Competition Law and Patent Rights
The National Company Law Appellate Tribunal (NCLAT) has determined that the Competition Commission of India (CCI) lacks the authority to investigate disputes involving patented products. This ruling came as the NCLAT dismissed an appeal against a CCI decision that had previously closed a complaint against Vifor International AG, a Swiss pharmaceutical company. The tribunal emphasized that the Patent Act takes precedence over the Competition Act in such matters, thereby limiting the CCI’s jurisdiction.
NCLAT’s Ruling on Patent and Competition Jurisdiction
In a significant ruling, the NCLAT clarified the jurisdictional boundaries between patent law and competition law. The tribunal stated that the CCI does not have the power to investigate allegations related to patented products, as the Patent Act supersedes the Competition Act in these cases. This decision was influenced by previous judgments from the Delhi High Court and the Supreme Court, which reinforced the notion that patent rights are paramount when it comes to disputes involving patented products. The NCLAT’s ruling specifically addressed a complaint against Vifor International AG concerning its patent for Ferric Carboxymaltose (FCM), a drug used to treat Iron Deficiency Anaemia (IDA).
Background of the Case
The appeal was initiated by Swapan Dey, the CEO of a hospital that provides free dialysis services under the Pradhan Mantri National Dialysis Programme (PMNDP). Dey accused Vifor International of engaging in “anti-competitive and abusive conduct,” which he claimed rendered FCM injections unaffordable and inaccessible for patients. However, the CCI had previously dismissed the case in its October 25, 2022 order, stating that there was no prima facie evidence of a violation of the Competition Act. Dey subsequently challenged this decision before the NCLAT, arguing that the CCI had failed to adequately define the relevant market or assess Vifor’s market dominance.
Vifor International’s Defense
In its defense, Vifor International asserted that the CCI lacked jurisdiction over the matter since it involved a patented product governed by the Patent Act. The company pointed out that its patent for FCM, granted on June 25, 2008, had expired on October 21, 2023, which would allow for the drug’s manufacturing and sale without restrictions. Despite the patent’s expiration, the NCLAT focused on the jurisdictional question of whether the CCI could have examined the issue while the product was still under patent protection. The tribunal’s ruling emphasized that the protection afforded to patent holders under Section 3(5) of the Competition Act further supports the argument that patent rights should not be infringed upon by competition law.
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