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MONOPOLY Vs.

COMPETITION
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Submitted by:-
Manzoor Elahi Laskar

Monopoly:- A monopoly is a market structure in which a single supplier produces and sells a
given product. If there is a single seller in a certain industry and there are not any close
substitutes for the product, then the market structure is that of a "pure monopoly".
Intellectual Property is jura in re propria.The Intellectual Property are those type of
intangible property which gives the owner of such intangible property right to exclude others
from exploiting non-corporeal asset. They include patents, copyright, trademarks, designs and
other items. It is a valuable intangible property which vests on the owner in the form of artistic,
literary, dramatic, musical, cinematographic works and sound recording. It also exists in any
new creation which has any utility and industrial application; i.e, to any invention. These rights
are protected because they are the brain child of a person and the fruits of his labour. They are
worthy of protection by national laws and international laws because of the fact that the
civilised nations recognises the value of such creations and are highly prized.
The reason for giving protection to such intellectual properties is mainly because it
provides incentives to the holder and other persons and also because they are the output of a
mans hard effort. When a man by the exertion of his rational powers has produced an original
work, he seems to have clearly a right to dispose of that identical work as he pleases and any
attempt to vary the disposition he has made of it appears to be an invasion of that right.
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Thus,
every person has a natural right to claim protection for his work or labour which is the result
of his or her effort. Any appropriation of his or her work is an unjust act.
Copyright is a legal protection of a work given to an author or the owner of the original
work. Similarly, Patent is the recognition of a mans hard labour in creating a new, useful
product or a process having industrial application at present or in future. The object of these
laws is to preserve the efforts of the individuals by rewarding them in such a way that others
cannot reproduce the same work for certain term. Thus, they in other way give monopoly rights
to the individuals so that they can enjoy benefits from their work before they actually fall within
the public domain. This exclusive right is the negative right which prevents others from
adapting, reproducing and copying the original work. Similarly, Trademarks encourage the

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8lacksLone ln hls CommenLarles, vol.2 aL p.406, quoLed ln CopyrlghL by CarLer-8uck and Skone !ames, (1963),
p.40.
MONOPOLY Vs. COMPETITION
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holders to invest in the reputation of the product, as consumers will be able to identify it by
reference to the trademark. Since marks are valuable and the holder will want to maintain its
reputation, they are indirectly a guarantee of quality.
Another reason for granting intellectual property rights is that they encourage
investments. As for example, if there were no patent rights, few firms would invest large
resources in research and development. There would be no incentive to perform research and
development.
Thus, intellectual property rights can be considered monopoly rights because they have
all the characteristics of monopoly markets; i.e, it maximizes profit, decides the price of the
products and services, exclude others, etc.
Even the Competition Act, 2002 in Section 3 (5) provides that :-
Nothing contained in this section shall restrict-
(i) the right of any person to restrain any infringement of, or to impose reasonable conditions,
as may be necessary for protecting any of his rights which have been or may be conferred upon
him under-
(a) the Copyright Act, 1957 (14 of 1957)
(b the Patents Act, 1970 (39 of 1970)
(c) the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act,
1999 (47 of 1999)
(d) the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48
of1999)
(e) the Designs Act, 2000 (16 of 2000)
(f) the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37of 2000)
(ii) the right of any person to export goods from India to the extent to which the agreement
relates exclusively to the production, supply, distribution or control of goods or provision of
services for such export.

MONOPOLY Vs. COMPETITION
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Competition:- The simple hallmark of competition law is the protection of those principles
and practices which enable the efficient functioning of markets. A natural concomitant to this
objective is making certain that incumbent enterprises do not engage in anticompetitive
practices to the detriment of the market.

Competition Act 2002 has come into force to replace the Monopolies and Restrictive
Trade Practices (MRTP) Act, 1969. After the economic reforms of 1990, it was felt that MRTP
has become obsolete pertaining to international economic developments relating to competition
law and there was a need of law which curbs monopolies and promotes competition. In 1990s
India saw substantial increases in the value and volume of international trade in goods and
services, in foreign direct investments (FDI), and in cross border mergers and acquisitions
(M&A). Over the period of time, trade barriers fell and restrictions on FDI were reduced. The
Competition Act, 2002 has been enacted with the purpose of providing a competition law
regime that meets and suits the demands of the changed economic scenario in India and abroad.

The objective of the Competition Law, 2002 is to position the competition policy with
pragmatic options to promote the spirit of competition and harmonise the conflicts caused by
the volatility of globalised markets. It provides for a regulatory framework of rules covering
the critical areas of competition namely;
Anti-competitive agreements among any person and enterprises
Abuse of dominant position in the market, and
Combinations / Mergers between Enterprises.

Provisions relating to Anti-competitive Practices under TRIPS:-
Article 6 of the TRIPS Agreement provides for exhaustion of rights, which means that once
the owner of the Intellectual Property authorised the release of the IPR, he has no right to
control the use or resale of goods in the market.
Article 7 provides for promotion of technological innovation and to transfer and
disseminate technology to the mutual advantage of producer and user of technological
knowledge in a manner conducive to social and economic welfare.
MONOPOLY Vs. COMPETITION
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Article 8 recognizes the right of members to adopt for public health and other public interest
reasons and to prevent abuse of intellectual property rights.
Article 30 provides that some exceptions to exclusive rights conferred by a patent can be
given.
Article 31 provides for compulsory licensing and government use.
Article 39.1 provides for effective protection against unfair competition by misusing
confidential information.
Article 40 provides for protection against anti-competition practices.
The reason for excluding Patents, Copyrights, Trademarks, Designs, Semi-Conductor
Integrated Circuits Layout-Design and the Geographical Indications of Goods in Section 3 (5)
of the Competition Act, 2002 is mainly because the Act governing the above mentioned
Intellectual Properties have provided for limitations on the monopoly rights itself.
Copyright Act, 1957 provides for Compulsory Licence in Sections 31, 31A and 31B if any
work is withheld from public and even for the benefit of disabled. Section 32 A is a significant
provision which provides for license to reproduce and publish literary, scientific or artistic
works if the copies of such works or such copies are not available or offered for sale in India.
Section 52 also provides certain acts which are not considered to be copyright infringement.
Thus, Copyright Act gives fair chance for a competitive to exist.
Patent Act of 1970 also provides for compulsory licensing of Patents in Section 84 if the
Patentee or his agents fails to work out the patents. Section 99 to Section 102 also provides for
the power of the Central Government for using any invention or to acquire any invention for
the purpose of the Government.
Even the Semi-Conductor Integrated Circuits Layout-Design Act, 2000 provides that
the Appellate Board can grant permission for certain use of layout-design. Similarly, the
Designs Act, 2000 in Section 4 (b) prohibits registration of a design which has been disclosed
to the public anywhere in India or in any other country by publication in tangible form or by
use in any other way. Section 9 (a), (f), and (g) of the Geographical Indications of Goods
(Registration and Protection) Act, 1999 provides for prohibited geographical indications if
the use is likely to deceive or cause confusion, which are generic terms or falsely represent the
origin of the goods, and thus in a way facilitate competition. Similar provisions can be seen in
Trade Marks Act, 1999 in Section 9 and 11. Thus, these provisions provides for fair
competition in the market.
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Conclusion:-
Although, intellectual property rights laws seeks to protect the rights of the right holders
but they also provides for competition by imposing certain restrictions. The limited monopoly
power is always under the supervision of the Government and if this monopoly right could not
satisfy the needs of the public, it can curtailed for the benefit of the public or for public interest.
Thus, the monopoly which is granted or protected by the Intellectual Property Laws are limited
monopoly and not absolute one.
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