May 2011

Competition law puts a break in the monopolistic trend of the market economy while intellectual property laws allows monopoly in the technological and innovation field for a limited period as a token of reward to the creative skill of the human being. However, a trade off is necessary between the two laws and for that reason section 140 of the Indian Patent Act 1970 prohibits certain conditions in the technology transfer agreement which are of monopolistic in nature. On the other hand section 3(5) of the Indian Competition Act 2002 allows reasonable conditions to the monopolistic and restrictive trade practices on the basis of the protections allowed under all different IP Laws for copyrights, trademark, design and patent laws. However, the competition law does not define as to what are the reasonable conditions and therefore its meaning has to be derived from the decided case laws and the interpretations available from various statutes.

The Indian Competition Act which was enacted in 2002 and amended in 2007, is being brought into force in a phased manner, primarily to regulate the following:

• Anti-competitive Agreements (Section 3); (effective from 20th May, 2009)

• Abuse of Dominant Position; (Section 4); (effective from 20th May, 2009) and

• Combinations (Section 4 & 5); (effective from 1st June 2011)

There are provisions in the international conventions and in the WTO framework to deal with monopolistic practices. For example: Article 3 (k) of Trade Related Intellectual Property Rights (TRIPS) allows member countries to deal with anti-competitive practices while granting compulsory licensing to the local manufacturers on such terms and conditions as it deems fit. There are similar provisions in Article 40 of the TRIPS Agreement which allows member countries to regulate the licensing practices or conditions pertaining to IPR which restrain competition and which impede the transfer and dissemination of technology.

However, in the present world, where the technology and innovation is moving at a fast speed, it becomes difficult for the laws and the jurisprudence to keep pace with the changes in the technology. The recent controversy arising out of the Google Book Settlement case of setting up of a Universal Digital Library as decided by the US Circuit Judge on March 22, 2011 by disapproving the amended settlement agreement (ASA) between Google Inc. and the Author's Guild consisting of copyright owners of several books from around the world is an eye opener.

The issue of counterfeiting and piracy of IP rights in the music industry has become very challenging and threatens the very existence of the IP owners’ legal rights especially due to advancement of digital technology.

There are 18 subcategories under the broad category of Digital Technology namely: Digital Audio, Broadband, Digital Broadcasting, Computing, Digital Media, Digital Press, Digital Display Connectors, Electronic Publishing, Digital Electronics, Digital movie cameras, Digital Photography, Digital Radio, Software-defined, Radio, Digital subscriber line, Digital Systems, Digital Television, Digital typography, Digital Video Recorders. Digitized information is recorded in binary code of combinations of the digits 0 and 1, also called bits, which represent words and images. America's antitrust laws were born out of the industrial revolution. Opponents of the antitrust laws argue that whatever merits the antitrust laws may have had in the past they have no place in a digital economy. Rapid innovation makes the accumulation of market power practically impossible.

Information Technology Act, 2000 do provide for certain relief against cyber crimes but it remains ineffective in practical scene to deal with the problem. There is a need for awareness and severe punishment with the cooperation of each nation to deal with the menace of counterfeiting and piracy.

Therefore there is a need for convergence of technologies especially in the digital market, the antitrust regulations, IP Laws, the innovators on the one hand and the law enforcing agencies on the other hand.

- Dr. D. R. Agarwal