The NCLAT held that the Competition Act does not override the Patents Act when the alleged abuse arises out of the exercise of patent rights.
The National Company Law Appellate Tribunal (NCLAT) on Thursday reaffirmed that the Competition Commission of India (CCI) has no authority to investigate disputes involving the exercise of patent rights, holding that such matters fall exclusively under the Patents Act, 1970.
The tribunal said that when a product is protected by a patent, issues related to its pricing or licensing must be addressed under patent law and not under competition law.
A coram of Judicial Member Justice Yogesh Khanna and Technical Member Ajai Das Mehrotra held so while dismissing an appeal filed by a hospital administrator against a CCI order that had closed a complaint concerning the pricing and availability of a patented drug developed by Swiss company Vifor International (AG).
“It is apparent that the CCI lacks the power to examine the allegations made against Vifor International (AG). The Patent Act will prevail over the Competition Act in the facts of this case, as the subject matter of contention is FCM, which was developed and patented by Respondent No. 2,”
it held.
The dispute stemmed from a 2022 CCI decision that found no evidence of anti-competitive behaviour (abuse of dominance) by Vifor. The complainant, who manages a hospital providing free dialysis services under a government health programme, had alleged that Vifor's patented drug Ferric Carboxymaltose (FCM), used to treat iron deficiency anaemia in dialysis patients, was being sold at an unreasonably high price, making it unaffordable for patients.
He also claimed that the company's licensing arrangements with Indian manufacturers restricted competition and limited supply in the market.
Vifor, a Switzerland-based pharmaceutical firm, said it had lawfully patented the FCM molecule in 2008 and that the patent expired in October 2023, allowing other manufacturers to produce the drug freely thereafter.
The company argued that the CCI had no jurisdiction to question acts protected under the Patents Act, pointing to Section 3(5) of the Competition Act, which permits a patent holder to impose reasonable conditions necessary for protecting its rights.
The CCI, defending its earlier decision, said it had examined the licensing terms between Vifor and its Indian partners, Emcure Pharmaceuticals and Lupin Ltd, and found no sign of collusion or abuse.
The appellate tribunal relied heavily on rulings of the Delhi High Court and the Supreme Court, which held that the Patents Act is a self-contained code, and that all matters relating to licensing and misuse of patent rights must be governed solely by the Act.
The tribunal also noted that the Supreme Court had dismissed the CCI's appeal against the Delhi High Court's ruling in September 2025, reaffirming that the Commission had no power to conduct the investigation in such matters.
Subsequently, it held:
“Considering the judgment of the Hon'ble Delhi High Court in the case of Telefonaktiebolaget LM Ericsson (PUBL) and the Hon'ble Supreme Court in the SLP No. 25026/2023, it is apparent that the CCI lacks the power to examine the allegations made against Vifor International (AG).”
Source: Live Law
