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The subject of competition law and intellectual property rights is an

emerging and upcoming topic of discussions. As discussed and seen
in various national and international platforms, competition law is
deeply connected and inter-related with the idea of Intellectual
property rights, another key subject of law. Wherever the question
of a patent or trademark or an industrial design, arises, it is possible
that the same may lead to a monopoly or market dominance and be
prone to abuse of dominance. To prevent and control such a
happening and to resolve the issue tensions between the intellectual
property protection and Competition Policy & Regulation domains, it
is crucial to establish a policy/regulatory framework that balances
the case for protection of intellectual property and the case for
competition through a broad interwoven structure of intellectual
property and competition laws that would, while protecting
intellectual property, enable a more efficient functioning of the
market and promote a healthy competition between the
participants. The science of biotechnology has been one of the
emerging fields for the past two to three decades and is a rapidly
growing research and intellectual property led sector. The
Biotechnology Sector today largely uses cutting edge science based
research and development techniques for isolation, modification and
combination of genetic materials which in turn are used for invention
of new combinations of genetically recombinant drugs and vaccines
and other pharmaceutical products, genetically modified
organisms/plants and foods, hybrid varieties of plants and seeds and
other agricultural products. These products aim to provide better
solutions in healthcare (diagnostics; prevention, treatment and
management of disease) enhancement of agricultural yield and
productivity (with a view to meet food security concerns) and other
areas benefitting and contributing to the overall economy and at the
same time affecting the market mechanisms.

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Black͚s Law Dictionary, defines biotechnology as, ͸˜
 





 
     

 
 
 
 
  
 
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 is a
field of applied biology that involves the use of living things in
engineering, technology, medicine, and other useful applications.
Modern use of the term includes genetic engineering as well as cell-
and tissue culture technologies. The concept encompasses a wide
range of procedures (and history) for modifying living organisms
according to human purposes - going back to domestication of
animals, cultivation of plants, and "improvements" to these through
breeding programs that employ artificial selection and hybridization.
The United Nations Convention on Biological Diversity defines
biotechnology as: "Any technological application that uses biological
systems, living

organisms, or derivatives thereof, to make or modify products or

processes for specific use." Biotechnology draws on the pure
biological sciences (genetics, microbiology, animal cell culture,
molecular biology, biochemistry, embryology, cell biology) and in
many instances is also dependent on knowledge and methods from
outside the sphere of biology (chemical engineering, bioprocess
engineering, information technology, and biorobotics). Conversely,
modern biological sciences (including even concepts such as
molecular ecology) are intimately entwined and dependent on the
methods developed through biotechnology and what is commonly
thought of as the life sciences industry. Biotech is emerging as a
sector witnessing exponential growth witnessed in sub-sectors such
as Bio-informatics sector, Industrial Biotech Sector, Agri-Biotech
Sector, Research Services Sector, Bio-Suppliers and most importantly
one of the main applications of Bio-technologies, the Bio-
Pharmaceutical Sector. Since the existence of the growing
Biotechnology industry cannot be ignored hence it becomes
imminent that large-scale investment also takes place for the
required purpose of Research and Development (R&D) in this sector.
Presently, the need for biotechnological techniques, processes and
procedures has arisen to such an extent because of the advance in
technologies and the scientific discoveries and inventions. Hence Bio-
technology has become one of the emerging spheres and
technologies in India as well on a global level.

 
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There appears to be a common trend that economies worldwide as
well as the Indian markets have attracted major players in the field of
biotechnology. The rising tide of firms dealing in Biotechnological
products and services has been noticed over the last decade in India.
The two significant factors, which lie at the base of Indiaµs
biotechnology potential, are the scientific and technical pool of
human resources and secondly the rich biodiversity of the country.3
Since India depicts an interesting demographic profile and a large
agricultural base, India being mainly an agrarian economy, it also
affords a large market base for new biotechnology products since
being a developing economy it has a wide scope for the utilization
and the implementation of these resources because of its cost
competitive manpower, well developed and integrated scientific
infrastructure and is globally recognized as a producer of low cost,
high quality bulk drugs and formulations and other biotech products
and services which holds a promising market.4
As per an authentic survey conducted in the years 2003-045, it was
deduced that the presence of the biotech industry in India was
approximately worth US$ 720mn. This sector showed promising
returns and a high growth factor hence subsequent surveys and studies
enumerated a growth by 39%. This could be witnessed in the years
2007-08, as this Sector had become one of the fastest growing and
emerging, technological, knowledge-based industries showcasing a
turnover of almost US$ 2.13 billion and further in 2008-09, the
biotechnology industry in India was estimated to be worth US$ 2.51
billion.6 Presently, India holds 2% of the market share in the global
biotech sector as it has the appropriate market and base for the rapid
growth and evolution of this industry. This may play a cardinal role in
the economic development and advancement of the country. It is also
predicted by market analysts and economic advisors that an
approximate increase in the total worth of this industry would reach
upto US$ 4.5 billion by the year 2010 in India and an employment
creation of 1 million.
Presently, the main spheres under which the biotechnology industry
exists and functions in India are; The Bio-Pharma Sector, Bio-Services
Sector, Bio-Industrial Sector, Bio-Agri Sector and theBio-Informatics
Sector which is a very new and upcoming area of biotechnology and
therefore its presence in India can only be seen upto constituting
merely 2% of the total market share of this industry amongst other
subsidiary divisions of this industry. A basic graphical representation
below portrays the sector wise distribution in the Indian market.

As the Indian market harbors some of the top biotech firms and
companies functioning in India, it becomes clear as to why the
biotech industry is one of the most upcoming, revolutionary and
mushrooming domains in the Indian perspective. The figures
estimating the presence and the existence of the biotechnology
sector in India and its control and dominance over the market. It can
be seen that due to it having a wide scope and rapidly developing
nature, the firms dealing in Biotechnology and its products and
services do exercise some type of control and dominance over the
market mechanisms. It can be concluded that even though India
being a developing economy it nevertheless show cases a vast arena
for the rise, cultivation and evolution for this Industry and promises a
bright future and scope for Biotechnology and its products and
services since it holds some of the key factors which are essential for
the overall development of the economy.

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The Biotechnology Sector is one of the fastest growing sectors
in India with almost all global majors and large Indian players
having established a presence in this sector in India.
International players are leveraging the competitively priced
but highly qualified and skilled human capital available in India
for undertaking Research and Development in India to develop
new technology and products both for Indian and global
markets. India further offers a well developed legal/regulatory
system enabling the creation and enforcement of intellectual
property and related technology transfer and licensing
arrangements. Agri-Biotech as a sub-sector is amongst the
fastest growing in the biotech sector and has witnessed globally
and in India, emergence of a single large dominant enterprise,
namely Monsanto, that has been alleged by competitors and
consumers alike of abusing its dominant position and engaging
in behaviors and activities that are prima-facie anti-competitive
and against the interests of consumers. In the India as well as
global context this assumes critical importance with the
growing concerns relating to food security. Agri-biotech has
accordingly been selected as the focus area of this project and
the project shall seek to explore the interface between
intellectual property protection in the biotechnology sector in
India and other jurisdictions and the interface of the same with
Competition Policy, Law and Regulation. The need for food
security and bio safety, better achieved in a competitive
market, has to be balanced with the protection of inventive
rights of the inventor through frameworks for protection of
intellectual property rights. It becomes imperative for
prevention of any kind of misuse and abuse of such an interest
of the inventor there has to be an effective protection regime.
This paper aims to focus and look at the types of protection
regimes and also what kinds of misuse can occur at the national
as well as the international levels mainly focusing on the Agri-
Biotech Sector perspective. The next segment deals with the
detailed discussion on the Agri-Biotech Sector concentrating
largely on the nature and scope of this sector in the Indian as
well as in the global context. It also attempts to lay down the
various regulatory policies and frameworks for controlling any
type of abuse and protect the rights of the Breeders and
Farmers and other entities who develop the concept of hybrids
and GM crops. Further in this paper, the issue of the interface
between Intellectual property rights arising in the Agri-Biotech
sector and Plant-biotechnology Industry and competition laws
will be dealt with and the anti-competitive practices which may
arise in this sector will also be looked at. Plant biotechnology or
Agriculture-biotechnology is one of the coming-of-age sciences
which are proving to be a boon to the society hence it is
essential to examine and explore this arena with its legal
implications and protection opportunities. The above section
dealt with a brief overview of the presence and the existence of
the Biotech Industry in India. This would help us understand
the nature and scope of this sector while dealing specifically
with Agri-Biotech Sector.

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Agriculture-Biotechnology or Plant-Biotechnology (herein after
referred to as the Agri-biotech sector), is the application of the
science of biotechnology in agriculture and its related
processes and products. Agri-Biotech focuses on one or all of
the following:

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Using the techniques of conventional plant breeding or
modern biotechnology, one or two genes may be transferred
to a highly developed crop variety to impart a new character
that would increase its yield. However, while increases in
crop yield are the most obvious applications of modern
biotechnology in agriculture, it is also the most difficult one.
Current genetic engineering techniques work best for effects
that are controlled by a single gene. Many of the genetic
characteristics associated with yield (e.g., enhanced growth)
are controlled by a large number of genes, each of which has
a minimal effect on the overall yield.8 There is, therefore,
much scientific work to be done in this area.

  ?   



 

Drought and excessively salty soil are two important limiting
factors in crop productivity. Using Biotechnology, crops may
 be developed with genes that will enable them to withstand
biotic and abiotic stresses and effectively meet such limiting
factors. .

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Proteins in foods may be modified to increase their
nutritional qualities. Proteins in legumes and cereals may be
transformed to provide the amino acids needed by human
beings for a balanced diet. A good example is the work of
Professors Ingo Potrykus and Peter Beyer in creating Golden
rice.

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-odern biotechnology can be used to slow down the process
of spoilage so that fruit can ripen longer on the plant and then
be transported to the consumer with a still reasonable shelf
life. This alters the taste, texture and appearance of the fruit.
-ore importantly, it could expand the marketfor farmers in
developing countries due to the reduction in spoilage with
resultant avoidance of food wastage.

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The need for an extensive and comprehensive intellectual property
rights protection regime was identified since various inventions and
subject-matters, as discussed above, faced misuse and the inventor
without exclusive rights or adequate protection in respect of the
inventions, wasdiscouraged from investing time, effort and money in
future developments and this led to a slowdown in the rate of
inventions and innovations. India is a part of the global community
that seeks to establish an equitable and extensive framework of
intellectual property rights protection. Intellectual property right
protection applies to those ʊproperties which are intangible in
nature and this protection is applicable in the form of patents,
trademarks, copyrights and trade secrets etc. This intellectual property
right protection granted to a biotechnological invention, being the
subject matter of the intellectual property may be in the form of patent
protection having great importance and value commercially. There
has been a sharp division of opinion and extensive debate regarding
whether living material created through biotechnological efforts
should be allowed to be patented and Indian patent law at present
does not allow patenting of living material. Plant varieties are
however, eligible for protection under the Protection of Plant
Varieties and Farmers Rights Act. Grant of intellectual property
protection to living organisms and plant varieties is contentious and
faces stiff opposition from environmentalist and other groups opposed
to genetic modification/engineering ostensibly on account of bio-
safety and public health issues as well as on the core issue of grant of
IP protection on living organisms being unsuitable and against the
laws of nature. There is considerable concern that the intellectual
rights protection might adversely affect food sovereignty and security
as well as result in abuse of competition by creation and perpetuation
of a small number of ever-growing very large players controlling
technology and production rights over agricultural produce.
The protection of different seeds, crop and food varieties has also
become one of the upcoming fields of intellectual property right
protection. These are protected through ʊPlant Breederµs Rights
(PBR) or the Farmerµs rights (mostly in developing countries). This
type of protection accorded to the living organisms such as to plants
and animals, may affect adversely or favourably the conservation,
availability and the use of plant and animal genetic resources.12 It is
believed that the granting of patent protection or any type of other
intellectual property rights may be beneficial as well as having a
detrimental effect on the prospects of further developments. In the
case of Breederµs rights, he enjoys exclusive rights of marketing over
the biotechnological invention and as far the Farmers are concerned,
they also are exempted from the protection and are permitted to use
the variety for further breeding, replantation of seed etc.
As seen above, till now, we have tried to explore and lay down one
type of intellectual property right protection, namely being the
Patenting regime for protecting biotechnological inventions.
But these can also be protected by alternate routes of recognition i.e.
trademarks, trade secrets, copyright protection, geographical
indications. Biotechnological inventions are not limited and restricted
to only patenting and can also be sought protection under these
alternative platforms. These being the subject-matter for intellectual
property rights, hence the properties can be bought, sold, transferred
or licensed. Express provisions have been laid down in legal
frameworks of many countries protecting and recognizing the
exclusive interest held by the inventor in the subject-matter. The
nature of intellectual property rights which should be accorded to any
biotechnological inventions will depend on certain factors and
circumstances and may differ from case to case and hence it cannot be
said that such inventions will only be protected under the patenting
regime or trademark or copyright etc. Further, the type of regulatory
and policy framework which exists in India and also at a global level
mainly being the EU and the USA will be discussed. These policies
and regulations help lay down the modes, grounds and conditions for
protecting mainly the crop and plant varieties and also promote
biological and ecological diversity.

 
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The regulatory and policy framework in India regarding the protection
granted to plant varieties did not exist in the past as this sector was
mainly controlled and dominated by the public sector and private
sector had very minimal role to play. At the advent of the ʊgreen
revolution , it was felt that farmers should be provided with more
incentives and be encouraged to use seeds of higher yielding crop
varieties without having a significant rise in the prices and the related
agricultural processes remaining cost-effective. After setting up of an
elaborate framework, these departments and bodies deal with the
regulation and control of any type of misuse towards the
biotechnological inventions and also provide effective procedures for
the promotion and the awareness of such inventions and products and
services.

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The Agreement on Trade-Related Intellectual Property Rights
(TRIPS), is an instrument of the World trade Organization (WTO)
pertaining to the protection and recognition of invented subject-matter
and laying down a standardized intellectual property rights
framework. In India, the Patents Act, 1970, has also been drafted and
enacted in consonance of the provisions of TRIPS with respect to the
Indian context.
TRIPS, also includes and lays down certain patenting provisions for
the application of effective patenting regimes in different member
states of the WTO. Article 27-34, TRIPS enumerate strong patenting
directives as guiding principles18 such as;

l
lPatents to be available under essentially the same criteria of
patentability as in the European Patent Convention (EPC) for all
fields of technology, including product patents for pharmaceuticals
(Article 27).

lPatents rights to be without discrimination as to whether products

are locally made or imported (Article 27).

lProvisions defining what constitutes infringements: this includes

importation of a patented product (Article 28.1(a)) and using, selling
or importing the direct product of a patented process (Article 28.1(b)).
 lCompulsory licenses to be allowed only under strict conditions
(Article 31).

lPatent term to be at least 20 years from filing date (Article 33).

According to the transitional provisions (Article 70.2) this should also
apply to patents which are already granted.

lReversal of onus of proof for process patents (Article 34).

Article 27 of the TRIPS, has been clouded in debate and an extensive

review process is being held under the purview of the WTO by
member nations for resolving any discrepancies that might arise in the
interpretation of the said provision. The key question here which
arises is whether ʊliving organisms can be valid patentable
subject-matter. Article 2719 under Section 5of TRIPS deals with
patentable subject-matter in case of inventions. Article 27.3 of the
TRIPS specifically deals with exclusion of certain types of organism,
processes and procedures which ʊmay be excluded from the
purview of patentability. According to paragraph 2 of Article 27,
TRIPS, the main purpose behind granting such exclusion to certain
types of inventions is that such inventions if patented may lead to
violation of public order, ethical and moral principles and may hold
serious prejudice to the environment such as patenting of various life
forms, including humans, animals, plants or any part thereof. This
may lead to a serious threat to the principles of nature as ʊlife
could also be a ground for granting patent protection which would be
violative of the ethics and morality clauses and laws of nature and
natural selection. From the above discussion it becomes clear that
patenting of ʊliving organisms is discouraged by the patenting
regime at international as well as the national levels, since The
Patents Act, 1970, in India also embodies this principle (stated under
Paragraph 3 of Article 27, TRIPS) under Clauses (h), (i) and (j) of
Section 3. Although under Article 27.3 of the TRIPS Agreement, the
patentability of the living organisms and certain types of processes
and procedures have been excluded but Article 27.3(b) of the TRIPS
Agreement, still directs the member states to lay down an effective
protection system for the patentability of plant varieties either by way
of an efficient patent system or a ›

›protection method or a
combination of both these methods. The discretion to follow and
adopt any of these protection regimes have been given to the member
states to decide with respect to the circumstances and the situations.
Parties are given the discretion to choose whether or not to exclude
and prohibit the patentability of plants and animals since under
Paragraph 3, Article 27, the phrase used for the exclusion of certain
types of inventions is  
›  ›  



 which signifies that members are provided with an
option to exclude or to include plants and animals, all life forms and
other techniques, processes as mentioned under paragraph 3, Article
27. Hence this may lead to an ethical debate and social implications
especially for developing countries.
India has adopted a ›

›system for the protection of plant
varieties which is Ĵnon-patentµ based. Article 27.3(b) is of great
eminence to India as this provides for comprehensive and focused
plant variety protection legislation. The main reason behind adopting
a ›

›system is that India has a vast diversity of landraces of
agricultural resources and indigenous and traditional knowledge.
India possesses a strong R&D base in the conventional breeding
methods.
The state plays a significant role in granting of a compulsory license
procedure since compulsory license basically consists of two parties
namely, a willing buyer and an unwilling seller and this constitutes an
involuntary contract between these two entities which is enforced by
the state.22 A compulsory license maybe granted under certain
specific circumstances such as;
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Compulsory licensing is such a provision which is an essential

remedial measure against any kind of anti-competitive practice
relating to Intellectual property rights. Some of the most common
causes for invoking compulsory licensing provisions are the refusal to
deal or the exercise of anti-competitive practices by the patent
holders. ĴRefusal to dealµ is recognized as a potential indication of
anti-competitive behavior in many jurisdictions such as China,
Argentina, Israel etc. In a leading case decided by the US Supreme
Court, p
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held that #  


  
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brief view of other jurisdictions such as the UK and the USA, in the
former, refusal to deal    ›
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One of the leading cases decided by the EC was the = 
p›'where the main issue which arose was regarding the
perpetuation of anti-competitive, concerted practices by the
enterprises relating to price-fixation, dealing solely with individual
entities and by other modes. The ECJ (European Court of Justice)
observed that since these enterprises were engaging in unfair price-
fixation by targeting specific consumer sects and also tried to
coordinate and dictate pricing levels in the community for that
product hence this was considered to be and anti-competitive and
monopolistic behavior which ultimately could harm the market.
Whereas in the latter case, the patents that were granted became the
cause of the price-fixing or worked as a restriction on the entry of
capable market players or the formation of cartels etc. Similarly in the
case of p

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›28 and also the
= p›"the Fair Trade Commission (FTC) had passed an
order for compulsory licensing in the USA.
As per Article 31 of the TRIPS Agreement, compulsory licensing as a
concept is provided but under certain conditions as the member states
practicing the ›

›system may allow any entity the use of
subject matter of a patent protection without express authorization of
the holder of that right29. Compulsory licensing is usually practiced
to prevent any ʊabuse ʊwhich might be the direct consequence of
the grant of such a right. 30
Article 31, TRIPS, also lays down certain grounds31 for granting of
compulsory license;
leach case shall be considered on its individual merits;
lprior to granting compulsory license, negotiations for voluntary
license shall take place;
lscope and duration of compulsory license shall be limited and it
will not be an exclusive right;
lcompulsory license shall not be transferable and shall be granted
only for domestic market;
l
lcompulsory license shall be terminated, when the reasons for
granting the same no longer exist;
lthe right holder will be adequately compensated;
lValidity of such license and the adequacy of compensation shall
be subject to judicial review.
Under the Indian scenario, since India being predominantly a
developing economy and even in other developing economies,
compulsory licensing may be needed so as to prevent and prohibit any
kind of monopolistic practices that might arise due to the exclusive
protection provided to the transgenic seed and plant varieties or due to
import activities. The Indian legislation, the Protection of Plant
Variety and Farmerµs Rights Act, 2002, comprises provisions for
compulsory licensing procedures where the government compels the
licensing of the product where it is feared that the holder of this
protection would not thereby produce or price the products for the
consumer welfare at large and it becomes expedient for the
government authorities to intervene for ensuring such protection

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?The European Patent Convention (EPC), 1973, lays down an express
prohibition against the patenting of living organisms such as plants
and animal varieties under Article 53(b)34, but the concept of
patenting of plants and animals needs more focused study and
discussion. The intellectual property regime in the EU context
provides some options on the issue of Plant variety35 protection. But
even in the EPC ʊ



›››  ›
 M have been excluded from the intellectual property
protection similarly as laid down under the TRIPS Agreement.36
In the United Kingdom, one of the major developments to catalyze
the emergence of plant variety rights was the enactment of the Plant
Varieties and Seeds Act, 1964.37 Other European nations also
adopted similar legislations after signing the UPOV38 Convention,
1961.39 Under this protection regime, protection of plant varieties
from Bio-piracy and violation of licensing bygiving rights to plant
breeders was ensured. Although this type of protection given to Plant
varieties were not the same as a patent protection since it was
restricted only to till the sale of the variety and not to the use of such a
variety. Hence this made this system weaker. The production of plant
varieties was not considered to be an ʊ

› under the
European patenting system and therefore made it ineligible for patent
protection but it could still be protected under the Plant Breederµs
Rights (PBRs). The conditions laid down for qualifying the eligibility
criteria for acquiring such protection were the criteria for
Distinctness, Uniformity and Stability popularly known as the DUS
Test.40 Subsequently as per further developments, Novelty was also
added to the DUS Test criteria under UPOV 1991.41 The UPOV
1991 however tries to eliminate the arbitrage between plant varieties
protection and patent regimes.
In a leading case42 decided by the EPO in the year 1984, the
exclusion of plant varieties from patent protection was construed in a
very restricted manner.43 The case dealt with the issue of chemically
treated seeds apart from the issue of the transgenic plants. It was held
that, 
 

  




 
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Whereas this position was later reviewed in a subsequent judgment44,
the issue of claim regarding transgenic plants had arisen and the
decision related specifically to a plant variety and it was held that
transformed plants could also be known as ʊplant varieties as they
having a stably transmitted characteristic phenotype, and the
prohibition given under Article 53(b) could not merely be avoided45.
Under this scenario plant cell claims were being granted and claims
regarding plants and seeds were being denied. Further, the issue
whether the final outcome of the process of transformation of the
plant cell could be termed as a ʊmicrobiological product was being
questioned since the transformation of the plant cell involved
microbiological processes. This decision faced widespread criticism
from the seed industry and the matter was referred to the Enlarged
Board of Appeal (EBA), and there already existed conflicting
previous decisions46 on this point of law. Subsequently, the decision
went into appeal and the Technical Board of Appeal (that had decided
the (
)› ›case previously) extended some of the
concerns to the Enlarged Board of Appeal over the interpretation of
Article 53(b) of the EPC. Therefore the EBA ruled48 that transgenic
plants could be considered as patentable subject-matter and this
decision was reached at by the EBA after reasoning that ʊ›

›
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 !.Since most of the member states were party to the
UPOV Convention at the time of this decision, hence there were
chances of over-lapping of protection provided to the animal and
plant varieties under the UPOV Convention regime and the patenting
provisions. This was the rationale behind the decision taken by the
EBA, and it was further applied in this case as the UPOV prohibited
the grant of dual protection of plant varieties hence these varieties
were then excluded from the patent protection only to the extent that
they were being protected by Plant Breederµs Rights under the UPOV.

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As the era of globalization and privatization materialized and the

markets across the world opened up to this new concept hence there
was a need for appropriate regulatory and statutory methods which
could promote consumer interest and welfare and also prevent any
type of misuse or abuse of power. Earlier in the Indian economy, the
predecessor of the Competition Act, 2002, was the The -onopolies
and Restrictive Trade Practices Act, 1969, (-RTP), was enacted to

  

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  %/As it can be inferred from the soul of the
preamble of the -RTP Act, 1969, that this legislation was introduced
so as to prevent any kind of abuse of dominance by market players
who exercised absolute control and power over the market
mechanisms and also prohibited and discouraged restrictive and
monopolistic trade practices. Basically it aimed at regularizing trade
and reducing trade barriers.
The successor of the -RTP Act, 1969, was the Competition Act,
2002, and continuing with the legacy of the -RTP, it aimed at
broadening the scope and the foundation laid down by its predecessor.
It also went beyond the narrow consumer focus and provides effective
advocacy measures and also deals with the competition issues that
may arise by granting affective intellectual property rights and the
consequences thereon.59 This piece of legislation aims to protect
consumer interest as far as possible and promotes and sustains healthy
competition between the market players thereby preventing any kind
of abuse.
The Competition Act, 2002, lays down and defines an enterprise60
and hence also deals with anti-competitive behavior and practices
practiced by these entities. Under the Section 4 of the Act, the
prohibition of the anti-competitive practices and agreements by way
of exerting dominance61 and abusing this right relates directly to the
Agri-biotechnology community in India as the use of the
terminator or  
 ››

 
›
,(01- marks theexistence of an anti-competitive agreement and
goes against the basic philosophy of the Act and this leads to the
perpetuation of monopoly and restricts choice to a large extent.62 The
basic philosophy behind the 
or the (01technologies are
that the crops produced by the application of these techniques are
sterile and incapable of further multiplication restricting the farmer
from using these multiple times. Hence this implies that the firms
promoting such technologies acquire a dominant position in the
market as the farmers are dependent on them for purchasing seeds for
further plantation. Therefore there exists a risk which can perpetuate
anti-competitive behavior and other similar type of concerted
practices.
Section 3(5)63 of the Competition Act, 2002, is an exception clause.
Despite of the restrictions laid down under Section 3 of the Act, it
protects the inventor of the intellectual property against the
infringement of any such rights. As the section states that,
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person the right to exercise reasonable restrictions which may be
imposed and this cannot be violative of the provisions of the
Competition Act, 2002. Although the exclusive right held by the
inventor/patent holder relating to an intellectual property right does
give an opportunity for the prevalence of a monopoly but if it is in the
boundaries of relevant law and procedure and the imposition of
reasonable restrictions, then this protection will be available to the
proprietor. Where the exercise of such rights and other concerted
practices perpetuates, there exist chances that this protection might be
lost. 64 Therefore the need arises for defining and laying down the
parameters of ʊ›
›

› and for the effective
implementation of the same so as to prevent the anti-competitive
practices and other kinds of monopolistic tendencies in the market.
Similarly, Section 465 of the Act lays down the prevalence of the
abuse of dominant position of an enterprise in the markets and has the
capacity to prevent chances of predatory or unfairpricing of seeds or
any other biotechnological products.66 The grant of patent protection
or any other form of protection to transgenic seeds and plants varieties
also creates a platform for abuse of dominant position and the
application of monopolistic tendencies since the intellectual property
rights provided to the biotechnological products guarantee exclusive
marketing and production rights to the patent holder or the inventor.
The Indian scenario faced a similar situation where the Indian
licensee of -onsanto, namely being -ahyco--onsanto (-onsanto
also had a shareholding in this Company) had been targeted.
-onsanto has an exclusive right to the Bt gene and was charging a
very high trait licensing fee on the sale of Bt Cotton Seeds sold in
India that carried the Bt gene developed and patented by -onsanto.
This resulted in very high seed prices for farmers and also made the
seeds inaccessible for many common farmers.
The -RTP Commission was approached to investigate the matter and
passed an order on 11-5-2006, imposing price controls and granting
temporary injunction and directed company not to charge the trait
value of Rs. 900 per packet of 450 grams for Bt Cotton during the
pendency of the case, and advised them to charge a reasonable trait
value considering what was charged by the patent holding company in
other economies,67 which has been followed by various state
governments imposing price controls under the Seed Control Order
read with the Essential Commodities Act. It is notable that the
Supreme Court of India has not considered it fit to interfere with the
orders of the -RTP Commission.
Also, Section 4(2) (b)68, read with Section 19(4)(f) of the Act, by
excluding limitations or restrictions of goods, and services which are
favourable to the consumers provides greater legitimacy to the
compulsory licensing procedures given under the Patents Act, 1970
and the Plant Varieties and Farmerµs Rights Act, 2001.69 As this
paper mainly focuses on the relationship between the interface
between the competition policies and intellectual property rights, it is
necessary to understand that IPRs bear a tendency of influencing and
perpetuating an abuse of the dominant position. As discussed above,
mainly Section 4, 5 read with Sections 19 and 6 respectively, of the
Competition Act, 2002, lay down the different types of anti-
competitive practices as well as the conditions and causes for an
abuse of dominant positions. Section 570 closely read and analyzed
with Section 6, prevents acquisitions which are restrictive in nature
having impacts on the market access and thus could play an important
role in predatory acquisitions in the biotechnology industry, mainly
focusing on the Agri-Biotech Sector.71
The application of intellectual property rights and the phenomena of
acquisitions and mergers go hand in hand and would encourage
monopoly rights in production, distribution and marketing of the
Biotechnological inventions which would have direct implications on
the consumer behavior by raising the price of commodities and
applying restrictions on the quantity and production size.72 But since
the plant biotech sector seeks to target the agriculture industry mostly
in developing economies, hence the public plant institutions have a
major role to play in curbing the oligopolistic tendencies which can
arise in such a market. The logistic positioning of the Agri-biotech
products in the markets pertaining to local conditions could help
regulating such anti-competitive behavior.

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The food sector is subject to the EUµs competition rules with,

however, a special regime applicable to ʊagricultural products .
Under the Lisbon Treaty104agricultural products are defined5105
namely by a list of products forming Annex 1 to the Lisbon Treaty.
The rules on competition apply to production of and trade in
agricultural products only to the extent determined by the European
Parliament and the Council106. The European Parliament and the
Council have determined the application of the competition rules to
the production of and trade in agricultural products through a
regulation first adopted in 1962 but updated through a replacing
regulation in 2006 (the ʊRegulation )107.
The production, trade in agricultural products in the EU is governed
by the competition policies under the regulations subject to three
exceptions. 108 Article 39 of the Lisbon Treaty, harbors these three
exceptions namely the national market organization and the anti-
competitive practices undertaken by farmers and farmerµs associations
are the exceptions against the applicability of competition rules to the
agricultural products and its trade.109
l
lʊFirstly, Article 39V˜
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 lSecondly, National -arket Organization: This exception dates
back to the Treaty of Rome, 1957 laying the foundation of the
European Economic Community, having a stated objective of
replacing any national market organizations in this sector by
organizations common to all member states. Largely national
organizations for agricultural produce were replaced by 1967 and this
exception has not been subject of competition case since 1988. This
being an exception hence the prohibitory competition regulations are
not applicable to the anti-competitive and dominant behavior which is
one of the main form of conduct in a national market
organization. 111 l
l
lʊThirdly, Farmers: This exception primarily is applicable to
agricultural produce and products thereof, or to the use of any joint
agricultural facilities provided the agreement relating to an obligation
to charge identical prices or the Commission finds that competition is
excluded or the objectives of Article 39 are jeopardized. ÿÿ2 Any
agreements referring to concerted or anti-competitive behavior by
farmers or farmerµs associations belonging to a single member state
are excluded from the ambit of the competition rules and regulations
and guidelines which prohibit such dominant and anti-competitive
behavior.

cü


The main aim and object of this research project is to highlight and
explore the inter-relationship and the functioning of the competition
policies and laws by granting of an intellectual property right in the
biotechnology industry with special focus on the Agri-Biotechnology
Industry. The rising tide of patent applications can be witnessed
globally in this industry as the need for such protection and licensing
has become imperative so as to safeguard the rights of the inventor
and also to encourage and promote new talents, inventions and
innovations which can be a boon for the economy. The field of
biotechnology is an upcoming science which is still at the initial stage
of establishing a foundation but it promises a revolution in the fields
of medicine, agriculture, pharmaceuticals and industrial sector
amongst other sectors of the economy along with contribution to the
GDP growth. With adequate IPR protection (and that is a key issue in
regulation) given to such eligible participants, it should be anticipated
that an abuse or misuse of such a protection should not be intended by
the protected person/entity. In certain circumstances the granting of
IPR protection too freely may be criticized on the basis that this
protection may stifle the growth and may also lead to the unnecessary
creation of power and regression in the process of inventions. This
situation may result in the abuse of the power by the participant
bearing the protection. Hence it is necessary to have regulatory and
policy controls by the application of law to enable a competitive
market and prevent abuse of domination.
lThis research project will aim to explore, discover, define and
detail the causes, inter-relationship between IPR Protection and
Competition in the biotechnology sector with special focus on the
Agri-Biotech Sector at a national as well as at a global level.
lThe project will briefly study the Biotechnology Sector in India
including sub-sectors such as Pharma (vaccines and therapeutics),
Agri-Biotech (seeds and traits), Bio-Fuels, Industrial Biotech
(Industrial Enzymes etc.), Bio-Informatics, Research Services
(Clinical Research) and other Biotech Suppliers.
lFurther the project will seek to identify key areas of interest and
concern in the existing biotechnology policy, regulatory regime, IPR
protection regime and the inter-relationship of the same with the
Competition Policy and Regulation. The project will be based on the
understanding that the Competition Act has as its objects the (a)
identification and prevention of practices that have an adverse effect
on competition, (b) promotion of competition in the relevant markets
in a sustainable manner, and (c) protection and promotion of
consumer interests.






  
c 

In an evolving intellectual property as well as competition policy
context of India the issues that have emerged in the Biotechnology
sector in United States of America as well as other jurisdictions merit
careful attention and a calibrated application to inform and enforce
the competition policy regulation. The biotech sector in India is
emerging as a high growth sector though witnessing similar issues as
are prevalent in the other global economies such as the USA.
Safeguarding of proprietary technologies through a robust intellectual
property regime needs to be balanced against the merits of healthy
competition and the public welfare especially as the Indian farm
sector is comprised largely of unorganized small holders. The order of
the Honorable -RTP Commission in the case of -onsanto, indicates
the adoption of this balanced approach and as India further integrates
into the WTO framework, the Honorable Competition Commission of
India may consider to keep a close watch on the biotechnology sector
and resolve the issue tensions arising from the interface and
interactions between the intellectual property and competition policy
domains. While there is a case for effective protection, there is a need
for a reasonable and balanced approach that is relevant to the Indian
context and takes a fine look at some key issues such as:
lUnlimited v. Limited Period of protection-

lPublic and Socio-economic costs of encouraging research

investments through IPR protection

lEnabling protection for a reasonable time bound recovery of the

expenditure on R&D

lInfringements and enforcement

lIssues relating to bio-piracy vis-à-vis grant of IPR

lThe exclusive IPR not as an absolute right but as a controlled

right which provides adequate protection and yet does not result in
anti-competitive behavior
 lGrowth of markets

lImprovement in the quality of products ± better products at

reasonable competitive market determined prices
l
lPermitting incrementation- e.g. through stacking through
licensing against appropriate technology licensing fee/royalty
arrangements.

lConsumer benefit-larger public good

lProtection of food sovereignty and food security

lProtection of indigenous and traditional knowledge

lPrevents corporate control and abuse of power and dominance

Further certain steps can be undertaken by the Competition
Regulatory authorities to strengthen and preserve the rights of
Farmers in a country like India which is mainly an agrarian economy
and farmers occupying an eminent position in our society. Although
The Protection of Plant Varieties and Farmerµs Rights Act, 2001, does
provide for the protection of Farmerµs Rights114 but the
enforceability of such rights remains elusive. Hence some of the
measures115 which can curb corporate control over the transgenic
seed and plant varieties can be said to be;
lIndentifying Anti-competitive behavior and abuse of dominance
by corporate players in this industry and the issue of consolidation of
this industry thereby narrowing the scope of the options of seeds and
the reduction of access opportunities to farmers. Since the industry
consolidates and larger players overtake smaller businesses it
discourages easy access to seed and plant variety options to farmers
and hence increasing the scope of monopolistic tendencies in this
industry.
lContinuing with the above thought, the process of mergers and
acquisitions in this industry must be carefully studied and permitted
as this might lead to stronger market players gaining a foothold in the
market by extinguishing the original and indigenous businesses,
agricultural processes and techniques practiced in our country from
generation to generation which can also be termed as 


 and protection to such knowledge.
lIn the Indian legal regulatory framework, seed and plant varieties
and related technologies have already been given protection under
certain statutory enactments116 specifically pertaining to the growth
and the prevention of any kind of misuse of the seed
and plant varieties and protection of farmerµs rights but it has to be
ensured by the appropriate authority that such protection regimes are
adequately enforced and applied in any case of exploitation and
infringement.
lThere should be efforts made to understand and study the needs
and the concerns of the farmers as well as the general public
regarding the issues of food security and the new innovative
agricultural techniques and also raising awareness regarding their
rights relating to transgenic seed by carrying out development
initiatives and programs leading to awareness in the complex area of
R&D, rights and duties of the farmers and breeders amongst the other
relevant issues arising in this sector encouraging R&D in a fair and
open manner.
lFair and open market mechanisms should be encouraged since
this would result in a more transparent and competitive market as
farmers would be motivated to enter into fair contracts which
explicitly provide for their rights and also protect their privacy as well
as property rights.
lSeed-licensing regimes have been one of the biggest concerns in
the agricultural sectors since these tend to restrict open flow and easy
access to technology and perpetuate anti-competitive behavior and
practices. The trait-licensing agreements relating to the type of
transgenic seeds and plants needs to be reviewed and formulated in a
manner so as to discourage the absolute control of the producer and
encourage the free-flow of technology and usage rights by other
players of the market which will have beneficial effects on the
transgenic seed industry benefitting the overall seed prices, ensuring
food security and enhancing the agricultural sector of any country,
with special focus to the agrarian economies which may show
promising returns and positive growth.
It can be said that there is a need for a fair and competitive
transgenic seed sector. Although this industry being a sunrise sector,
show cases a high growth factor and promising returns but due to its
importance and the ability to grow at a fast pace, there arises
chances of anti-competitive measures and practices being
undertaken by the firms in the market. These can be prevented and
curbed by the appropriate regulatory authorities and by statutory
enactments targeting this sector and laying down adequate
measures. This technology has been one of the most awaited and
mushrooming industries of this era. The preservation and promotion
of this sector is an essential task to be undertaken by the market
forces of this nation as well through the individual efforts of the
people. Hence, to maintain the consistent growth and advancements
in the transgenic seed and crop industry, one has to take into
account the issues involved and the relationships between the
intellectual property rights arena and the competition law aspects.
This would help in understanding the overall functioning of these
two aspects which could guarantee the existence of a promising and
fruitful future.

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(i) Continental Paper Bag Co. v Eastern Paper Bag Co. (210 U.S. 405, 429
(1908))

(ii) The Wood Pulp Case ( 85/202/EEC (1985) OJ L85/1)

(iii) CIBA-GEIGY/Propagating -aterial (T 49/83/ (OJ 1984, 112)

(iv) Plant Genetic Systems/Plant Cells (T 356/93 (OJ 1995, 545)

(v) Novartis/Transgenic Plants (G 1/98 (OJ 2000, 111)

(vi) G 3/95 (OJ 1996, 169)

(vii) Enzo Biochem Inc. v Calgene Inc. (29 USPQ 2d 1679 (E. Cal. 1994))

(viii) Diamond v Chakrabarty (206 USPQ 193 (Sup. Ct. 1980))

(ix) U.S. v S.C. Jonhson & Sons

(x) Radio Telefis Wireann (RTE) v European Commission (C 241-242/91P,

(1995) IECR 743, (1995) 4 C-LR 718)
A
(xi) U.S. V Pilkington

(xii) U.S. FTC v Dell Computers

(xiii) -onsanto--ahyco dispute over pricing of BT Cotton before the -RTP

Commission in India.
(xiv) -onsanto v -c.Farling (488 F.3d 973 (Fed. Cir. 2007)

(xv) -onsanto v Sruggs (459 F.3d 1329 (Fed. Cir. 2006))

(xvi) -onsanto Co. v E.I. Dupont de Nemours & Co.

(xvii) Quanta Computer Inc. v L.G. Electronics (128 S. Ct. 2109 (2008))

(xviii) Texas Grain Inc. v -onsanto Co. (2008 WL 2570530 (W.D. Tex. 2008))
 ?
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V? Towards A Functional Competition Policy For India
Edited by Pradeep S. Mehta, 2006

V? Competition Law in India

By Abir Roy & Jayant Kumar

V? http://www.cci.gov.in/images/media/ResearchReports/NaveenDahiyaRO
UGHDRAFT.pdf

V? http://www.ris.org.in/abdr_mar043.pdf

V? Pradeep S. -ehta, p 

›5 1
 › ,

V? http://www.competition-commission-
india.nic.in/competition_forum/IPRs_by_Dr.Chakravarthy_22July2005.p
df

V? Geoff Tansey, "5 "6

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