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
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
An order under Section 26(1) of the Competition Act is administrative, only initiating an investigation without affecting parties' rights.
Section 19(1) of the Act would show that the Act originally provided for the “receipt of a complaint” from any person, consumer or their association, or trade association.
The Competition Commission of India must establish a prima facie case before ordering an investigation; failure to do so renders its orders void.
The judgment establishes that the CCI must have a principled prima facie basis to initiate an investigation under the Competition Act, failing which such directives lack jurisdiction and can be quash....
Abuse of dominant position--In judicial review appellants would be held to standard of fairness as also duty not to discriminate--Appellants cannot resist imposition of standards of fairness and duty....
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