TaxTMI 
TaxTMI 
2016 (3) TMI 1485
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....ree Narain and Ms Anahita Varma, Advocates. JUDGMENT VIBHU BAKHRU, J 1. These petitions have been filed by Telefonaktiebolaget LM Ericsson (Publ), a company incorporated under the Laws of Sweden (hereafter also referred to as 'Ericsson'), inter alia, impugning orders dated 12th November, 2013 and 16th January, 2014 (hereafter referred to as the 'impugned order' or 'impugned orders') passed by the Competition Commission of India (hereafter 'CCI') under Section 26(1) of the Competition Act, 2002 (hereafter referred to as 'the Competition Act'). The impugned order dated 12th November, 2013 was passed pursuant to an information filed by Micromax Informatics Ltd. (hereafter 'Micromax') under Section 19(1)(a) of the Competition Act and the same is the subject matter of W.P.(C) No. 464/2014 (hereafter also referred to as the 'Micromax Petition') and the impugned order dated 16th January, 2014 was passed pursuant to an information filed by Intex Technologies (India) Ltd. (hereafter 'Intex') and is the subject matter of W.P. (C) No. 1006 of 2014 (hereafter also referred to as the 'Intex Petition'). 2. The controversy raised in these petitions are similar and, therefore, thes....
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....n supplied manual switch boards to the Government of India. It is claimed that Ericsson has a significant presence in India with around 20,000 employees across 25 offices located in various parts of the country. 6. Micromax is an Indian company and its registered office is situated in Gurgaon, Haryana. Micromax claims that it is the 12th largest mobile handset manufacturer in the world and is focused on providing innovative products catering to the needs of the Indian consumers. Micromax states that it has a product portfolio of more than 60 models of mobile phones. 7. Intex is a company incorporated under the Companies Act, 1956 and has its registered office in New Delhi. It has a pan-India presence and its product portfolio consists of over 250 items from 29 product groups including Mobile Phones, Multimedia Speakers, Desktops LED/LCD TVs CRT, DVD players, Computer UPS, Cabinets and Headphones. Intex claims that it offers products with innovative and high-end specifications at affordable prices. Intex claims that it has a Centre for market research and related design and development in Delhi, which is well-equipped and is manned by highly qualified personnel. The said centr....
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....AL IPR relating to a particular STANDARD or TECHNICAL SPECIFICATION is brought to the attention of ETSI, the Director-General of ETSI shall immediately request the owner to give within three months an irrevocable undertaking in writing that it is prepared to grant irrevocable licences on fair, reasonable and non-discriminatory ("FRAND") terms and conditions under such IPR to at least the following extent: • MANUFACTURE, including the right to make or have made customized components and sub-systems to the licensee's own design for use in MANUFACTURE; • sell, lease, or otherwise dispose of EQUIPMENT so MANUFACTURED; • repair, use, or operate EQUIPMENT; and • use METHODS. The above undertaking may be made subject to the condition that those who seek licences agree to reciprocate." Admittedly, Ericsson is bound by the aforesaid policy and in terms thereof, has undertaken to offer its SEPs on Fair, Reasonable And Non- Discriminatory (FRAND) Terms. The disputes between the parties relate to the patents concerning the technologies pertaining to 2G and 3G devices that are claimed by Ericsson to be SEP's for which Ericsson ....
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....5. Consequently, on 4th March, 2013, Ericsson filed a patent infringement suit being CS(OS) No. 442/2013 in this Court. Ericsson has alleged that eight of the SEPs held by it, which related to the three technologies pertaining to 2G and 3G devices were infringed by Micromax. The three technologies are briefly described as under:- A. Adaptive Multi-Rate (AMR) speech codec - a feature that conserves use of bandwidth and enhances speech quality; (AMR) B. Feature in 3G phones-Multi service handling by a Single Mobile Station & A mobile ratio for use in a mobile radio communication system: (3G) C. Enhanced Data Rates for GSM Evolution (EDGE) - A transceiving unit for block automatic retransmission request; (EDGE) The eight patents claimed to be infringed by Ericsson are as under:- AMR PATENTS IN203034 : Linear Predictive Analysis by synthesis encoding method and encoder. IN203036 : Apparatus for producing from an original speech signal a plurality of parameters. IN234157 : A method of encoding/decoding multi- codebook fixed bitrate CELP signal block. IN203686 : Method and system for alternating transmission of codec mode inf....
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.... representative or its counsel will, without any delay and within twenty-four hours, take inspection of the consignment. 3. Micromax shall then, pending final determination of royalties payable by the parties, agree to abide by the following interim payments as per term sheet enclosed with letter dated 05th November, 2012, purely as an ad-interim arrangement and subject to the final outcome of its negotiations with Ericsson. A. For phones/devices capable of GSM - 1.25% of sale price. B. For phones/devices capable of GPRS + GSM - 1.75% of sale price. C. For phones/devices capable of EDGE + GPRS + GSM - 2% of sale price. D. WCDMA/HSPA phones/devices, calling tablets - 2% of the sale price. E. Dongles, data cards - USD 2.50. Micromax undertakes to make a deposit of interim payments in Court, as set out above, within five working days of the intimation by Customs of the arrival of the consignment. Post inspection, Ericsson will forthwith inform the Customs that it has no objection to the release of the consignment so that the consignment could immediately be handed over to Micromax. Both the parties agree that the ....
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....es capable of EDGE + GPRS + GSM 1.3% of net selling price; iv. WCDMA/ HSPA phones/devices, calling tablets - 1.3% of the net selling price." 12.13. A perusal of the abovementioned order indicates that Ericsson had produced twenty-six licence agreements which were perused by the Court and the royalty rates were fixed after perusing the said agreements and after hearing the parties. The Court had, however, clarified that the arrangement was an interim arrangement and was not a determination of the FRAND rates. 12.14. The learned counsel for Micromax informed this court that Micromax had sought a modification of the aforesaid order dated 12th November, 2014, which was not accepted and Micromax's application (IA No. 10933/2015) was disposed of by an order dated 7th July, 2105. Micromax has appealed against the said order before a Division Bench of this Court (FAO No. 555/2105) which is stated to be pending. 12.15. On 7th July, 2015, the following issues were framed in CS(OS) No. 442 of 2013: "1. Whether the plaintiff is the registered proprietor of the suit patents being IN203034, IN203036, IN234157, IN203686, IN213723, IN229632, IN240471 and In241747? OPP ....
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....he laws of Singapore and subject to the jurisdiction in that country. 13.3. On 26th March, 2013, Intex expressed its willingness to obtain a licence from Ericsson and sought commercial terms for the same. However, Ericsson expressed its inability to provide the same till an NDA was executed between the parties. Finally, an NDA was executed between Ericsson and Intex on 12th April, 2013. 13.4. Ericsson provided its commercial terms for a PLA to Intex on 23rd April, 2013 and the same were discussed between the parties at a meeting held on 23rd May, 2103, wherein Ericsson agreed to provide the revised terms. These were provided by Ericsson to Intex on 30th May, 2013. Intex made a counter-offer on 19th June, 2013, which, according to Ericsson was unfeasible. 13.5. On 23rd August, 2014, Intex filed revocation proceedings in respect of five SEPs held by Ericsson before the Intellectual Property Appellate Board (IPAB). Ericsson claims that this was not communicated to it and it continued to make efforts to resolve the impasse. 13.6. It appears that the negotiations between Ericsson and Intex continued thereafter. Admittedly, the licence offered by Ericsson to Intex included it....
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....to mobile phones in India to the prejudice of the Indian consumers by seeking excessive royalties for its technology. Micromax asserted that as a consequence of Ericsson's demand for excessive royalties, the Indian handset manufacturers were denied market access in respect of the GSM market. 18. Micromax referred to various notices issued by Ericsson in support of its claim that the conduct of Ericsson was threatening and inflexible. In particular, Micromax referred to a notice dated 29th June, 2011 whereby Ericsson had threatened to file an intimation with Securities Exchange Board of India (SEBI) in the context of Micromax's IPO (Initial Public Offer). Micromax also referred to Ericsson's notice dated 5th November, 2012, whereby, Micromax was called upon to sign the licence agreement based on the attached term sheets failing which Ericsson had threatened to pursue other available options. Intex's Information under Section 19(1)(a) before the CCI 19. Intex also filed information under Section 19(1)(a) of the Competition Act, inter alia, alleging that Ericsson and its subsidiary in India, Ericsson India Pvt. Ltd., had abused its dominant position. The specific allegations ....
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....ng to 2G and 3G technologies without giving any choice to Intex to acquire the rights in respect of only some of the specific patents. This, according to Intex would amount to a practice of bundling and tying, which is proscribed under the Competition Act. 19.10. That the conduct of Ericsson was opaque and non-transparent and, in effect, sought to impose unfair and discriminatory terms/prices and restrict the provisions of goods and services. The impugned orders dated 12th November, 2013 in Case No.50/2013 and 16th January, 2014 in Case No. 76/2013 20. The CCI passed the impugned order dated 12th November, 2013 under Section 26(1) of the Competition Act pursuant to an information filed by Micromax. The CCI took note of the fact that Ericsson was a member of ETSI and held several SEPs which were recognized as standard by ETSI. The CCI also noted that as per clause 6 of ETSI IPR policy, the IPR holder/owner is required to give an irrevocable written undertaking that it would grant irrevocable licence on FRAND Terms to be applied fairly and uniformly to similarly placed parties. The CCI noted that Ericsson had declared that it had standard patents in respect of 2G, 3G and EDG....
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....d contains comprehensive provisions for addressing all the matters including protecting the interest of consumers and general public, the Competition Act has been enacted as a general law to promote and sustain competition in the market and to prevent practices having an adverse effect on competition. He referred to various provisions of the Patents Act - in particular Sections 83-90, 92 & 92A - to emphasize that the Patents Act contains provisions to adequately redress the grievances of any person in respect of non-availability of rights to use a patent on reasonable terms. He contended that the Controller General of Patents, Designs and Trade Marks (hereafter 'Controller' or 'Controller of Patents') and/or a Civil Court were vested with the function and the power to remedy any grievance relating to a patentee's demand for excessive or unreasonable royalty by grant of compulsory licence and the CCI, on the other hand, had no jurisdiction to grant such relief. He argued that the Patents Act being a special act also occupied the field in relation to anti- competitive practices by a patentee in relation to patents and, thus, the same would be outside the scope of the Competition Act.....
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....ied that CCI would have no jurisdiction to determine those issues as by virtue of Section 61 of the Competition Act, the jurisdiction of Civil Courts was ousted in respect of matters falling within the domain of CCI under the Competition Act. 28. He next submitted that Ericsson had already filed a suit for enforcement of its rights and referred to the interim orders passed in the suit by this court for payment of royalty. He also referred to the issues framed by the High Court in Civil Suit No. 442/2013 and the interim orders passed therein, which clearly indicated that the Court was in seisen of the dispute regarding fixing of licence fee and, therefore, any grievance in respect of the rates of royalty or terms of licence was squarely covered under the proceedings before the High Court. He submitted that in the circumstances, CCI would have no jurisdiction to entertain any proceedings in regard to the very same issues that were under consideration of this Court. He further submitted that the exercise of rights by Ericsson under the Patents Act could by no stretch be considered an abuse of dominance so as to warrant any investigation under the Competition Act. 29. Mr T.R. And....
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....to exercise of rights under the Patents Act which conferred a monopoly to a patentee for exploitation of the patented technology and prevented competition for a limited period of 20 years. 31. He referred to the decision of the Supreme Court in General Manager Telecom v. M. Krishnan & Anr.: JT (2009) 11 SC 690 and Chairman, Thiruvalluvar Transport Corporation v. Consumer Protection Council : (1995) 2 SCC 479 in support of his contention that the Patents Act was a specific law and a complainant could not resort to provisions of the Competition Act for any alleged abuse of dominant position by a patentee. 32. Mr T.R. Andhyarujina referred to Section 60 of the Competition Act which provided that the Act would apply notwithstanding anything inconsistent contained in any other law. On the strength of the aforesaid Section, he submitted that since the Competition Act did not provide for grant of a compulsory licence or for determination of a royalty, there was no inconsistency between the Competition Act and the Patents Act. He referred to the decision of the Supreme Court in Basti Sugar Mills Co. Ltd. v. State of U.P. & Anr.: AIR (1979) SC 262 in support of his contention that 'in....
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....e Constitution of India as the said orders did not amount to a final expression of opinion on merit. He drew the attention of this Court to paragraph 19 and 20 of the impugned order dated 16th January, 2014 which expressly recorded the above and further directed the DG to conduct the investigation uninfluenced by any observations made in the impugned orders. He strongly relied on the decision of the Supreme Court in Competition Commission of India v. Steel Authority of India Ltd. & Anr.: (2010) 10 SCC 744 in support of his contention. In particular, he drew the attention of this Court to paragraph 37 & 38 of the said decision wherein the Supreme Court had held an order under Section 26(1) of the Competition Act to be an administrative direction akin to an inter- departmental communication which did not involve entering into an adjudicatory process. The Supreme Court had also observed that an order under Section 26(1) of the Competition Act did not entail any civil consequences in light of the strict confidentiality required to be maintained by CCI in terms of Section 57 of the Competition Act and Regulation 35 of the Competition Commission of India (General) Regulations, 2009. 3....
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.... referred to the decision of the Supreme Court in M/s Fair Air Engineers Pvt. Ltd. v. N.K. Modi : (1996) 6 SCC 385 wherein the Supreme Court had interpreted the provision similar to Section 62 of the Competition Act in the context of the Consumer Protection Act, 1986 and held that recourse to the provisions of the said Act were available even though an arbitration agreement existed between the parties thereto. 39. Mr Haksar further submitted that there was no conflict between the Competition Act and the Patents Act as both the said legislations were independent in their respective spheres. He referred to the decision of the Supreme Court in Gujarat Urja Vikash Nigam Ltd v. Essar Power Ltd: (2008) 4 SCC 755 in support of its contention that both, the Competition Act as well as the Patents Act must be interpreted harmoniously and it is only in cases where there is irreconcilable inconsistency that the question of which act or provision had an overriding effect would have to be considered. 40. Mr Haksar controverted the submission advanced on behalf of Ericsson that it was not an enterprise within the meaning of Section 2(h) of the Competition Act. He submitted that the said def....
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....sed or housed the relevant SEP. It is contended that the aforesaid allegations prima facie disclosed violation of Section 4 of the Competition Act and, therefore, fell within the exclusive jurisdiction of CCI. 43. Mr Kathpalia also countered the submissions made on behalf of Ericsson that the Patents Act was a special act and the Competition Act was a general enactment and, therefore, the provisions of the Patents Act would prevail in case of any repugnancy between the two enactments. He submitted that this contention was erroneous as (a) Section 60 of the Competition Act expressly stated that the Act would have effect notwithstanding anything inconsistent therewith in other laws; (b) there was nothing in the Patents Act which would either impliedly or expressly oust the jurisdiction of CCI; (c) the Competition Act was a later enactment; and (d) the scope and substance of the Competition Act and the Patents Act was different. He then referred to the decision of the Supreme Court in Union of India v. G.M. Kokil: AIR 1984 SC 1022 in support of his contention that a non-obstante clause was a well recognized device for giving the overriding effect to certain legislative provisions. ....
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....had failed to consider the aforesaid issue while passing the order under Section 26(1) of the Competition Act. According to him, the expression 'any activity' as used in Section 2(h) of the Competition Act would not include negotiation of patent licences and, therefore, Ericsson could not be considered as an enterprise for the purposes of Section 4 of the Competition Act. He further submitted that the impugned orders also did not indicate whether Micromax and/or Intex could be considered as consumers within the meaning of Section 2(f) of the Competition Act and; apparently, CCI had also failed to consider the same. 50. Mr Narain further submitted that in the present case, CCI had issued notice to Ericsson and had further taken the written submissions of Ericsson on record. However, CCI had failed to address the issue as to its jurisdiction; thus rendering the permission granted to Ericsson to intervene and file written submissions illusory. He contended that it was necessary for the CCI to have considered the challenge laid by Ericsson to its jurisdiction while passing the impugned orders. Submissions made on behalf of Ericsson in Rejoinder 51. In rejoinder, Mr C.S. Vaidya....
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....to directing investigation against Ericsson. 53. Ms Singh also sought to dispute Mr Kathpalia's interpretation of proviso of clause (iv) to Section 86 of the Patents Act. She submitted that a bare reading of the said proviso would indicate that the Controller of Patents would have the power to award a compulsory licence in case where the patentee had indulged in an anti-competitive practice without insisting on the condition of the applicant making reasonable attempts to obtain a licence from the patentee. Ms Singh thereafter listed out various alleged acts, which were alleged as an abuse of Ericsson's dominant position and reiterated that the remedies for the same were available under the Patents Act. 54. Ms Singh, emphatically, reiterated her contention that none of the allegations made by Micromax/Intex could remotely be considered as abuse of dominance as Ericsson was only exercising its statutory rights. She urged that filing suits/or warning of legal action against infringement could not be construed as abuse of dominance. 55. Insofar as the contention that the Controller of Patents did not have the power to grant a compulsory licence prior to the expiry for a period....
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....n that a direction passed under Section 26(1) of the Competition Act is outside the scope of judicial scrutiny under Article 226 of the Constitution of India. 59. CCI is a body established under Section 7 of the Competition Act and performs the functions as mandated under Chapter IV of the Competition Act. CCI being a creature of the statute has to perform its functions and exercise its powers within the confines of the statute. Clearly, any function performed or any order or direction passed by CCI must be in accordance with the provisions of the Competition Act. It also follows that any direction or order issued by CCI that is not in accordance with the provisions of the Competition Act or is outside the scope of its function and authority as specifically enacted, would be unsustainable. 60. I have reservations as to merits of the contention that a direction under Section 26(1) of the Competition Act to conduct an investigation does not prejudice the party being investigated in any manner, as it does not amount to a final determination of the allegations made. Indisputably, a direction to conduct an investigation may not involve an adjudicatory process and does not foreclos....
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....sonably able to give. By virtue of Sub-section (1B) of Section 240 of the Companies Act, 1956, the Inspector also has the power to retain any book and paper produced for a period of six months. 63. Section 240A empowers an Inspector to apply for an order of seizure of books and papers relating to a company or managing director or manager of such company which he has reasonable grounds to believe would be destroyed, mutated, altered falsified or secreted. Inspector has the power to retain the books and papers seized till the conclusion of the investigation. It is also relevant to refer to Section 2(8) of the Companies Act, 1956 which provides an expansive definition for the expression 'book and paper' or 'book or paper'. In terms of the said definition 'book or paper' includes "acts, deeds, voucher, writings and documents". Thus, the DG or any person acting under his authority would have an unmitigated access to any document available with the enterprise being investigated. Obviously, such documents may also include confidential and sensitive information and even though the DG may keep the same as confidential, it can hardly be disputed that an enterprise furnishing sensi....
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....grievance in that regard. 67. A Division Bench of this Court in the case of Google Inc. & Ors. v. Competition Commission of India & Anr.: 2015 (150) DRJ 192 had also examined the sweeping powers of DG under the Competition Act and concluded that the investigation by a DG ordered by CCI stand on a different pedestal from a show cause notice or from an investigation/enquiry conducted pursuant to an FIR. 68. In the aforesaid view, it is next to be examined as to whether the impugned orders passed under Section 26(1) of the Competition Act can be subjected to judicial review under Article 226 of the Constitution of India. Indisputably, scope of Article 226 of the Constitution of India is very wide. 69. In Dwarka Nath v. Income Tax Officer: 1965 57 ITR 349 (SC) had explained the scope of Article 226 of the Constitution of India as under:- "This article is couched in comprehensive phraseology and it ex-facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the nature of the power, the purpose for which and the person or authority against whom it can be exercised. It can issue ....
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....ts have evolved certain self-constraints over the years. The Court further observed that:- "21. While this is not the place to delve into or detail the self-constraints to be observed by the Courts while exercising the jurisdiction under Article 226, one of them, which is relevant herein, is beyond dispute viz., while acting under Article 226, the High Court does not sit and/or act as an Appellate Authority over the orders/actions of the Subordinate Authorities/Tribunals. Its' jurisdiction is supervisory in nature. One of the main objectives of this jurisdiction is to keep the government and several other authorities and Tribunals within the bounds of their respective jurisdiction. The High Court must ensure that while performing this function it does not overstep the well- recognized bounds of its own jurisdiction." 73. In State of Tamilnadu v. State of Karnataka: 1991 Supplement 1 SCC 240, the Supreme Court was called upon to consider controversy whether in view of Section 11 of the Interstate Water Disputes Act, 1956, it had the jurisdiction to entertain an appeal against an order passed by the Cauvery Water Dispute Tribunal constituted under that Act. Section 11....
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....y CCI only if it is of the opinion that there exists a prima facie case. Formation of such opinion is sine qua non for exercise of any jurisdiction under Section 26(1) of the Competition Act. Thus, in cases where the commission has not formed such an opinion or the opinion so formed is ex- facie perverse in the sense that no reasonable person could possibly form such an opinion on the basis of the allegations made, any directions issued under Section 26(1) of the Competition Act would be without jurisdiction and would be liable to be set aside. 79. Any direction under Section 26(1) of the Competition Act could also be challenged on the ground - as is sought to be contended in the present case - that the subject matter is outside the pail of the Competition Act. However, it must be added that a challenge to the jurisdiction of the CCI to pass such directions under Section 26(1) of the Competition Act must be examined on a demurrer; that is, the information received under Section 19 must be considered as correct; any dispute as to the correctness or the merits of the allegations - unless the falsity of the allegations is writ large and ex facie apparent from the record - cannot be....
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....ar Pradesh v. Mohammad Nooh: AIR 1958 SC 86, the Supreme Court referred to various authorities and held that: "If an inferior court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior court's sense of fair play the superior court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance, even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to it, it confirmed what ex facie was a nullity for reasons aforementioned." 82. In view of the aforesaid, the fact that Ericsson had an alternative remedy, albeit at a later stage, would not in any manner disable this court from entertaining the present petition. 83. In view of the above, the contention that the present petition is not maintainable, is without merit. However, the validity of the impugned orders can be examined only from the persp....
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....der the following broad heads: (i) Ericsson is not an enterprise within the meaning of Section 2(h) of the Competition Act and, therefore, Section 4 of the Competition Act is wholly inapplicable in any matter relating to its exercise of its rights as a proprietor of its SEPs. (ii) The Patents Act is a special Act vis-à-vis the Competition Act and therefore it shall prevail over the provisions of the Competition Act; consequently, insofar as exercise of patent rights are concerned, proceedings under the Competition Act would not be competent and outside the scope of that Act. (iii) The allegations made by Micromax and Intex in their complaints cannot by any stretch constitute abuse of dominance under the Competition Act and, therefore, impugned orders passed by CCI are without jurisdiction. (iv) The disputes between parties - alleged demand for excessive royalty, breach of FRAND assurances, imposition of unreasonable terms for licencing etc. - are subject matter of proceedings in the suits filed by Ericsson and, therefore, outside the scope of the Competition Act. (v) The complaints made by Micromax and Intex are not maintainable a....
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.... of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to (i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favour;" It, plainly, follows that alleged abuse of dominance would have to be considered in the context of the relevant market in which an enterprise is found to be in a dominant position. The alleged acts or activities which constitute abuse, will not be dispositive of the issue whether a person is an 'enterprise' or not. That question would depend entirely on whether the person or entity falls within the scope of Section 2(h) of the Competition Act, which defines the expression 'enterprise' and reads as under:- "2(h) "enterprise" means a person or a department of the Government, who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of an....
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....goods' as defined in the Sale of Goods Act, 1930. Sub-section 7 of Section 2 of the Sale of Goods Act, 1930 defines 'goods' as under:- "(7) "goods" means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;" 95. As is apparent from the above, the definition of goods is extremely wide and takes within its fold every kind of movable property. The word 'property' is defined by virtue of Section 2(11) of the Sale of Goods Act to mean "the general property in goods, and not merely a special property;". 96. The expression 'movable property' has not been defined under the Sale of Goods Act, 1930. Thus, in absence of such definition, one would have to turn to the General Clauses Act, 1897 which defines 'movable property' to mean "property of every description, except immovable property". Section 3(26) of the General Clauses Act, 1897 defines 'immovable property' to "include land, benefits to arise out of land, and things attached to the ea....
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....y. Adam Mossoff, Associate Professor of Law at George Mason University, School of Law, in an article captioned "Exclusion and Exclusive Use in Patent Law" published in Harvard Journal of Law & Technology Volume 22, Number 2 Spring 2009 states the above in the following words:- "In other words, patents are conceptually differentiated from land, not due to any supposed categorical imperative about the alleged uniqueness of propertized inventions, but because of seemingly important doctrinal differences between the enforcement of tangible and intangible property entitlements." 101. In Vikas Sales Corporation v. Commissioner of Commercial Taxes: (1996) 4 SCC 433, the Supreme Court while considering the issue whether import licences (replenishment licences/export-import licences) issued under the relevant export policy would be goods under the Sales Tax enactments of the States of Tamil Nadu, Karnataka and Kerala noticed that whereas the definition of 'goods' under the Sale of Goods Act, 1930, used the expression "every kinds of movable property", the definition of 'goods' under the Tamil Nadu General Sales Tax Act, 1956, the Karnataka Sales Tax Act, 1957 and....
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....tate. It extends to every species of valuable right and interest, and includes real and personal property, easements, franchises, and incorporeal hereditaments, and includes every invasion of one's property rights by actionable wrong. Labberton v. General Cas. Co. of America, 53 Wash 2d 180, 332 P 2d 250, 252, 254. Property embraces everything which is or may be the subject of ownership, whether a legal ownership, or whether beneficial, or a private ownership. Davis v. Davis, Tax Civ. App. 495 S W 2d 607, 611. Term includes not only ownership and possession but also the right of use and enjoyment of lawful purposes. Hoffmann v. Kinealy, Mo, 389 S W 2d 745, 752. Property, within constitutional protection, denotes group of rights inhering in citizen's relation to physical thing, as right to possess, use and dispose of it. Cereghino v. State by and Through State Highway Commission, 230 Or., 439 370 P 2d 694, 697. Goodwill is property, Howell v. Bowden, Tex Civ App, 368 S W 2d 842, 848; as is an insurance policy and rights incident thereto, including a right to the proceeds, Harris v. Harris, 83 N M 441, 493 P 2d 407, 408." The Dictionary fur....
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....nd rights in personam capable of transfer or transmission such as debts. Property is of two kinds, real property (q.v.) and personal property (q.v.). Property in reality is acquired by entry, conveyance, or devise; and in personality, by many ways, but most usually by gift, bequest, or sale. Under the Law of Property Act, 1925, Section 205, 'property' includes anything in action and any interest in real or personal property. There must be a definite interest; a mere expectancy as distinguished from a conditional interest is not a subject of property. 'Property' also signifies a beneficial right in or to a thing. Sometimes the term is used as equivalent to ownership; as where we speak of the right of property as opposed to the right of possession (q.v.) or where we speak of the property in the goods of a deceased person being vested in his executor. The term was chiefly used in this sense with reference to chattels (Finch, Law 176). Property in this sense is divided into general and special or qualified. General property is that which every absolute owner has (Co. Litt 145-b.), See OWNERSHIP. Special property has ....
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....above. Indeed, they are consistent with each other. 102. In Rustom Cavasjee Cooper v. Union of India: (1970) 1 SCC 248, the Supreme Court, while considering the scope of the expression "property" as appearing in Entry 42 of List III of the Seventh Schedule of the Constitution of India, observed as under: "Under that entry "property" can be compulsorily acquired. In its normal connotation "property" means "highest right a man can have to anything, being that right which depend on another's courtesy: it includes ownership, estates and interests in corporeal things, and also rights such as trade-marks, copyrights, patents and even rights in personam capable of transfer or transmission, such as debts; and signifies a beneficial right to or a thing considered as having a money value, especially with injured". The expression "undertaking" in s.4 of Act 22 of 1969 clearly means a going concern with all its rights, liabilities and assets-as distinct from the various rights and assets which compose it. In Halsbury's Laws of England, 3rd Edn. Vol. 6, Art. 75 at p. 43, it is stated that "Although various ingredients go to make up an undertaking, the term describes not the ....
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.... rights granted under that Act. It is urged that any issues regarding abuse of patent rights including abuse of dominance as contemplated under Section 4 of the Competition Act, are required to be addressed under the provisions of the Patents Act and, thus, the applicability of the Competition Act in certain matters regarding patents is ousted. It is contended that the Patents Act is a special Act which contains comprehensive provisions relating to grant of patents rights as well as for remedying any abuse thereof; and, on the other hand, the Competition Act is a general law enacted with a view to ensure freedom of trade and to promote and sustain competition in the market. It is, thus, urged that the Patents Act would prevail over the Competition Act and the CCI would have no jurisdiction to entertain the complaints in question. 107. The key question is whether provisions of the Patents Act exhausts all remedies that are available in respect of abusive conduct by a patentee or whether an abuse of dominant position by a patentee could also be subject matter of proceedings and orders under the Competition Act. The aforesaid issue has to be addressed bearing in mind the objective,....
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....priate amendments to the MRTP Act, 1969:- (b) changes relating to legal provisions in respect of restrictive trade practices after reviewing the existing provisions and ensuring clear demarcation between the jurisdiction of the MRTP Commission and the Consumer Courts under the Consumer Protection Act, 1986 so as to avoid any overlapping of jurisdiction; and (c) suitable administrative measures required in order to implement the proposed recommendations including restructuring the MRTP Commission and the location of Benches outside Delhi for expeditious disposal of cases pending before the Commission." 113. The High Level Committee, under the Chairmanship of Sh. S.V.S. Raghavan, submitted its report to the Central Government on 22nd May, 2000. Based on the recommendations as well as the other suggestions, the Competition Bill, 2001 was introduced in the Parliament and the Competition Act, 2002 was enacted. The Competition Act received the assent of the President on 13th January, 2003 and the provisions of the Act came into force on different dates as notified. The first such set of provisions came into force on 31st March, 2003. The Competition Act has been subs....
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....ssisting CCI and Section 17 of the Act provides for appointment of Secretary, experts, professionals and officers and other employees of CCI. 118. Section 18 of the Competition Act provides that the duty of CCI would be to "eliminate practices having adverse effect on competition, promote and sustain competition, protect the interest of consumers, and ensure freedom of trade carried on by other participants, in markets in India". The function to administer and execute the Act vests pre- dominantly with the CCI and it has a pivotal role under the Competition Act. Patents Act 119. The Indian Patents and Designs Act, 1911 was enacted for the grant of patents and for protection of inventors. After independence, a need was felt to review this law. By a Resolution of the Government of India passed on 1st October, 1948, a Committee was constituted to review the patent laws in India to ensure that patent laws are more conducive to national interest. This Committee presided by Dr. Bakshi Tek Chand, a Retired Judge of the High Court of Lahore, submitted an interim report suggesting amendments in the then existing law with a view to counteract misuse or abuse of patent rights and rec....
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.... Agreement on Trade-Related Aspects of Intellectual Property Rights (hereafter 'TRIPS'). 122. By virtue of the Patents (Amendment) Act 2002, Section 48 of the Act, which specifies the rights granted to a patentee, was substituted to read as under: "48. Rights of patentees.- Subject to the other provisions contained in this Act and the conditions specified in section 47, a patent granted under this Act shall confer upon the patentee- (a) where the subject matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing for those purposes that product in India; (b) where the subject matter of the patent is a process, the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India: Provided that the product obtained is not a product in respect of which no patent shall be granted under this Act." The proviso was subsequently deleted by Ac....
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....c) the scope and duration of such use shall be limited to the purpose for which it was authorized, and in the case of semi-conductor technology shall only be for public non- commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive; (d) such use shall be non-exclusive; (e) such use shall be non-assignable, except with that part of the enterprise or goodwill which enjoys such use; (f) any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use; (g) authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur. The competent authority shall have the authority to review, upon motivated request, the continued existence of these circumstances; (h) the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization; (i) the legal validity of any decision relating to the ....
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....ndia." 128. Section 83 of the Patents Act specifies the following principles that are required to be considered while exercising powers conferred under Chapter XVI of the Patents Act:- "83. General principles applicable to working of patented inventions. - Without prejudice to the other provisions contained in this Act, in exercising the powers conferred by this Chapter, regard shall be had to the following general considerations, namely;- (a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay; (b) that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article; (c) that the protection and enforcement of patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations; (d) that patents granted do not imped....
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....the patentee imposes a condition upon the grant of licences under the patent to provide exclusive grant back, prevention to challenges to the validity of patent or coercive package licensing; or (d) if the patented invention is not being worked in the territory of India on a commercial scale to an adequate extent or is not being so worked to the fullest extent that is reasonably practicable; or (e) if the working of the patented invention in the territory of India on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by- (i) the patentee or persons claiming under him; or (ii) persons directly or indirectly purchasing from him; or (iii) other persons against whom the patentee is not taking or has not taken proceedings for infringement." 130. A plain reading of various clauses of Sub-section 7 of Section 84 of the Patents Act also indicates that the Legislature was cognizant that in certain cases, patents rights may be misused - such as where the patentee refuses to grant licences on reasonable terms to the prejudice of trade and/or industry - and, therefore, in conformity with the T....
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....to acquire from the vendor, lessor, or licensor or his nominees, or to prohibit him from acquiring or to restrict in any manner or to any extent his right to acquire from any person or to prohibit him from acquiring except from the vendor, lessor, or licensor or his nominees any article other than the patented article or an article other than that made by the patented process; or (b) to prohibit the purchaser, lessee or licensee from using or to restrict in any manner or to any extent the right of the purchaser, lessee or licensee, to use an article other than the patented article or an article other than that made by the patented process, which is not supplied by the vendor, lessor or licensor or his nominee; or (c) to prohibit the purchaser, lessee or licensee from using or to restrict in any manner or to any extent the right of the purchaser, lessee or licensee to use any process other than the patented process, (d) to provide exclusive grant back, prevention to challenges to validity of Patent & Coercive package licensing, and any such condition shall be void." 134. Chapter XVIII of the Patents Act contains provisions regarding suits for infringeme....
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....liges the signatory countries to recognise intellectual property rights but does not disable member countries to enact laws, consistent with the TRIPS Agreement, for restricting and curbing its use in certain cases. Article 8.2 of the TRIPS Agreement expressly permits measures required to prevent abuse of intellectual property rights by right holders. Similarly, Article 31 of the TRIPS Agreement recognises that laws of member states could permit use of patents without authorisation by the rights holder, however, it enjoins the member states to respect certain parameters which are articulated in Article 31 of the TRIPS Agreement. 139. The High Level Committee constituted by the Government for recommending the legal framework for competition law (Sh. S.V.S. Raghvan Committee) was also cognizant that with the opening of the economy and with India implementing the WTO Agreements certain competition law issues would arise in respect to intellectual property rights. Paras 5.1.6, 5.1.7 and 5.1.8 of their report as accepted by the Government are relevant and are quoted below:- "5.1.6 Intellectual Property Rights India is a signatory to the Agreement on Trade Related As....
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....rovide exclusive grant back, prevention to challenges to validity of Patent and Coercive package licensing", as void. These provisions for safeguarding national and public interest from any adverse effect of grant of patent rights are permissible under the TRIPS agreement and were enacted inter alia to avoid any ambiguity as to India's obligations there under. This is also apparent from the opening remarks of the Minister of Commerce and Industry made while introducing the Patents (Amendment) Bill, 2002. The relevant extract of which is quoted below:- "Hon. Chairman, Sir, my brief introduction of this Bill to further amend the Patent Act, 1970 must begin with an acknowledgement of the uniquely constructive debate and support during the passage of the Bill in the Upper House. The Government's sensitivity to all issues and its responsiveness to suggestions for improvement was equally matched by an appreciation of the need to honour international obligations and chart a clear path for R&D driven economic development. The Members are aware that the agreement on TRIPS is an integral part of the "take-it-or-leave-it" package finalised in the GATT Uruguay Round and t....
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....curity, protection of traditional knowledge and protection of public health and nutrition as contained in Chapter XVI (Working of Patents, Compulsory Licences and Revocation) of the Patents Act. xxxx xxxx xxxx xxxx There are provisions in the Bill providing a wide-ranging and powerful weapon to the Government to extinguish the patentee's exclusive right immediately and acquire it if the occasion warrants. Let any crisis situation be visualised; the present Bill covers all contingencies. xxxx xxxx xxxx xxxx Critics have asserted that vis-à-vis TRIPS the Bill does too much; others have observed that it does too little. If anything, these criticisms confirm the fine balance which the Bill strikes between meeting our international obligations and all of our national concerns. I would categorically state that all aspects and relevant provisions of TRIPS, the Paris convention and other Conventions, post-TRIPS patent laws of different countries and the Doha Declaration have been taken on board. All ambiguities have been removed and available flexibilities are made use of to the maximum to protect the varied interests of our nation." 141. If on....
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....ents and abuse of dominance in addition to regulating combinations to avoid concentration of market power in general. Undoubtedly, the Competition Act and Patents Act are special acts operating in their respective fields, however, viewed in the aforesaid perspective the Patents Act would be a Special Act, vis-à-vis, the Competition Act in so far as patents are concerned. The Patents Act is a self contained code. 145. It is now well settled that an enactment may be considered as special in relation to one Act and yet be considered as general enactment in relation to another statute. In Life Insurance Corporation of India v. D.J. Bahadur: (1981) 1 SCC 315, the Supreme Court had observed:- ".....for certain cases, an Act may be general and for certain other purposes, it may be special and the court cannot blur a distinction when dealing with the finer points of law." In a later judgment - Allahabad Bank v. Canara bank and Another: (2000) 4 SCC 406 - the Supreme Court has explained the above principle by giving an example of Rent Control Acts which may be special statutes as compared to the Civil Procedure Code but would be construed as a general statute vis-à....
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....led that the provision of any statute must be read in the context of the statute as a whole. A non-obstante clause is a well known legislative device used to give an overriding effect to certain provisions over the others which are inconsistent with those provisions; in the present case, Section 60 of the Competition Act expressly provides that the provisions of the Competition Act shall have effect notwithstanding anything inconsistent in any other law. However, the said provision must be read in the context of the Competition Act as a whole and the mischief that is sought to be addressed by the Competition Act. Thus, in my view, Section 60 is enacted only to restate and emphasize that notwithstanding agreements, arrangements, practices and conduct which may otherwise be legitimate under the general laws would nonetheless be subject to the rigors of the Competition Act. Section 60 cannot be read to curtail or whittle down the provisions of other statutes; this interpretation would also be in sync with provisions of Section 62 of the Competition Act as indicated above. 150. In any case, in the event of any irreconcilable inconsistency between the two legislations, the later spec....
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.... have been impliedly repealed does not arise. 154. In Kunter v. Phillips: (1891) 2 Q.B. 267, it was observed as under:- "It is only when the provisions of a later enactment are so inconsistent with or repugnant to the provisions of an earlier one then only the two cannot stand together and the earlier stands abrogated by the later". 155. The above principle was reiterated by the Supreme Court in R.S. Raghunath v. State of Karnataka and Anr.: (1992) 1 SCC 335, in the following words:- "30. It is further observed that such a presumption can be rebutted and repeal by necessary implication can be inferred only when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act, that the two cannot stand together." 156. The provisions of the Patents Act which can be construed as dealing with a subject matter which is common with the Competition Act are essentially provisions of Chapter XVI and Section 140 of the Patents Act. Section 84 of the Patents Act provides for grant of compulsory licences in certain cases where reasonable requirement of public with respect to the patented inventions have not been satisfied or ....
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....ing licensee to defend a suit for infringement, I have some reservations regarding this proposition. However, in the present case, Micromax and Intex have taken such defence in the infringement suits filed by Ericsson and issues have been struck by the court; therefore, I am refraining from dilating on this aspect any further as this aspect would be best debated in the suits filed by Ericsson. 161. Section 4 of the Competition Act, which is relevant for the purposes of these petitions, concerns abuse of dominant position. Sub Section (1) of Section (4) prohibits such abuse and Sub-section (2) of Section 4 provides for what constitutes an abuse of dominant position. In certain cases, denial of market access by an enterprise placed in a position of strength in the relevant market may constitute an abuse of dominant position. If an enterprise falls foul of Section 4 and it is so established after due investigation, the CCI is empowered to pass all or any of the orders as indicated under Section 27, which reads as under:- "(a) direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of ....
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.... was introduced by the Competition (Amendment) Act, 2007 with effect from 20th May, 2009. The said Section enables CCI to make a reference to any statutory authority, which is charged with implementation of any Act, if it proposes to make any decision contrary to the provisions of the Act and an issue in this regard is raised by any party. Section 21A of the Competition Act reads as under:- "21A. Reference by Commission.-(1) Where in the course of a proceeding before the Commission an issue is raised by any party that any decision which, the Commission has taken during such proceeding or proposes to take, is or would be contrary to any provision of this (sic) [recte any] Act whose implementation is entrusted to a statutory authority, then the Commission may make a reference in respect of such issue to the statutory authority: Provided that the Commission, may, suo motu, make such a reference to the statutory authority. (2) On receipt of a reference under sub-section (1), the statutory authority shall give its opinion, within sixty days of receipt of such reference, to the Commission which shall consider the opinion of the statutory authority, and thereaft....
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....ss. The relevant clause reads as under:- "(1) In settling the terms and conditions of a licence under section 84, the Controller shall endeavour to secure- xxxx xxxxx xxxx xxxx (ix) that in case the licence is granted to remedy a practice determined after judicial or administrative process to be anti-competitive, the licensee shall be permitted to export the patented product, if need be." The above clause also indicates the legislative intention that the Competition Act and the Patents Act be worked harmoniously. Thus, it is mandated that the Controller take into account any finding of anticompetitive practice, that is returned after a judicial or administrative process including by the CCI under the Competition Act, while settling the terms of a compulsory licence issued to remedy such practice. 167. It is important to reiterate that an order inconsistent with other enactments does not necessarily imply a repeal or abrogation of other enactments. It merely implies that the order shall be given effect to and to that extent the provisions of other statutes that are inconsistent shall be bypassed. In Harishankar Bagla and Anr. v State of Madhya Pradesh: ....
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....is not necessary that any particular relief be granted to the person who provides information under Section 19 of the Competition Act; the focus of the Competition Act is to ensure that the offending anti competitive agreements, conduct and combinations are terminated and such conduct is not repeated. 171. At this stage, one may also refer to Section 3 of the Competition Act which prohibits a person, enterprise or association of persons/enterprises from entering into certain anti-competitive agreements which cause or are likely to cause appreciable adverse effect on competition within India. There does not appear to be any provision(s) of such wide import under the Patents Act. Sub-section (5) of Section 3 of the Competition Act expressly provides that Section 3 would not restrict the right of any person to impose reasonable conditions for protecting its right, inter alia, under the Patents Act. The relevant extract of sub-section (5) of Section 3 of the Competition Act is reproduced below:- "(5) Nothing contained in this section shall restrict-- (i) the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary....
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....re the Supreme Court was whether a claim for compensation in respect of motor vehicle accidents could be entertained under the Consumer Protection Act, 1986. In that context, the Court had noted that the Motor Vehicles Act, 1988 contains specific provisions for adjudicating claims of compensation in respect of motor vehicles accidents. Clearly, the claims for compensation under both the Acts could not be made simultaneously and, therefore, the inconsistency between the two Acts was apparent. The Supreme Court further noted that the Motor Vehicles Act was a special Act while the Consumer Protection Act which dealt with extending protection to consumers in general was a general Act. The Court then proceeded to examine the provisions of both the Motor Vehicles Act, 1988 and Consumer Protection Act, 1986 and concluded that a claim for compensation for a fatal injury resulting from a motor vehicle accident would fall squarely within the ambit of Section 165 of the Motor Vehicles Act, 1988 and not within the scope of the Consumer Protection Act, 1986. The Court held that "ordinarily the general law must yield to the special law" and the Motor Vehicles Act, 1988 being a special law would ....
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....on (6) of Section 84 only indicates certain factors that would be required to be taken into account by the Controller and the question whether a patentee had adopted anti-competitive practices could also be considered by the Controller. However, if CCI has finally found a patentee's conduct to be anti-competitive and its finding has attained finality, the Controller would also proceed on the said basis and - on the principle akin to issue estoppel - the patentee would be estopped from contending to the contrary. 178. In view of the aforesaid discussion, the contention that the jurisdiction of CCI under the Competition Act is ousted in matters relating to patents cannot be accepted. (iii) Whether the allegations made could be construed as an abuse of dominance 179. At the outset, it must be mentioned that since the disputes relate to the jurisdiction of CCI to entertain the complaints made by Micromax and Intex, the same must be addressed on a demurrer. In other words, all allegations made in the complaints be accepted as true to determine whether Micromax/Intex are entitled to any relief on that basis. 180. A perusal of the complaints in question indicate that both ....
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....accepted as true and correct. 183. Ericsson is a member of various Standard Setting Organizations (SSOs) including European Telecommunications Standards Institute (ETSI) which is responsible for setting standards and specifications in the field of telecommunications. Setting such industry-wise standards is necessary in the field of communications as all market participants involved in the industry must necessarily work on technologies that are compatible for seamless communication. Products and equipments used in the telecommunication industry must conform to the standard set to ensure inter-operability. This is to ensure that information is transmitted through various products (such as handsets and networks) used by various industry participants and customers. 184. Universal Mobile Telecommunication System (hereafter 'UMTS') standard which has been set by ETSI, has also been accepted in various other countries including by TRAI in India. Clearly, an inclusion of a patented technology in a standard such as UMTS could place the patent holder in a position of substantial market power. Clearly, an SEP holder such as Ericsson would be in a position to demand supra-competi....
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....loit its patent and it would be quite legitimate for a patentee to seek injunctive relief to enforce such rights. However, on the other hand, a refusal by a patentee to grant a licence may result in adverse effect on competition. 187. Given the nature of the right that a patentee enjoys, it is not easy to reconcile a patent holder's refusal to grant a licence to use his patent as a violation of antitrust laws. The interface between IPR rights and antitrust laws have been a subject matter of debate in various jurisdictions and more particularly in cases where a patentee holds an SEP. 188. In Broadcom Corporation v. Qualcomm Incorporated: 501 F.3d 297, the United States Court of Appeals considered Broadcom Corporation's (hereafter 'Broadcom') appeal against a decision of the District Court dismissing Broadcom's action against Qualcomm alleging monopolisation in Wideband Code Division Multiple Access (WCDMA) technology in the UMTS Standards and anti-competitive conduct of tying and exclusive dealing. Broadcom had alleged that Qualcomm had falsely promised to licence its patent on FRAND terms and had induced SSOs to include its technology as an essential part ....
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....ing any new patents relevant to the standard but had amended its patent applications to cover the standard. The Federal Trade Commission found that Rambus had distorted the standard setting process and engaged in anti-competitive hold up. 192. The question whether the demand of excessive royalties and certain terms of licensing could be considered as an abuse by an SEP holder has also been considered by authorities in the European Union under Article 101 and 102 of the Treaty on the Functioning of the European Union (hereafter 'TFEU'). In the case of Eurofix-Bauco v. Hilti, the European Commission held that it was an abuse to demand excessive royalty with the sole object of blocking or unreasonably delaying a licence. This decision of the commission was upheld on appeal (Case T-30/89 Hilti AG v. Commission: [1991] ECR II-1439). 193. The issue whether the action of an SEP holder in seeking injunctive reliefs against a potential licensee offends Article 102 of TFEU has also been a subject matter of debate in various cases. In what is known as the "Orange book case", a court in Germany considered the defence that seeking an injunction against infringement of patent would....
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.... Motorola. In their decision, in the case of Motorola, the European Commission held that Motorola has abused its dominant position by seeking injunctive reliefs against Apple. The Commission reasoned that even though the parties could not agree on FRAND terms, Apple had agreed to submit the FRAND disputes to a binding resolution of a German Court. Importantly, the Commission noted that any such resolution should also contain a commitment on the part of Apple not to challenge Motorola's patent. In the case of Samsung, the Commission did not proceed to make any decision with regard to infringement and accepted the binding commitments offered by Samsung not to seek injunctions in relation to any of its present or future SEPs for mobile devices for a period of five years against any potential licensee who accepted the specified licensing framework which provided for (a) a negotiation period of 12 months; and (b) in absence of a consensus, a determination by Court or an arbitrator of FRAND terms. 195. A mention must also be made on a recent decision rendered by the Court of Justice of the European Union delivered on 16th July, 2015 in Huawei Technologies Co. Ltd v. ZTE Corp., ....
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....ngly, the proprietor of an SEP which considers that that SEP is the subject of an infringement cannot, without infringing Article 102 TFEU, bring an action for a prohibitory injunction or for the recall of products against the alleged infringer without notice or prior consultation with the alleged infringer, even if the SEP has already been used by the alleged infringer. Prior to such proceedings, it is thus for the proprietor of the SEP in question, first, to alert the alleged infringer of the infringement complained about by designating that SEP and specifying the way in which it has been infringed. As the Advocate General has observed in point 81 of his Opinion, in view of the large number of SEPs composing a standard such as that at issue in the main proceedings, it is not certain that the infringer of one of those SEPs will necessarily be aware that it is using the teaching of an SEP that is both valid and essential to a standard. Secondly, after the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms, it is for the proprietor of the SEP to present to that alleged infringer a specific, written offer for a ....
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....oped the standard at issue in the main proceedings does not check whether patents are valid or essential to the standard in which they are included during the standardisation procedure, and, secondly, to the right to effective judicial protection guaranteed by Article 47 of the Charter, an alleged infringer cannot be criticised either for challenging, in parallel to the negotiations relating to the grant of licences, the validity of those patents and/or the essential nature of those patents to the standard in which they are included and/or their actual use, or for reserving the right to do so in the future." 196. It is relevant to note that the aforesaid judgment was rendered in the context of Article 102 of TFEU which reads as under:- "Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or te....
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.... market in its favour; (b) "predatory price" means the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors." 198. Although the language of Article 102 of TFEU is materially different from the language of Section 4 of the Competition Act, a close examination does indicate that Section 4 of the Competition Act would also cover abuse of a dominant position as proscribed by Article 102 of TFEU. Clause (a) and clause (b) of Section 4(2) of the Competition Act are similar in their import as clause (a) and (b) of Article 102 of TFEU. Clause (c) of Article 102 of TFEU postulates that applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, may constitute abuse of dominant position. In comparison, clause (c) of Section 4(2) of the Competition Act is much wider and takes within its sweep any practice or practices which results in denial of market access. Clause (d) of Article 102 of TFEU and clause (d) of Section 4(2) of the C....
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....is. The object of the proceedings is to prevent and curb the practices which have an adverse effect on the competition in India. The proceedings in the suits filed by Ericsson and the proceedings before CCI are not mutually exclusive. It is also necessary to bear in mind that it is not necessary that an adverse finding against Ericsson by CCI would necessarily results in the grant of relief as prayed for by Intex or Micromax. The scope of enquiry before CCI would obviously be limited to whether Ericsson has abused its dominant position and, if so found, CCI may issue orders as contemplated under Section 27 of the Act. Additionally, it must be noted that Ericsson had filed a suit after Intex had made a complaint before the CCI. 202. The contention that since, by virtue of Section 61 of the Competition Act, the jurisdiction of the Civil Courts is barred in relation to matters that CCI or COMPAT are empowered to decide and some issues before the CCI and in the suits are common, the subject matter would be outside the scope of the Competition Act, also cannot be accepted. The question whether there is any abuse of dominance is solely within the scope of the Competition Act and a civ....
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....decision delivered by the Court of Justice of the European Union in Huawei Technologies Co. (supra), the Court has taken a different view and held that an alleged infringer could not be criticised for challenging the licence parallely while negotiating for grant of licence. In Vringo Infrastructure Inc. v. ZTE: (2013) EWHC 1591 (Pat.), the High Court of England and Wales had considered the defendant's plea for a decision on the validity of the plaintiff's claim to the patents, in a suit for infringement, before proceeding to decide the FRAND issues. In that case, the plaintiff, Vringo Infrastructure Inc. (Vringo), instituted actions for infringement of its SEPs by ZTE (UK) Ltd. Vringo was prepared to offer a licence for its global SEP portfolio on FRAND terms. ZTE, on the other hand, asserted that Vringo's patents were invalid and/or not infringed and insisted on this issue being decided before deciding the issue as to the licence terms. In view of the defence taken by ZTE, Vringo contended that ZTE was not a willing licensee. This was rejected by the Court and it was held that ZTE's stand that the Vringo's patents were invalid and/or not infringed did not mean that ZTE was not a w....
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.... products using the patented technologies without either obtaining a licence from Ericsson or approaching the Controller of Patents for a compulsory licence. However, it is not open for this court, in proceedings under Article 226 of the Constitution of India, to supplant its views over that of the concerned authority; in this case the CCI. This is not a case where it can be held that no reasonable person could have formed a view that the complaints filed by Intex and Micromax, prima facie, disclosed abuse of dominance by Ericsson. This is also not a case where the impugned orders can be stated to have been passed on no material at all. Therefore, I am unable to accept that the impugned orders passed by CCI are perverse and, therefore, without jurisdiction. 209. Mr Narain had pointed out that the CCI having permitted Ericsson to file its submission ought to have considered the various issues raised by Ericsson but the impugned orders do not disclose that the CCI had considered the contentious issues. In my view, there is considerable merit in the said submission. Although at the stage of passing an order under Section 26(2) of the Act, the CCI is not required to enter into an ad....