Unfair Competition

1.
Protection Against Unfair Competition
Protection against unfair competition has been recognized as one of the main objectives of
intellectual property system. It does not grant exclusive rights to the owners with respect to the
subject concerned, like in the case of patents, trade marks, etc. In fact, it prohibits any act of
competition that is contrary to honest practices in industrial or commercial matters, referred to as
"unfair competition".
The acts of unfair competition not only adversely affect the competitors, which tend to lose their
stomers and market share; but also affect consumers as they are likely to be misinformed and
customers
mislead and tend to suffer economic and personal prejudice.
The following acts of unfair competition are closely related to IP and are directly relevant to
consumer protection:-
 all acts of such a nature as to create confusion by any means whatever with the
establishment, the goods, or the industrial or commercial activities, of a competitor
 false allegations in the course of trade
trade of such a nature as to discredit the establishment,
the goods, or the industrial or commercial activities, of a competitor
 indications or allegations the use of which in trade is liable to mislead the public as to the
characteristics, suitability for their purpose or quantity, of
nature, manufacturing process, characteristics,
the goods.
Whatever form unfair competition may take, it is in the interest of the honest and legitimate
entrepreneur, the consumer and the public at large that they should be prevented from it as eearly
and as effectively as possible. Free and fair competition between enterprises is considered to be
the best means of satisfying supply and demand in the economy as well as of serving the
innovation and productivity and
interests of consumers and economy as a whole. This stimulates innovation
leads to the optimum allocation of resources in the economy; reduces costs and improves quality;
as well as accelerates economic growth and development. Hence, In India, the Government has
formulated a Competition Policy which protects the interests of consumers and producers by
promoting and sustaining a fair competition.
International Journal of Advanced Legal Research

Further, fair play in the market place cannot be ensured only by the protection of industrial
property rights. A wide range of unfair acts, such as misleading advertising, violation of trade
secrets, etc., are usually not dealt with by specific laws on intellectual
intellectual property. Thus, it is
necessary to enforce Unfair Competition law to supplement the intellectual property laws and to
grant fair protection to consumers.
2. Various Forms of “Unfair Competition”
A wide range of acts are considered as Unfair Competition. These acts are: (1) unauthorized use
known indications (acts causing confusion with indications of well-known
of well-known well goods and the
like, or unauthorized use of indications of well-known
well goods and the like); (2) distribution of
goods which imitate the configuration of another individual’s goods without permission; (3)
infringement of trade secrets; (4) distribution of devices and the like that interfere with copy
acts regarding domain name(s); (6) acts which are likely to
protection technology; (5) unfair acts
mislead the public as to the place of origin and the like of goods; (7) acts which damage the
reputation of competitors; and (8) unauthorized use of trademarks by representatives and
others. Also, the law prohibits certain acts based on treaties and international agreements. These
prohibited acts are: (1) commercial use of foreign national flags and similar symbols; (2)
commercial use of marks of international organizations; (3) providing bribes and
a the like to
foreign public officials and others
others.
3. Unfair practice and Competition

C Act
Several statutes address the interplay between IP rights and competition law. Prima facie, the
Competition Act excludes from within its ambit, ‘the right of any person to restrain any
infringement of, or to impose reasonable conditions, as may be necessary for protecting any of
his rights’ under IP law. However, this is not a blanket entitlement.
Therefore, in cases where the use or non use of IP rights hampers honest trade or commercial
non-use
practices, or is adverse to public interest, the private interest in upholding IP rights can be
superseded by the authorities to enable access to such intellectual property. For example, the

Patents Act (under section 84 read with section 89) and the Copyright Act (under section
s 31,
31A and 31B) both allow for compulsory licensing, if an owner of such rights refuses to exercise
the same commercially, in furtherance of public interest. Similarly, the Trade Marks Act allows
accordance with honest commercial practices and
use of registered trademarks, if the same is in accordance
is not detrimental to or does not take unfair advantage of the distinctive character or repute of the
registered trademark (under section 30(1) of the Trade Marks Act 1999).
The compulsory licensing regime under the Patents Act is fairly elaborate. Under section 84 of
the Act, in deciding on a grant of compulsory licence, the Controller must consider factors such
as the following:
 abuse of the monopoly granted by a patent holder;
 restriction of trade and transfer of technology; and
 making available the invention at affordable prices to the public.
Under section 84, a compulsory licence can be granted after expiry of three years of grant of
patent on the following grounds:
 reasonable requirements of the public are not met (such as prejudice to trade or industry,
non-fulfilment
fulfilment of demand for the patented article, etc);
 non-affordability
affordability of the patent; and
 non-working
working of the patent within the territory of India.
ix) further states that in the case that a compulsory licence is granted to remedy a
Section 90(1)(ix)
practice held to be anticompetitive by judicial or administrative process, the licensee shall be
permitted to export the licensed product if need be.
The Patents Act also prevents restrictive conditions being imposed on licensees or assignees of
patents. Section 140 of the Act prevents the owner of the patent from entering into an agreement
by which the purchaser or the licensee is prohibited from acquiring any other articl
article from any
other person or from carrying out any other process except the patented process or to use any
other particle other than the patented article or to challenge the validity of the patent. A parallel
form of section 42 of the Designs Act. These
provision exists in respect of designs in the form
provisions attempt to prevent any abuse of the dominance that a patent holder or a proprietor of a

registered design inherently acquires by virtue of the monopoly he or she holds related to a
patent or a design registration.
istration.
In Bayer Corporation v Union of India AIR [2014] Bom 178, the Bombay High Court upheld the
grant of a compulsory licence to Natco Pharmaceuticals, an Indian generic pharmaceutical
or the treatment of kidney and
company, in respect of Bayer’s sorafenib tosylate patented drug ffor
liver cancer. The Court concurred with the findings of the Controller and the IPAB that the
demand for the drug was not being met by Bayer to an adequate extent and also the price of the
Thee Supreme Court dismissed the SLP filed by Bayer
drug was not reasonably affordable. Th
against the Bombay High Court’s order.
The Competition Act has provisions that empower the Competition Commission of India (CCI)
to penalise IP rights holders who abuse their dominant position under section 4 of the
Competition Act 2002. The Courts have recognised the jurisdictional competency of CCI in
assessing and deciding the cases for abuse of dominance (Telefonaktiebolaget LM Ericsson v
has been challenged before
CCI and Anr, 2016 (66) PTC 58 (Del)) (note that the said judgment has
the Division Bench of Delhi High Court).
Finally, several other court decisions have also attempted to harmonise the latent conflict
between other IP and competition laws. It has been consistently held that exercise of IP rights
annot be allowed to create a dominant position in the relevant market, whether in the context of
cannot
Multiplex v United Producers/Distributors Forum (UPDF), case No. 1/2009)
copyright (FICCI-Multiplex
or trademark (Hawkins Cookers v Murugan Enterprises [2012] (50) PTC 389).
3
However, the contours of the overlap and interplay between competition law and IP remain
undefined. The fundamental questions such as jurisdiction or basis of royalties are yet to be
finally determined by the courts.

Unfair Competition

Uploaded by

Copyright:

Available Formats

Unfair Competition

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Unfair Competition

Uploaded by

Copyright:

Available Formats

1.

Protection Against Unfair Competition

International Journal of Advanced Legal Research

2. Various Forms of “Unfair Competition”

3. Unfair practice and Competition

International Journal of Advanced Legal Research

International Journal of Advanced Legal Research

International Journal of Advanced Legal Research

You might also like