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CS Executive · Economic, Commercial and Intellectual Property Laws · Competition Law

Kavya Pharma holds a patent and licenses a rival firm to manufacture the patented drug, imposing reasonable conditions necessary to protect its patent rights. How does section 3 of the Competition Act, 2002 treat such conditions?

Section 3 does not restrict the patent holder's right to impose reasonable conditions necessary for protecting its rights under the Patents Act, 1970. Section 3(5)(i) preserves this right. The conditions must be reasonable and necessary, and no prior approval from the Commission is required.

  1. ASection 3 does not restrict the right to impose reasonable conditions necessary for protecting rights under the Patents Act, 1970Correct
  2. BThe conditions are void because every licence restricting production violates section 3(3)
  3. CThe conditions are valid only if the Commission approves them before the licence
  4. DThe conditions are exempt only when the licensee is an end consumer

Explanation

Section 3(5)(i) says nothing in section 3 restricts a person's right to restrain infringement of, or impose reasonable conditions necessary to protect, rights under laws such as the Patents Act, 1970. The conditions must be reasonable and necessary for protecting the patent. No prior approval is required, and the end-consumer proviso belongs to section 3(4), not this exception.

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