for the Respondent in LPA 550/2016.
Mr. Sajan Poovayya, Senior Advocate with Ms. Saya Choudhary Kapur, Mr. Ashutosh Kumar, Mr. Vivek Ranjan Tiwary, Mr. Vinod Chauhan, Ms. Vrinda Bagaria, Mr. Palash Maheshwari, Mr. Radhika Pareva, Mr. Munesh Sharma, Mr. Anand S. Pathak, Mr. Shashank Gautam, Ms. Sreemoyee Deb, Mr. Rajat Moudgil, Mr. Ravishekhar Nair, Mr. Sahil Khanna, Ms. Raksha Agarwal and Mr. Abhishek Kakker, Advocates, for the Petitioner in LPA 246/2016 & W.P.(C) 8379/2015.

Headnote:(A) Patents Act, 1970 - Chapter XVI - Competition Act, 2002 - Sections 3 and 4 - Jurisdiction of CCI over patent rights - Court held that CCI cannot investigate a patentee's actions in exercise of patent rights as the Patents Act governs such matters entirely - The Patents Act is a complete code for dealing with issues of licensing and anti-competitive practices regarding patents, overriding the Competition Act - The 2016 and 2020 judgements were set aside affirming the authority of the Patents Act. (Paras 11, 56, 60, 64)

Facts of the case:
The appellant challenged the provisions allowing the CCI to investigate allegations of anti-competitive practices regarding patents they hold. They contended that such matters are exclusively governed under the Patents Act. The court had to examine the applicability of both the Patents Act and the Competition Act concerning patentee rights and alleged abuses of dominance.

Findings of Court:
The court found that Chapter XVI of the Patents Act is entirely self-contained regarding licensing issues and anti-competitive behavior by patentees, preventing the CCI from intervening in such matters.

Issues: The key issue was whether the CCI has jurisdiction under the Competition Act to investigate actions taken by a patentee under the Patents Act.

Ratio Decidendi: The court reasoned that the Patents Act, being enacted later and focusing specifically on patent rights, controls over the Competition Act concerning the exercise of patent rights and anti-competitive practices. The legislature did not intend for the Competition Act to overlap in matters already covered by the Patents Act.

Result: Appeals allowed, the 2016 and 2020 judgments were quashed, confirming the Patents Act as the governing law in cases involving patents.

JUDGMENT

Najmi Waziri, J. These are four appeals and a Writ Petition that, in their essence, raise a common question of far-reaching implications - when a patent is issued in India, and the patentee asserts such rights, can the Competition Commission of India ("CCI") inquire into the actions of such patentee in exercise of its powers under the Competition Act, 2002 ("Competition Act"). One of the Appeals - LPA/550/2016 is by the CCI itself.

WHAT THE PROCEEDINGS IMPUGN

2. LPA/246/2016 and LPA/247/2016 are by Telefonaktiebolaget LM Ericsson (Publ) ("Ericsson"). They both impugn a common judgement dated 30.3.2016 ("2016 Judgement") which dismissed two writ petitions1[WP(C) 464/2014 and WP(C) 1006/2014], filed by Ericsson, one against CCI and Micromax Informatics Limited ("Micromax"), and another against Intex Technologies (India) Limited ("Intex"). Micromax and Intex had inter alia complained that Ericsson was imposing conditions for licensing certain standard essential patents ("SEP") in the field of telecommunications that are not fair, reasonable or non-discriminatory, and thus in violation of sections 3 and/or 4 of the Competition Act. The 2016 judgement held that there is no legal bar in law to the CCI proceeding against Ericsson under the Competition Act for violation of sections 3 or 4 thereof, on the basis of information filed by Micromax and Intex respectively.

3. LPA/550/2016 by the CCI impugns the judgement dated 14.12.2015 ("2015 Judgement") in a writ petition2[WP(C) 5604/2015], filed by Ericsson against CCI and Best IT World (India) Private Limited ("iBall"). The 2015 judgement recorded that since there was a settlement arrived at between Ericsson and iBall, and iBall wishes to withdraw its information, and disposed off the Petition, quashing the proceedings initiated by CCI under 26(1) of the Competition Act, though not on merit. It reserved liberty to CCI to take action suo motu or on the basis of information received against Ericsson for abuse of dominant position, and revive investigation from the same stage, subject to any other objections' iBall had made similar contentions against Ericsson as did Micromax and Intex.

4. LPA/150/2020 is by ("Monsanto"). It impugns the judgement dated 20.05.2020 ("2020 Judgement") in WP(C) 1776/2016, which had been filed by Monsanto against CCI and various informants. The 2020 Judgement relied extensively on the 2016 judgement and dismissed the writ petition, holding that there is no bar in law to the CCI proceeding against Monsanto under the Competition Act for alleged violation of sections 3 or 4 thereof, on the basis of information filed by the informants. The contention of the informants against Monsanto was, as with that against Ericsson that Monsanto is charging excessive royalties and not making its patents available reasonably, which is a violation of sections 3 and/or 4 of the Competition Act.

5. WP(C) 8379/2015 is filed, again, by Ericsson against CCI. In this writ petition, Ericsson challenged letters dated 16.7.2015 and 14.8.2015 issued by the CCI, which letters Ericsson terms as "Notices/Summons". This was in continuation of action being taken by CCI on the information of Micromax as to Ericsson not being fair, reasonable and non-discriminatory in dealing with SEP, thus violation sections 3 and/or 4 of the Competition Act.

SUBMISSIONS MADE BY THE PARTIES

6. Extensive submissions have been made by the learned Additional Solicitors General, the Senior Advocates and various counsel appearing for the parties. The parties have filed their Written Submissions, and multiple compilations of authorities as well as Convenience Compilation.

7. The patentees, through their Senior Advocates Mr. C. S. Vaidyanathan, Dr. A. M. Singhvi, Mr. Neeraj Kishan Kaul and Mr. Sajan Poovayya and Mr. Ashutosh Kumar, Advocate contend that the 2016 Judgement and 2020 Judgement are unsustainable, since the CCI cannot exercise jurisdiction over matters pertaining to exercise of rights by paten



































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