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ABSTRACT:
Inventors and companies require Patent protection under the Indian Patents Act 1970 in today's technologically driven world. Patent protection, especially Standard Essential Patents (SEPs), has competitive advantages where no stakeholders don't want to give up. When we look at Patents in the purview of Competition Laws, some irregularity arises.
Still, presently varied cases are filed at intervals with the CCI, where SEPs & FRAND have excellent involvement in raising the question of whether or not or not companies and business enterprises promoting innovation can exercise monopoly power. Regarding standard Essential Patents (SEPs), the first case over here is Telefonaktiebolaget L M Ericsson (Publ), M/s Ericsson India personal restricted, wherever royalty payment relating to customary Essential Patents (SEPs) licensing is taken into account. The chapter addresses the three fundamental problems foremost, whether or not the Patent regime will move within the market with the complete support of Competition Law and therefore the primary roles of Competition Law in IPR keeping Patent in frontier read. The subsequent two problems tangled with one another relating to monopolization. Whether or not standard Essential Patents (SEPs) licenses are dominant and whether or not such dominance will cause abuse of patents. Licensees' preference for Section four of the Competition Law over Section 3(4), which deals with anti-competitive agreements, raises serious issues. During this chapter, the authors can articulate how the patents regime and competition law move within the market and, therefore, the operation of competition law authorities in participating to property, specializing in patents. It dismisses some common misconceptions regarding SEPs and FRAND.
Keywords : SEPs, FRAND, Competition Law, Intellectual Property, innovation, Patent regime
INTRODUCTION:
It has come to the limelight in the technology arena that Patent protection under the Indian Patents Act 1970 is of utmost necessity. Patent protection, particularly on (SEPs), has competitive benefits within the market. Various petitions involving (SEPs) and (FRAND) obligations files inside (CCI). Upon considering the two laws, one might assume that they are inconsistent and incompatible with each other. It is due to the very fact that their objectives are essentially totally different and seem to act negatively. Exertion patent rights should go against the elemental principles of competition law.
Some cases involve well-known technological businesses that were granted SEPs for their advances within the telecommunications sector. As foreseen, the claims primarily return from smartphone manufacturers or assemblers. In their report back to the Commission, the parties contended that SEPs owners within the telecommunications trade broken FRAND principles of 'fair, reasonable, non-discriminatory and within the terms given to licensees. The judicature of Delhi raises the difficulty of injunctions on the royalty’s basis and technique and royalties stacking of SEPs, indicating patent owners' hold-up. SEP-related lawsuits in India. Most competition jurisdictions that currently embrace China and South Korea do not contemplate infractions below the ambit of anti-monopoly authorities. (IPRs) will result in dominance, they need to be terminated that increasing the responsibility explicit in typical anti-monopoly arguments is improper and unsuccessful, negatively damaging.
On the one hand, patent laws grant a creator or artificer rights to promote innovation and development. They additionally supply monopoly-inducing privileges to repair the difficulty and time to make the invention for a set amount. Competition law, on either hand, advocates for and ensures free and honest competition in the market. It has been accomplished by maintaining a check on monopolies or companies with a dominant position within the market and preventing them from abusing their dominant position in technological advancement and client advantages.
The ultimate purpose of any competition legislation or policy is to defend the interests and welfare of an. During this chapter, the authors can articulate the patents regime, competition law act within the market, and competition law authorities' operation in partaking to holding, specializing in patents. It dismisses some common misconceptions regarding SEPs and FRAND.
Standard Essential Patents (SEPs):
Patents that are unavoidable for applying an industry-standard are known as Standard Essential Patents (SEP)(An Overview of Standard Essential Patents – Selvam & Selvam, n.d.). They are patents that need remarkable talent and creativity, as a standardized patent would represent the core, new idea around which would build entire industries.
These Standards are regarded as the 'basics' that everyone in any business must follow in terms of product consistency and quality, especially in the technology industry.
It implies that to create items like phones, computers, laptops, so on, they must fulfil a manufacturing standard, which may force them to produce things that include or utilize standardized technology that is patented and licensed at the discretion of the inventors.
SEPs vary from non-essential patents (non-SEPs) in that non-essential patents always have viable alternatives that do not infringe on other patents, but SEPs do not.
Industry-specific standard-setting organizations, or SSOs, determine SEPs. Standard development organizations, or SDOs, are another name for these organizations. These groups, which make up the sector's most innovative businesses, decide which of its members' patents are critical to the success of the whole industry. As a result of the unique character of these organizations, which are more or less direct competitors of the members, and the advantages of acquiring a SEPs owner are "both collaborative and fiercely competitive. “When a patent has been designated as a SEPs(Klingensmith, 2021a), it can license other industry companies on FRAND conditions. Our altered license agreements make it possible for innovation to become a standard by decreasing the implementation barriers for businesses that lack relevant patents. FRAND terms are governed by no rules and must strike a balance between the patent holder's needs and the entire industry's needs. Licensors must specify terms under which they can profit from their creations and research. Even if licensing technology is prohibitively expensive, the industry may create around it, even if it is deemed standard necessary.
Standard Essential Patent Examples:
SEPs may appear exotic until you consider all of the technology that even the most ferocious competitors share. It's not that these concepts aren't patentable; instead, and They were judged necessary by SSO for the industry standard. As a result, they are FRAND- compliant licenses for the whole industry. For example, specifies the standard for 5G and the SSO establishes the standard for various networks, with contributions from some of the industry's most inventive and important firms, including Ericsson, Huawei, Nokia, Qualcomm, ZTE, Samsung, Intel, LG Electronics, and many more.
FRAND- Definition:
FRAND stands for fair, reasonable, and non-discriminatory. FRAND is about striking the correct balance between the interests of technology consumers and those of technology suppliers. As a result, during negotiations, the interests of both parties (the patent licensor and licensee) should be addressed. The FRAND value should not increase because it renders the implementer's company unsustainable, making it difficult or impossible for the technology supplier to invest in R&D operations to produce new technological breakthroughs.
A variety of variables sets FRAND rates. For example, the patent holder is entitled to a fair cumulative royalty rate based on the conduct of the parties and the importance of the standardized technique to the finished product. The latter is critical for IOT.
Comparison Between Compulsory Licensing & FRAND Licensing:
There are two types of licensing: FRAND and Compulsory Licensing.(Sarkar, 2018a) On the one hand, FRAND licensing is used in the software, mobile phone, and communications sectors. In contrast, on the other hand, governments have used compulsory licenses in various countries where the need for the general public to use the invention (primarily pharmaceuticals) is of primary importance.
A FRAND license places a premium on providing the licensee with fair and reasonable terms. As a result, a SEP holder will not be able to demand excessive royalties. At the same time, compulsory licensing focuses on the advantage of the general public by allowing greater access to patented ideas.
Both eventually generate value for the patented product that differs from the market value of the goods. Because of these licensing systems, the entity that finally consumes the product pays less for it.
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