Intellectual Property Rights in India

7

India

VINOD DHALL AND AUGUSTINE PETER

I. Introduction

India is a developing country, but with a long tradition of scientific inquiry. There was,

however, consistent decline in India's economic and scientific prowess during the eighteenthand nineteenthcenturies and continuing into the first half of the twentieth century

until the country gained independence and started a new run on the path of economic

and scientific development. The economic policies immediately after independence were

aimed at 'capsuling' generations of lost growth into a few decades. The economic and

technological policies visualised by independent India were aimed at making the country

self reliant through an import substituting strategy, with the State (public sector) given the

responsibility to build and control the 'commanding heights' of the economy. Intellectual

property (IP) laws inherited from the colonial past were not found to be suited to national

interests and were either amended or repealed and substituted by new laws enacted to

complement the self reliance and import substituting objectives. Import, in general, and

import of technology in particular, was restricted to the bare essentials. However, as time

passed, especially by the end of 1970s, it was realised that countries that were at similar

stages of development as India in the early 1960s had achieved much faster growth and

export capability through an export oriented strategy. This prompted a shift in India as well

in the 1980s towards relaxing the restrictions on industry, investment and trade. In 1980s

the reform was essentially limited to deregulation of procedures. This was followed in 1991

by comprehensive liberalisation of the economy, which included opening up to foreign

investment and technology transfer as well.

While the IP laws pre-dated India's independence, the anti-monopoly law was only

enacted in 1970. The Patents Act 1970 and other IP laws supplemented the broader

economic policy framework to make it a coherent one. The first anti-monopoly law, the

Monopolies and Restrictive Trade Practices Act (MRTP) 1969 reflected India's abhorrence

of monopolies and large business empires and had a structuralist approach; but over time

it was seen to obstruct growth. A modern competition law was enacted in India only in

2003 and was made enforceable (except the provisions relating to combinations) in May

2009. Since the implementation of the competition law is at an early stage and since final

decision in no case has yet been issued by the Competition Commission of India (CCI),

there has been no instance of formal interface as yet between the competition law and IP

156 Vinod Dhall and Augustine Peter

laws. Therefore, periodical reference would also be made to the erstwhile MRTP Act and

the jurisprudence that went with it.

This chapter is organised as follows: the first part is the Introduction. The second part

touches on the industrial and technology policies pursued by the Government since independence. The third part analyses the IP laws and competition law in the country. The

fourth part looks at the interface between competition law/policies and IP laws/policies.

The chapter ends with concluding remarks and suggestions relating to better management

of the interface between the competition law and the IP laws.

II. The Industrial and Technology Policies of India

The dynamics of Indian economic development in recent years cannot be appreciated

without reference to her colonial past, characterised by resource drain and very low rates of

growth in gross domestic product (GDP), and the period of planned economic development

that followed independence in 1947. Post independence, economic planning was primarily

aimed at building a foundation on which India could build a self reliant economy with stress

on growth and distribution. The early years concentrated on creating the necessary industrial

infrastructure to facilitate future growth. The developmental efforts were however interrupted thrice by wars, with China in 1962, and with Pakistan in 1965 and again in 1972.

Three distinct phases may be viewed in India's economic development after independence:

(1) the initial socialist period with state control of the 'commanding heights' of the

economy: 1950-51 to 1980-81;

(2) the period of domestic economic de-regulation: 1981-82 to 1990-91; and

(3) the period of liberalisation: 1991 onwards.

A. Phase I: The Socialist Phase

Although the development process only started with the launch of the first Five Year Plan

in 1951, the Industrial Policy Resolution of 1948 had already envisaged a mixed economy

for the country; it visualised four categories of industries viz:

(i) state monopolies (defence, atomic energy, railway);

(ii) mixed sectors (aircraft, ship building, telecom equipment, mineral oil, coal,