Shardul Amarchand Mangaldas & Co. Advised Monsanto in Quashing of Proceedings Initiated by the Competition Commission of India
Shardul Amarchand Mangaldas & Co. has advised Monsanto before the Delhi High Court which resulted in quashing of proceedings initiated by the Competition Commission of India against Monsanto for an alleged abuse of dominant position.
A Division Bench of the High Court of Delhi has ruled that disputes relating to alleged anti-competitive conduct in the licensing of intellectual property rights (specifically patent rights) shall be examined under the Patents Act, 1970 (Patents Act) and not under the Competition Act, 2002 (Competition Act). This has effectively barred the jurisdiction of the Competition Commission of India (CCI) in examining patent related disputes.
A few licensee seed companies and some other parties had filed complaints before the Indian competition regulator, the CCI, alleging that Monsanto (which was subsequently acquired by Bayer AG) was engaged in anticompetitive conduct in the licensing of its Bt. cotton technology. These seed companies were separately in contractual and patent related disputes with Monsanto.
Shardul Amarchand Mangaldas & Co. assisted Monsanto throughout the proceedings before the High Court including before the Division Bench. Shardul Amarchand Mangaldas & Co. has been separately representing Monsanto before the CCI since 2016.
The team included Naval Satarawala Chopra (Partner), Harman Singh Sandhu (Partner), Aman Singh Sethi (Partner), Nitika Dwivedi (Partner), and Ishaan Chakrabarti (Senior Associate).
According to Partner Naval Satarawala Chopra, “The debate on whether the CCI or other sectoral regulators should hold the field while examining allegations of anti-competitive conduct has been heavily litigated in India. Today’s ruling by the Division Bench of the High Court is a significant departure from some of the past decisions where the Courts would rule in the CCI’s favour. This would result in parallel proceedings and risk conflicting findings on the same set of facts. We are happy that after lengthy arguments, the Delhi High Court has ultimately followed a pragmatic approach. This decision is likely to give respite to licensors and holders of intellectual property who have been embroiled in competition litigation.”
Monsanto had challenged the CCI’s jurisdiction in examining its commercial disputes and licensing practices before the High Court. A single judge of the High Court had ruled in favour of the CCI exercising jurisdiction over such matters.
Monsanto appealed the decision of the single judge before the Division Bench of the High Court. Ericsson separately appealed a similar decision in cases relating to its telecom Standard Essential Patents licensing practices.
Applauding the High Court’s decision, Partner Harman Singh Sandhu said, “The interplay between intellectual property laws and competition law has been heavily contested in India. The Division Bench of the Delhi High Court has today undertaken an in-depth examination of the reasons and objects for enacting the Patents Act and the Competition Act and has, respectfully, rightfully ruled that the Patents Act will prevail. While doing so, the Division Bench has set aside the orders of a single judge of the Delhi High Court which had ruled in the CCI’s favor as well as set aside the proceedings initiated by the CCI against Monsanto and Ericsson.”
The Division Bench set aside the orders of the single judge, as well as quashed the proceedings initiated by the CCI against Monsanto and Ericsson, for lack of jurisdiction.
The decision of the Division Bench of the High Court is attached for reference.