Playing the Balancing Game

In order to attract foreign investment and encourage technology transfer, the government needs to take both consumers’ and private sector’s interests into account. There is no doubt that a balance is needed such that exclusive rights are protected but at the same time, this ‘should not’ lead to abuse of dominant position by the rights’ holder.

- Ranjan Narula

In the context of FRAND licensing in the telecom sector and payment of royalty fees for genetically modified Bt cotton seeds, the debate over India’s policy in encouraging innovation has sharpened. The overlap between competition law and IP laws in the context of balancing the commercial interest of IP holder and public interest has made the debate acrimonious and to an extent contrary to the purpose of Intellectual Property (IP). It is commonly understood that IP by its nature is inherently pro-competitive as it ensures protection of differentiated, intangible business assets. In that context it encourages competition by promoting innovation.

In other words, the objective of both competition law and the IPR law is common that is to promote innovation, consumer welfare and in fact offer more product choices, though the medium adopted by both these laws may intersect with each other at some point while achieving the ‘same’ objectives. The intersection of IPRs and the competition law is amongst one of the complex areas of law and economics. Whereas from an industry perspective, public benefit from research and development (R&D) of innovative products, consumers in any country would generally not consider IP protection beneficial as long as high prices reduce actual availability of the innovative products.

Patents and Competition Law