Relationship between intellectual property and competition law has attracted growing attention, particularly as a result of the expansion and strengthening of both IP protection and competition law at the global scale. The relationship between these two areas of law poses uniquely difficult challenges to policymakers, particularly in developing countries, the majority of which have little or no tradition in the application of competition law and policies. In most of these nations intellectual property rights have been prolonged and strengthened in the deficiency of an operative body of competition law, in disparity to developed countries where the institution of advanced levels of IP protection has taken place in normative circumstances that provide strong defenses against anti-competitive practices.
Intellectual Property Rights (IPRs) and competition are normally regarded as areas with conflicting objectives. While Intellectual Property law deliberately subjects intellectual assets to the exclusive control of intellectual property owners, competition law seeks to avoid market barriers and benefit consumers by inspiring competition among a variety of suppliers of goods, services and technologies. Objective of the intellectual property rights protection is to recognize and reward the innovators and creators of intellectual work which in turn will infuse innovation, thereby leading to industrial and technical progress. It also infuses efficiency and stimulate competition in terms of new products, new markets and new technologies which is the steering wheel of market driven economies; the consequential positive impact of which is likely to be felt by consumers as well.
On the other hand, competition law and policy also has a vital role to play in market based economies, as it provides for an environment of free and fair play of market forces. It creates space for new entrants in the market by putting fetters on monopolistic anti-competitive behavior of dominant enterprises and by checking collusive tendencies. It strives to achieve consumer welfare and economic efficiency. Accordingly, a common thread runs through Competition policy and Intellectual Property Law as they intersect at the point of fostering innovation, efficiency, consumer welfare and economic growth. However, there exists an inevitable conflict in the sphere of ‘monopoly rights’ which is the essence of Intellectual property rights.
The abusive exercise of these very monopoly rights results in negation of immutable tenets of competition policy. The monopoly rights as granted by intellectual property rights could lead to substantial market power which may be used to destroy competition in the market by ‘exclusionary conduct’ like refusal to deal by dominant enterprises or it can be in the form of anti-competitive ‘collusive activities’ of a combination of Intellectual property right holders. IPRs also afford an opportunity to the right holders to manoeuvre the prices in a manner which enable them not only to recover the R&D costs but also reap unprecedented profits.
