Remedies for violations of competition law involving IP

What sanctions or remedies can the competition authorities or courts impose for violations of competition law involving IP?

Section 27 of the Competition Act 2002 states that the CCI can pass the following orders in case any agreement violates sections 3 and 4 of the Act:

  • direct that an anticompetitive agreement or association be discontinued;
  • impose appropriate penalties;
  • direct that the agreements be modified as the CCI deems fit; and
  • direct the enterprises concerned to abide by such other orders as the CCI may pass, including costs.

Further, section 28 states that the CCI may also order the division of any dominant enterprise, including transfer and vesting of property, assets and liabilities. This would include any IP as well. In fact, in December 2014, the CCI ordered the divestiture of several trademarked drugs owned by either Sun Pharmaceuticals or Ranbaxy, before approving their merger.

Competition law remedies specific to IP

Do special remedies exist under your competition laws that are specific to IP matters?


Scrutiny of settlement agreements

How would a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? What are the key factors informing such an analysis?

Thus far, India has not had any specific instances where the CCI has ordered investigation into settlement agreements in cases of IP infringement. It is interesting to note, however, that in two cases before the High Court, the parties had been ordered to mediate their differences in respect of patent infringement suits, without any deliberation on whether such settlement would likely have an anticompetitive effect. It is also not clear whether the CCI can investigate the effects of such a court-ordered settlement. However, it is interesting to note that in Telefonaktiebolaget LM Ericsson (Publ) v CCI & Anr, WP (Civil) No. 5604 of 2015, wherein the informant withdrew its complaint before the CCI on the basis of the settlement of disputes with the petitioner, the Delhi High Court noted that notwithstanding such withdrawal, the CCI would be at liberty to consider the factum of settlement and may even take suo motu action if it still feels action against the petitioner is required for abuse of the dominant position.