Delhi HC patents verdict may hit small-scale, mid-sized manufacturers

livemint.com:

New Delhi: A verdict by a two-judge bench of the Delhi High Court last week is expected to have an adverse impact on India’s mid and small manufacturers who licence patents from large international firms. The court ruled that in the issues pertaining to rights of patentees, the Patents Act overrides the Competition Act and hence the anti-trust regulator cannot probe issues pertaining to rights of patentees. This verdict was delivered in the appeals moved by global companies Ericsson and Monsanto against a Competition Commission of India (CCI) probe.

Earlier, a single bench of Delhi High Court had ruled in favour of CCI—a verdict that has now been overturned. Legal experts said the judgment implies that CCI cannot probe terms and conditions imposed by patent holders on those who seek licence of these patents. Instead, any grievances regarding patentee rights need to be taken up before controller of patents.

However, unlike CCI which has wide powers to summon documents and depose people, the controller of patents is not a full-fledged regulator, legal experts said. Patent licensing is an important means for some of the local manufacturing industries, especially in sectors like pharma or advanced electronics. Since the patent holders are usually big multinational corporations, there are often complaints about abuse of market dominance by such companies.