Steam or Splash? When Heat of Patent Law Meets the Cold Reality of Competition Law

Introduction : The Supreme Court of India is currently deciding a major legal issue that deals with exercising patent rights in a way that contributes to an unfair business practice. This situation occurs between new ideas via innovation with keeping the market fair through rules. Recently, in the matter of Competition Commission of India v. Swapan Dey, the Supreme Court stepped into this matter to solve this and determine whether the national chief market watchdog, the Competition Commission of India (‘CCI’), has authority to step into it and investigate companies that might be using their patent rights to restrict the market and block the market. This is a big move since a lower tribunal (‘NCLAT’) had earlier issued an order that saves patent owners from examination of CCI, but recently the Supreme Court has stayed some specific parts of NCLAT’s order. By doing so, the Supreme Court has now reopened one of the most significant debates in Indian law.

There is a growing friction regarding the reach of the CCI into the patent domain. Previously, a restrictive interpretation was done by the courts, holding that any dispute arising out due exercising of patent rights should fall within the ambit of the Patent Act 1970, in the ruling of Monsanto Holdings Private Limited & Ors. v. Competition Commission of India & Ors, In which the Court refused to entertain the jurisdiction of CCI on any matters to exercise patent law. Such rulings are common in India’s antitrust cases, which show how courts view the Patent Act as self-sufficient for handling of royalties, patent scopes, licensing and related matters on its own. But this view might change soon, because the Supreme Court has agreed to examine the balance between patent rights and CCI regulation.

Hence, the main matter which is faced by court is whether valid patent rights (key to encouraging new inventions) can be used in such a way that cause harm to the existing competition and avoid CCI checks. Building on the recent ruling in CCI V. Swapan Dey, this blog explores this matter and suggests where the law should fair monopoly from illegal market blocking.

CCI v. Swapan Dey: An Analysis

On February 2, 2026, the Supreme Court paused certain aspects of an NCLAT decision in Swapan Dey v. Competition Commission of India, which stated that the Competition Act is irrelevant to claims of abuse of dominance which is linked to patent rights. Referencing that order, the Court deferred its ruling solely on the matter that whether CCI’s authority extends into areas governed by the Patent Act, 1970, but chose not to re-examine the core issues on their substance. The NCLAT had leaned on the ruling by Delhi High Court 2023 division bench in the case of Ericsson-Monsanto and both invoked the lex specialis rule, which states that treat the Patent Act as the dedicated and separate statute which is able to resolve patent misuse and unreasonable licensing issues, thereby excluding the Competition Act. In Swapan Dey the conflict arises from allegations against Swiss pharmaceutical company Vifor International for abusing their dominant position through their patented medicine. Even though the CCI denied this claim on their merits, the NCLAT completely removed its jurisdictional authority.

This important issue is not just about a simple fight, which is over whose application of law will prevail or how far each law goes. At its core, the real question asks when will a legal right will converted into a shield for unfair ways of blocking competition?

The Thin Boundary Between Exclusivity and Exclusion

Think about a firm that invented a revolutionary vaccine, while bearing all substantial financial and clinical risks and expenses. Naturally, the innovator tries to recover all the investment cost through the help of exclusive patent rights. These exclusivity rights can be considered as an incentive for their R&D, but it became problematic when it transformed into exclusionary conduct. Whenever the firm uses its right which is lawful monopoly to restrict competitors and shut off market access, it can cause harm to consumer welfare and because of this, the market condition can be transformed into anti-competitive. 

As the primary guarding of market competition, the CCI must clarify that use of IP rights does not become a reason for distorting the market. It basically creates a clear line between exercise of exclusivity and anti-competitive exclusion which is instructed by Section 3(5) of the Competition Act,2002. This act protects rights of an innovator so that they can impose conditions, but it comes with some restrictions that any restrictions imposed by the patent holder must be in a fair and reasonable manner to avoid regulatory scrutiny.

Recent intervention by the CCI in the matter where inclusions of patent rights raises a question about the jurisdiction of CCI and the limits of that authority. Because the Patent Act of 1970 grants exclusive rights to make and use to the investor due to their hard work, and many argue that patent products are inherently exempt from the antitrust law. This tense matter leads to the beginning of a question: Which authority can decide when the exercise of patent rights goes beyond lawful restrictions of CCI.  

One way to solve this problem is to apply the Adverse Effect on Competition (AAEC) test under Section 19(3) of the Competition Act. This test does not question whether an intellectual property right is valid; rather than asking questions it only checks how that right is being used in a real market. If a patent holder’s practice does not fall under the ambit of Section 19(3), it will be considered as a legal practice. But if their conduct contributes to creating a barrier for new commerce, harms consumers, or blocks the market without any efficient benefits, it falls under the ambit of anti-competitive. In this matter, the CCI is not usually interfering with a special law; rather , it is simply to act as an important safeguard to promote fair competition practice and consumer welfare.

Under Section 62 of the Competition Act, it is clearly mentioned that the power, jurisdiction, and functions of CCI should be exercised in addition to other existing statutes (such as Patent rights) rather than in their derogation. This Act is designed to complement the framework of IP rights, which defines that the CCI is neither subordinate nor in conflict with patent law. The true distinction isn’t whether exclusive rights exist, but whether their use is causing anti-competitive harm or not.  As long as the exclusive rights protect what patent law itself protects, it will lead to controlling of matter by patent law. But at the time when exclusivity is used to block competition in place of encouraging innovation, competition law stepped into the matter.

Conclusion: A Way Forward

Imagining a patent for a drug which can save a life: though the creator deserves exclusive rights, but refusing to license that drug to available in market or to be generic and locking down the distributors jumped from legal exclusivity into anti-competitive matter. This kind of abuse in the market by the patent holder must be regulated by the CCI as it was created only to regulate these kinds of situations.

Excluding the CCI from these matters weakens the competitive framework of India, as patent authorities are not suited to handle the antitrust issues which are complicated in nature. If court will keep allowing this kind of special protection to heavily regulated sectors such as, pharmaceuticals from CCI scrutiny, it may lead to the setting of a harmful precedent. We can already observe a similar issue in telecom, where the Supreme Court’s ruling in Competition Commission of India v. Bharti Airtel forced the CCI to wait for TRAI to act first, which contributed to a delay in enforcement. If this trend of providing immunity from authority of antitrust review continues, the Competition Act may lose its usefulness altogether. 

Author: Nitesh Joshi in case of any queries please contact/write back to us via email to content@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

Endnotes

1. Competition Commission of India v. Swapan Dey & Anr., Civil Appeal No. 519 of 2026, order dated 2 February 2026 (Supreme Court of India). The Supreme Court issued notice and stayed paragraphs 8–10 of the impugned order, while confining further consideration to the question of jurisdiction.

2. Monsanto Holdings Pvt. Ltd. & Ors. v. Competition Commission of India & Ors., LPA 247/2016 and connected matters, decided on 13 July 2023 (Delhi High Court). The Division Bench held that the CCI could not exercise jurisdiction over actions of an enterprise undertaken in the exercise of its rights as a patentee, treating the Patents Act framework as governing the field.

3. The Competition Act, 2002, ss. 3(5), 4, 19(3), 60 and 62, No. 12 of 2003, India Code. Section 3(5) contains the intellectual-property exception concerning reasonable conditions necessary for protecting statutory IP rights; Section 19(3) sets out factors relevant to determining appreciable adverse effect on competition, while Sections 60 and 62 address the Act's relationship with other laws.

4. The Patents Act, 1970, ss. 83, 84 and 90, No. 39 of 1970. Chapter XVI establishes principles governing the working of patents, compulsory licensing and the terms of compulsory licences, including considerations relating to public availability, affordability and reasonable remuneration.

5. Competition Commission of India v. Bharti Airtel Ltd. & Ors., (2019) 2 SCC 521, decided on 5 December 2018 (Supreme Court of India). The Supreme Court considered the interaction between the CCI and the sectoral telecom regulator and recognised that, in the circumstances of that case, jurisdictional facts within TRAI's specialised domain had to be addressed before competition-law proceedings could effectively proceed.

6. Intellectual Property India, “The Patents Act, 1970 (incorporating amendments till 1 August 2024),” Office of the Controller General of Patents, Designs and Trade Marks, Government of India. See particularly Chapter XVI on the working of patents, compulsory licences and revocation.