SC: Patents Act Prevails Over Competition Act in Licensing

Supreme Court Rules Patents Act Overrides Competition Act in Licensing Disputes, Dismisses CCI Appeals Against Ericsson and Monsanto

Apex court upholds Delhi High Court’s view that patent licensing issues fall under Controller of Patents, not Competition Commission of India

Ruling ends years-long legal battle; questions of law kept open for future cases

By Our Legal Correspondent

New Delhi, September 23, 2025: In a landmark judgment with far-reaching implications for India’s intellectual property and competition law framework, the Supreme Court of India has ruled that the Patents Act, 1970 — as amended in 2003 — prevails over the Competition Act, 2002 in matters concerning patent licensing disputes.

The apex court dismissed Special Leave Petitions (SLPs) filed by the Competition Commission of India (CCI) challenging a Delhi High Court verdict that had quashed CCI investigations against Swedish telecom giant Ericsson and US-based agricultural biotechnology firm Monsanto.

The Bench and the Decision

A bench comprising Justice JB Pardiwala and Justice Sandeep Mehta delivered the ruling, noting that the original informants in the cases had reached settlements with the companies, thereby removing the basis for the CCI’s investigations.

“Taking into consideration the High Court’s observations and the fact that the original informants have nothing further to say in view of the settlement arrived at, we do not interfere with the impugned judgment,” the bench stated.

The court, however, clarified that questions of law involved in the litigation remain open and can be raised in future proceedings.

Background of the Dispute

The controversy dates back nearly a decade:

Ericsson Case: Indian mobile phone manufacturers Micromax, Intex, and iBall alleged that Ericsson imposed unfair licensing terms for its Standard Essential Patents (SEPs) in telecommunications, violating Sections 3 and 4 of the Competition Act (anti-competitive agreements and abuse of dominant position).
Monsanto Case: Seed companies accused Monsanto of charging excessive royalties for its genetically modified cotton seeds and failing to make its patents reasonably available, also under Sections 3 and 4 of the Competition Act.

The CCI initiated separate investigations against both companies in 2014 (Ericsson) and 2016 (Monsanto).

Delhi High Court’s 2023 Ruling

On July 13, 2023, a division bench of the Delhi High Court held that:

The Patents Act — particularly Chapter XVI, introduced via the 2003 Amendment — provides a complete framework to address unreasonable licensing conditions and abuse of patent rights.
The Patents Act is a special statute, while the Competition Act is general legislation. In case of conflict, the special law prevails.
The Controller of Patents has exclusive jurisdiction over such matters, meaning the CCI cannot investigate patent licensing disputes.

The High Court quashed the CCI’s investigation orders against Ericsson and Monsanto, prompting the CCI to appeal to the Supreme Court.

Supreme Court’s Endorsement of High Court View

By dismissing the CCI’s appeals, the Supreme Court has effectively endorsed the High Court’s interpretation that patent licensing disputes fall squarely within the domain of the Patents Act.

This means that allegations of unreasonable licensing terms, excessive royalties, or abuse of patent rights must be addressed through mechanisms provided under the Patents Act — such as approaching the Controller of Patents or civil courts — rather than through CCI investigations.

Key Legal Principles Affirmed

Special Law vs General Law: When two laws overlap, the special statute (Patents Act) overrides the general statute (Competition Act) in its specific domain.
Jurisdictional Clarity: Patent licensing disputes are to be handled by the Controller of Patents, not the CCI.
Settlement Impact: Once parties settle, the basis for regulatory investigation may be lost.
Questions of Law Remain Open: The ruling does not close the door on future challenges where facts differ.

Industry and Legal Reactions

The decision has drawn mixed responses:

Patent Holders: Companies holding patents see the ruling as a protection of their statutory rights under the Patents Act.
Licensees and Competitors: Some fear the decision could limit recourse against alleged anti-competitive practices in patent licensing.
Legal Experts: Many view the judgment as a significant clarification of jurisdiction, reducing the risk of conflicting orders from different regulators.

Implications for Future Cases

This ruling could reshape how India handles disputes at the intersection of intellectual property rights and competition law:

Reduced CCI Role: The CCI may have limited scope to intervene in patent licensing matters unless they fall outside the Patents Act’s framework.
Increased Role for Patent Authorities: The Controller of Patents may see more cases involving licensing disputes and alleged abuse of patent rights.
Potential Legislative Review: Lawmakers may consider clarifying the overlap between the two statutes to avoid jurisdictional conflicts.

Global Context

The tension between patent rights and competition law is not unique to India. Jurisdictions worldwide grapple with balancing innovation incentives (through patents) and market fairness (through competition law).

In the EU and US, competition authorities can investigate patent licensing practices if they harm market competition, but such interventions are often carefully balanced against intellectual property protections.

India’s Supreme Court ruling leans towards stronger statutory protection for patent holders, at least in the procedural sense of which authority can hear disputes.

Case Details

Case Numbers: SLP (C) No. 25026/2023 and connected matters
Case Title: Competition Commission of India v. Monsanto Holdings Private Limited and connected matters
Parties Involved:
- Appellant: Competition Commission of India
- Respondents: Ericsson, Monsanto, and others
- Original Informants: Micromax, Intex, iBall, seed companies

Conclusion

The Supreme Court’s dismissal of the CCI’s appeals marks the end of a long-running legal battle between India’s competition regulator and major patent holders. By affirming that the Patents Act prevails over the Competition Act in licensing disputes, the court has provided much-needed clarity on jurisdiction — but also left open important questions for future cases.

For now, the message is clear: patent licensing disputes belong in the domain of the Patents Act, not the Competition Act.