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Justice R B Ginsburg R New

The document is a memorandum submitted by Avaritia Pharmaceuticals Ltd. in response to a civil appeal concerning competition law and patent rights in India. It outlines the jurisdiction of the Supreme Court, summarizes the facts of the case, and presents legal arguments against the claims made by the petitioners. Key contentions include the assertion that the Competition Commission of India lacked jurisdiction and that Avaritia's pricing practices do not constitute abuse of dominant position.

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0% found this document useful (0 votes)
63 views37 pages

Justice R B Ginsburg R New

The document is a memorandum submitted by Avaritia Pharmaceuticals Ltd. in response to a civil appeal concerning competition law and patent rights in India. It outlines the jurisdiction of the Supreme Court, summarizes the facts of the case, and presents legal arguments against the claims made by the petitioners. Key contentions include the assertion that the Competition Commission of India lacked jurisdiction and that Avaritia's pricing practices do not constitute abuse of dominant position.

Uploaded by

shashankdgreat6
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

T C – Justice R B Ginsburg R

2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT


COMPETITION 2024

BEFORE THE HON’BLE SUPREME COURT OF INDIA


UNDER ARTICLE 136 OF THE CONSTITUTION OF INDIA ADMITTED AS CIVIL APPEAL
UNDER SECTION 53T OF THE COMPETITION ACT, 2002

IN THE MATTER OF

RONIT HALDER & ANR…………...………………………PETITIONERS

V.

AVARITIA PHARMACEUTICALS LTD……………………………RESPONDENT

S.L.P./C.A. NO.______/2023

MEMORANDUM ON BEHALF OF THE RESPONDENT


DRAWN AND FILED BY THE COUNSELS FOR THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

TABLE OF CONTENTS

TABLE OF CONTENTS…………………………………………………………………....1
LIST OF ABBREVIATIONS……………………………………………………………….2
INDEX OF AUTHORITIES……………………………………………………………..…3
STATEMENT OF JURISDICTION………………….……………..………………..……7
SUMMARY OF FACTS………………………………………………………..…………...8
ISSUES RAISED…………………………………………………………………………...11
SUMMARY OF ARGUMENTS………………………………………………………..…12
ARGUMENTS ADVANCED…………………………………………………...…………13
CONTENTION 1: THAT THE CCI HAD NO JURISDICTION TO INVESTIGATE AND
TAKE ACTION AGAINST THE IMPUGNED CONDUCT OF AVARITIA WHICH WERE
PERFORMED IN EXERCISE OF PATENT RIGHTS OVER IN ‘101 AND THE PATENTS
ACT, 1970 PRECLUDED OPERATION OF THE COMPETITION ACT, 2002 IN
MATTERS INVOLVING THE USE OF PATENT RIGHTS……………………………….13

CONTENTION 2: THAT A FINDING OF ABUSE OF DOMINANT POSITION IS NOT


BASED SOLELY ON EXCESSIVE AND UNFAIR PRICING BY A DOMINANT PLAYER
IN THE ABSENCE OF EXCLUSIONARY CONDUCT SUSTAINABLE.………………..18

CONTENTION 3: THAT AVARITIA’S PRICING OF ITS ONCOTINIB DRUG CARUS


NOT AMOUNTED TO ABUSE OF DOMINANT POSITION………….............................23

CONTENTION 4: THAT AVARITIA’S AGREEMENTS WITH ITS DISTRIBUTORS


WERE NOT ANTI-COMPETITIVE AND NOT VIOLATIVE OF §3 OF THE
COMPETITION ACT, 2002…………………………………………………………..……30

PRAYER………………………………………………………………..…………….…….36

[1]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

LIST OF ABBREVIATIONS

 & And

 § Section

 AAEC Appreciably Adverse Effect on

Competition

 AIR All India Reporter

 Anr. Another

 Art. Article

 CA Civil Appeal

 CCI Competition Commission of India

 Hon'ble Honorable

 IPR Intellectual Property Rights

 MANU Manupatra

 Ors. Others

 RPM Resale Price Maintenance

 SC Supreme Court

 SCC Supreme Court Cases

 SLP Special Leave Petition

 TRIPS Trade-Related Aspect of

Intellectual Property Rights

 US United States

 v. versus

[2]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

INDEX OF AUTHORITIES

CASES CITED
 ADM, Jabalpur v. Shivakant Shukla, (1976) 2 SCC 521.
 Air Canada and Others V Secretary of State For Trade and Another, [1983] 2 WLR
494.
 American Tobacco Co. v. United States, 328 US 781.
 Anand Parkash Agarwal v. Dakshin Haryana Bijli Vitran Nigam, 2017 SCC OnLine
Comp AT 85
 Ashoka Marketing Ltd. v. Punjab National Bank, (1990) 4 SCC 406.
 Atos Worldline India Pvt. Ltd. v. Verifone India Sales Pvt. Ltd., 2015 SCC OnLine CCI
57.
 Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 302 (CA2 1979).
 Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, (1979) 2 SCC 511.
 Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic, 65 F.3d 1406 (7th
Cir. 1995).
 Carona Ltd. v. Parvathy Swaminathan, (2007) 2 RLR 481.
 Cartelisation in the supply of Bearings (Automotive and Industrial), In re, 2021 SCC
OnLine CCI 54.
 CCI v. Bharti Airtel Ltd., (2019) 2 SCC 521.
 CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57.
 Competition Commission of India v. Co-ordination Committee of Artists and Ors. AIR
2017 SUPREME COURT 1449.
 Delhi Science Forum v. Union of India, (1996) 2 SCC 405.
 ESYS Information Technologies Pvt Ltd v Intel Corporation & Ors Case No. 48/2011
 FICCI - Multiplex Association of India v. United Producers, 2011 SCC OnLine CCI
33.
 GlaxoSmithKline Services Unlimited v. Commission of the European Communities C-
501/06 P.
 Gobind Sugar Mills Ltd. v. State of Bihar, (1999) 7 SCC 76.
 Gulshan Rai Jain & Sons v Rohtas Industries Ltd, RTP Enquiry No. 86/1984, Order
dated 23 August 1984.

[3]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

 Haridas Exports v. All India Float Glass Manufacturers' Assn., (2002) 6 SCC 600.
 HMM Ltd v Director General, Monopolies and Restrictive Trade Practices
Commission, (1998) 6 SCC 485.
 HT Media Ltd v. Super Canettes Industries Ltd, 2014 Comp LR 129 (CCI).
 K Sera Sera Digital Cinema Ltd. v. Pen India Ltd., 2017 SCC OnLine CCI 31.
 Kapoor Glass Pvt. Ltd. v. Schott Glass India Pvt. Ltd., 2012 SCC OnLine CCI 17.
 M/s Maharashtra State Power Generation Company Ltd. and Ors. v. Coal India Ltd.
and Ors., Case Nos. 03, 11 & 59 of 2012.
 Nagarjuna Fertilizers and Chemicals Limited, Hyderabad v. Union of India, CP(IB) No.
524/9/HDB/2019.
 Patel Brothers v. State of Assam and Ors. AIR 2017 SC 383.
 Re Bombay Footwear Pvt Ltd, RTP Enquiry No. 1/1984, Order dated 19 March 1985.
 Re Colgate Palmolive (India) Ltd, RTP Enquiry 90/1986, Order dated 16 February
1987.
 Re Tata Iron & Steel Co Ltd and Indian Tube Co Ltd, RTP Enquiry No. 39/1984, Order
dated 23 September.
 Re Usha International Ltd, RTP Enquiry No. 15/1984, Order dated 1 April 1986.
 Re Voltas Ltd, RTP Enquiry No. 14/1987, Order dated 22 July 1987.
 Santuka Associates Pvt. Ltd. v. All India Organization of Chemists and Druggists, 2013
SCC OnLine CCI 14.
 Scandlines Sverige AB v Port of Helsingborg [2006] 4 CMLR 23.
 Shamsher Kataria v. Honda Siel Cars India Ltd., 2014 SCC OnLine CCI 95
 Shamsher Kataria v. Honda Siel Cars India Ltd., 2014 SCC OnLine CCI 96.
 Shamsher Kataria v. Honda Siel Cars India Ltd., 2014 SCC OnLine CCI 96.
 Standard Oil Co of California and Standard Stations v. United States, 1949 SCC OnLine
US SC 77.
 State of Punjab v The Labour Court, Jullundur and Others MANU/SC/0375/1979.
 United Brands Company and United Brands Continental BV v. Commission of the
European Communities, (1978) ECR II-207.
 US v. Coalgure and Co, 250 US 300.

[4]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

STATUTES REFERRED
 The Competition Act, 2002.
 The Patent Act, 1970.
 The Constitution of India, 1950.
BOOKS REFERRED
 Bryan A. Garner, BLACK’S LAW DICTIONARY (THOMSON REUTERS, 8th edn.,
2015).
 V. D. Mahajan, JURISPRUDENCE AND LEGAL THEORY (EASTERN BOOK
COMPANY, Lucknow, 5th edn., 2019).
 Thomas K. Cheng, The Patent-Competition Interface Developing Countries (Oxford
University Press, United Kingdom, 1st edn., 2021).
 Rochelle C. Dreyfuss and Justine Pila (eds.), THE OXFORD HANDBOOK OF
INTELLECTUAL PROPERTY LAW (Oxford University Press, United Kingdom, 1st edn.,
2018).
 G. B. Reddy, INTELLECTUAL PROPERTY RIGHT AND THE LAW, (GOGIA LAW
AGENCY, Hyderabad, 2017).
 S. R. Myneni, PATENT RIGHT CREATION AND REGISTRATION [Law of
Patents], (Asian Law House, Hyderabad, 1st edn., 2017).
 V. K. Ahuja, Law Relating to INTELLECTUAL PROPERTY RIGHTS, (LexisNexis,
Haryana, 3rd edn, 2017).
 Avtar Singh and Harpreet Kaur, COMPETITION LAW (EASTERN BOOK
COMPANY, Lucknow, 1st edn., 2012).
 K. K. Sharma, Competition Commission Cases A Compendium of CCI Cases from
2009-2014 (LexisNexis, Haryana, 2014).
 Abir Roy and Jayant Kumar, Competition Law in India (EASTERN LAW HOUSE,
New Delhi, 2nd edn., 2017).
 Richard Whish and David Bailey, Competition Law (Oxford University Press,
United Kingdom, 9th edn., 2015).
 Sudhanshu Kumar, S M DUGAR GUIDE TO COMPETITION ACT, 2002
(LexisNexis, Haryana, 8th edn., 2022).
 Krishan Keshav and Divya Verma, COMPETITION AND INVESTMENT LAWS IN
INDIA (SINGHAL LAW PUBLICATION, Delhi, 3rd edn., 2017).

[5]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

LEGAL DATABASES

 Manupatra
 SCC Online
 Jstore

REPORTS, JOURNALS AND WEBSITES


 “Lex specialis | How does law protect in war?” ICRC Casebook , available at:
[Link]
specialis#:~:text=This%20Latin%20term%20is%20derived,prevail%20over%20more%20ge
neral%20rules. (last visited on January 20, 2024).
 Jerr Melet, “Harmonious Construction and the International Law Allegory in India”
Cambridge Core Blog (2022), available at:
[Link]
international-law-allegory-in-
india/#:~:text=The%20doctrine%20of%20'harmonious%20construction'%2C%20in%20the%
20present%20context,by%20'harmonising'%20the%20laws. (last visited on January 23, 2024).
 Shri Justice N. Rajagopala Ayyangar, “Report on the revision of the revision of the
patents law” (September, 1959), available at:
[Link]
tee_report.pdf (last visited on January 29, 2024).
 Saumya Kumar Singh and Prashant Shivam, “PATENT LAWS AND THEIR
SERVICE FOR IP RIGHTS” Articles – Manupatra (2022) available at:
[Link]
FOR-IP-RIGHTS (last visited on February 22, 2024).
 Exclusionary practice (Concurrences) available at:
[Link] (last visited on March 1,
2022).

[6]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

STATEMENT OF JURISDICTION

THE RESPONDENT HUMBLY SUBMITS THIS MEMORANDUM FOR THE PETITION


FILED BEFORE THIS HON'BLE SUPREME COURT OF INDIA.

THE PETITIONERS HAVE INVOKED THE JURISDICTION OF THIS HON'BLE


SUPREME COURT UNDER ARTICLE 1361 OF THE CONSTITUTION OF INDIA READ
ALONG WITH SECTION 53T2 OF THE COMPETITION ACT, 2002 CHALLENGING THE
ORDER OF THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL. IT SETS
FORTH THE FACTS AND THE LAW ON WHICH THE CLAIMS ARE BASED.

ART. 136. SPECIAL LEAVE TO APPEAL BY THE SUPREME COURT.—

(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant
special leave to appeal from any judgment, decree, determination, sentence or order in any
cause or matter passed or made by any court or tribunal in the territory of India.
(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed
or made by any court or tribunal constituted by or under any law relating to the Armed Forces

S. 53T. APPEAL TO SUPREME COURT.—

The Central Government or any State Government or the Commission or any statutory
authority or any local authority or any enterprise or any person aggrieved by any decision or
order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from
the date of communication of the decision or order of the Appellate Tribunal to them:

Provided that the Supreme court may, if it is satisfied that the applicant was prevented by
sufficient cause from filing the appeal within the said period, allow it to be filed after the expiry
of the said period of sixty days.

1
The Constitution of India, art. 136.
2
The Competition Act, 2002 (Act 12 of 2003), s. 53T.
[7]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

SUMMARY OF FACTS

BACKGROUND
Avaritia Pharmaceuticals Ltd. (‘Avaritia’) is an India-based company office in Mumbai,
[Link] is engaged in the discovery, development, manufacture and commercialization
of prescription and non-prescription pharmaceutical drugs, including oncology products
Avaritia operates in over 30 countries. Dolittle Pharmaceuticals Pvt. Ltd. is a family-owned
business that focuses on innovation in drug development, mostly in India. Its headquarters are
located in Pune, India. The World Health Organization designated “Oncotinib,” a novel
molecule that targets a variety of diseases, including cancer, as the creation of their research
team.
ONCOTINIB AND TREATMENT OF NON-SMALL CELL LUNG CANCER
Research indicates that mutations in epidermal growth factor receptor (‘EGFR’) contribute to
various cancers, including non-small cell lung cancer (‘NSCLC’). Dolittle Pharmaceuticals
discovered Oncotinib, which selectively inhibits mutated EGFR, significantly improving 5-
year survival rates for NSCLC patients, leading to remission in twice as many patients
compared to existing drugs.
PATENT No. IN '101
Dolittle Pharmaceuticals filed for a patent on Oncotinib in India in December 2014, receiving
it on January 1, 2018, and IN 6005101 (‘IN’ 101’), valid until December 2034. Similar
applications were made globally.
DOLITTLE'S COMMERCIALISATION OF ONCOTINIB

On 15th December 2018, Dolittle Pharmaceuticals obtained marketing approval for its NSCLC
treatment. Dolittle launched its tablets containing Oncotinib (20mg) in India on 10 th January
2019 under the brand name ‘MEDIOCRIS’. Dolittle sold MEDIOCRIS in strips of 10 tablets
at an affordable price of INR 60,000 per strip. Despite lower costs than alternatives, Dolittle
aimed to ensure wide patient access, prioritizing ethical pricing over excessive profits.
However, limited production capacity hindered meeting global demand.
AVARITIA'S COMMERCIALISATION OF ONCOTINIB

Avaritia Pharmaceuticals acquired Oncotinib from Dolittle Pharmaceuticals in a significant


deal, rebranding it as CARUS. Despite initially maintaining the same price, Avaritia swiftly
increased CARUS's cost in January 2020 to INR 2,00,000/- per strip and INR 3,00,000/- per
strip by January 2021. CARUS achieved blockbuster status, surpassing USD 1 billion in sales.
[8]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

However, this success sparked criticism from patients and non-profit organizations concerned
about the excessive pricing, hindering access to potentially life-saving drugs for many
individuals seeking cancer treatment, leading to widespread discontent.
HISTORY OF PROCEEDINGS

In January 2022, Mr. Ronit Halder could not afford CARUS at the market price and approached
the Competition Commission of India (CCI) under §19 of the Competition Act, 2002 alleging
that Avaritia’s excessive pricing of Oncotinib amounted to an abuse of dominant position.
Upon preliminary investigation, the CCI found sufficient grounds for further inquiry and tasked
the Director General (DG) to conduct a comprehensive investigation.
The DG's findings shed light on several critical aspects of Avaritia's practices:
(a) The DG determined that Oncotinib held a dominant position in the Indian market
for NSCLC treatment due to its unparalleled therapeutic efficacy, with no comparable
substitutes available. This lack of substitutes rendered consumers vulnerable to price
hikes without viable alternatives.
(b) Avaritia's contracts with distributors included “suggested minimum prices,” which
effectively discouraged selling below these thresholds. Distributors who breached these
agreements by offering discounts faced punitive measures, including contract
terminations. Such practices limited price competition and maintained artificially high
prices.
(c) The investigation revealed a significant disparity between Oncotinib's retail price
and its production costs. Despite minimal cost escalations, the retail price surged from
INR 60,000 to INR 3,00,000 per strip between May 2019 and January 2021. This
disproportionate increase underscored Avaritia's exploitation of its market dominance
to extract exorbitant profits.
(d) Avaritia's financial records reveal significant profits from CARUS sales in India,
surpassing INR 200 crores from May 2019 to March 2020 and exceeding 800 crores in
FY 2020-21, raising ethical concerns regarding its market exploitation and commitment
to affordable healthcare access.
(e) The DG did not delve into Avaritia's revenue or profits from international Oncotinib
sales, leaving a critical aspect of Avaritia's business practices unexplored.
Based on the DG’s findings, and upon hearing the parties at length, the CCI broadly agreed
with the DG and rendered a decision on 10th February 2023 holding:

[9]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

(a) The relevant market for analysis was the Oncotinib market in India due to uniform
competition conditions and lack of substitutes.
(b) Avaritia, holding the patent IN '101 covering Oncotinib, had a 100% market share,
indicating dominance.
(c) Pricing of Avaritia's CARUS was deemed excessive and unfair relative to
production costs, constituting an abuse of dominance.
(d) Avaritia's acquisition of patent rights from Dolittle for INR 500 crore resulted in
profits surpassing acquisition costs, justifying price reduction.
(e) Avaritia's patent rights didn't exempt it from competition laws.
(f) Agreements with distributors enforcing minimum prices constituted anti-
competitive resale price maintenance.
(g) CCI directed Avaritia to revert CARUS prices to May 2019 levels and cease resale
price maintenance, without imposing penalties.
The National Company Law Appellate Tribunal (NCLAT) reversed the Competition
Commission of India's (CCI) decision, asserting that the CCI lacked jurisdiction to intervene
in cases of patent abuse. Relying on a previous Delhi High Court ruling in Telefonaktiebolaget
LM Ericsson (PUBL) v. CCI, the NCLAT held that excessive pricing alone did not constitute
abuse of dominance without evidence of exclusionary conduct. Furthermore, the NCLAT
deemed Avaritia's agreements with distributors as legitimate exercises of patent rights, exempt
from scrutiny under competition law. Consequently, Ronit Halder appealed against the
NCLAT's ruling in the Supreme Court, with the CCI also participating in support of its original
decision. The case now awaits a final verdict from the Supreme Court.

[10]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

ISSUES RAISED

ISSUE 1

Whether the CCI had jurisdiction to investigate and take action against the impugned
conduct of Avaritia which were performed in exercise of patent rights over IN ‘101, or does
the Patents Act, 1970 preclude operation of The Competition Act, 2002 in matters involving
use of patent rights?

ISSUE 2

Whether a finding of abuse of dominant position based solely on excessive and unfair
pricing by a dominant player in the absence of exclusionary conduct sustainable?

ISSUE 3

Whether Avaritia’s pricing of its Oncotinib drug CARUS amounted to abuse of dominant
position?

ISSUE 4

Whether Avaritia’s agreements with its distributors were anti-competitive and violative of
§3 of The Competition Act, 2002?

[11]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

SUMMARY OF ARGUMENTS

CONTENTION 1: THAT THE CCI HAD NO JURISDICTION TO INVESTIGATE


AND TAKE ACTION AGAINST THE IMPUGNED CONDUCT OF AVARITIA
WHICH WERE PERFORMED IN EXERCISE OF PATENT RIGHTS OVER IN ‘101
AND THE PATENTS ACT, 1970 PRECLUDED OPERATION OF THE
COMPETITION ACT, 2002 IN MATTERS INVOLVING THE USE OF PATENT
RIGHTS.

The contention is argued before the Supreme Court. Firstly, it contends that patent law
supersedes competition law, citing the specificity of patent rights and the objectives of both
laws. Secondly, it argues that the impugned conduct falls within the exercise of patent rights,
exempting it from competition law scrutiny.

CONTENTION 2: THAT A FINDING OF ABUSE OF DOMINANT POSITION IS NOT


BASED SOLELY ON EXCESSIVE AND UNFAIR PRICING BY A DOMINANT
PLAYER IN THE ABSENCE OF EXCLUSIONARY CONDUCT SUSTAINABLE.

The argument contends that establishing abuse of a dominant position solely based on
excessive pricing without exclusionary conduct is not valid. It delineates the relevance of
defining the market, the criteria for assessing dominance, and the necessity of considering
exclusionary practices beyond pricing for determining abuse.

CONTENTION 3: THAT AVARITIA’S PRICING OF ITS ONCOTINIB DRUG


CARUS NOT AMOUNTED TO ABUSE OF DOMINANT POSITION.

CONTENTION 4: THAT AVARITIA’S AGREEMENTS WITH ITS DISTRIBUTORS


WERE NOT ANTI-COMPETITIVE AND NOT VIOLATIVE OF §3 OF THE
COMPETITION ACT, 2002.

The argument contends that Avaritia's agreements with distributors aren't anti-competitive
under Section 3 of the Competition Act, 2002. Firstly, it asserts that the agreements fall under
Section 3(5)(i) exceptions, protecting intellectual property rights. Secondly, it argues that the
agreements don't cause appreciable adverse effects on competition.

[12]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

ARGUMENTS ADVANCED

CONTENTION 1: THAT THE CCI HAD NO JURISDICTION TO INVESTIGATE


AND TAKE ACTION AGAINST THE IMPUGNED CONDUCT OF AVARITIA
WHICH WERE PERFORMED IN EXERCISE OF PATENT RIGHTS OVER IN ‘101
AND THE PATENTS ACT, 1970 PRECLUDED OPERATION OF THE
COMPETITION ACT, 2002 IN MATTERS INVOLVING THE USE OF PATENT
RIGHTS.

1. It is humbly submitted before the Hon’ble Supreme Court that the CCI had no
jurisdiction to investigate and take action against Avaritia's impugned conduct, which was
performed in the exercise of patent rights over IN ‘101 and the Patents Act, 1970 precluded
operation of The Competition Act, 2002 in matters involving the use of patent rights. This
contention is elaborated before this Hon’ble Court in a two-fold manner; [1.1] That Patent law
overrides competition law and [1.2] That the impugned conduct done by the respondent was
performed in the exercise of patent rights granted by the patent act.
[1.1] THAT PATENT LAW OVERRIDES COMPETITION LAW
2. A grant of Patent rights to a business entity confers the exclusive right to produce a
patented article or exercise the right of ownership over the protected process for a fixed
period of 20 years as per s. 53 3 of Patent Act, 1970. Further, India’s Competition law does
not prohibit dominance, unlike the erstwhile Monopolies and Restrictive Trade Practices
(MRTP) Act of 1969, but rather restricts the abuse of dominance per se.
3. It is hence settled that the specific sector should initially analyze the jurisdictional
aspects, that is the facts matrix of understanding of terms between the sides and thereon apply,
if applicable, its jurisdiction on priority. The Supreme Court had relied upon Carona Ltd v.
Parvathy Swaminathan4, and held ‘the fact or facts upon which the jurisdiction of a court, a
tribunal or an authority depends can be said to be a “jurisdictional fact”. At the instance of
such a fact, the court or authority has the jurisdiction to decide other issues, if it is not found
then such action ceases to exist as well. The Supreme Court also took into account Halsbury's
Law and further held, “the existence of a jurisdictional fact is a sine qua non or condition
precedent to the assumption of jurisdiction by a court or tribunal”.

3
The Patent Act, 1970 (Act 39 of 1970), s.53.
4
Carona Ltd. v. Parvathy Swaminathan, (2007) 2 RLR 481.
[13]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

1.1.1 That the doctrine of lex specialis derogat legi generali will apply
4. It is humbly submitted on behalf of the Respondent before this Hon’ble Court Lex
specialis is a Latin term derived from the legal maxim in the interpretation of laws, both in
domestic and international law: ‘lex specialis derogat legi generali’. This essentially means
that more specific rules will prevail over more general rules. 5
5. Moreover, this lex specialis derogat legi generali means special legislation such as
the Patent Act, 1970 would prevail over the Competition Act, 2002 which is a general law. 6
6. Patent Act and the Competition Law operate in entirely different fields, as per the
Preamble of the Patent Act, 1970 the objective behind the Patent law is to encourage scientific
research, new technology and industrial progress. 7 Furthermore, as per the Preamble of the
Competition Act 2002, the objective of competition law is to ensure economic growth and
consumer welfare.
7. In the Monsanto and the Ericsson cases, it was argued that the Patents Act, 1970 is self-
sufficient. Where an Act is a complete code, then the legislative intent is to govern all aspects
under the code itself. 8
8. In case of conflict between general law and special law, the special law will prevail. 9
In Ashoka Marketing Ltd. v. Punjab National Bank10, the court held that the special statute
would prevail over general law.
9. It is pertinent to note that this jurisdiction tussle has not only been observed between
the Competition Commission and Intellectual Property Office about also between the
Competition Commission and other Telecom sectors.
10. The Hon’ble Supreme Court laid down a mechanism in the Competition Commission
of India v. Bharti Airtel Ltd.11, to check conflicts between overlapping jurisdictions of a
sectoral regulator and the CCI. The Court holds that since the matter pertains to the telecom
sector, balance would be maintained if TRAI dealt with and decided on the jurisdictional
aspects, in the first instance. It is held that once findings are returned by the TRAI ‘which lead
to the prima facie conclusion that the IDOs have indulged in anti-competitive practices, the

5
“Lex specialis | How does law protect in war?” ICRC Casebook , available at:
[Link]
specialis#:~:text=This%20Latin%20term%20is%20derived,prevail%20over%20more%20general%20rules. (last
visited on January 20, 2024).
6
State of Punjab v The Labour Court, Jullundur and Others MANU/SC/0375/1979.
7
Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, (1979) 2 SCC 511.
8
Patel Brothers v. State of Assam and Ors. AIR 2017 SC 383.
9
Delhi Science Forum v. Union of India, (1996) 2 SCC 405.
10
Ashoka Marketing Ltd. v. Punjab National Bank, (1990) 4 SCC 406.
11
CCI v. Bharti Airtel Ltd., (2019) 2 SCC 521.
[14]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

CCI could be activated to investigate the matter going by the criteria laid down in the relevant
provisions of the Competition Act and take it to its logical conclusion. This balanced approach
in construing the two Acts would take care of Section 6012 of the Competition Act as well.
11. Moreover, the Hon’ble Supreme Court held in Gobind Sugar Mills Ltd. v. State of
Bihar13, that while determining the question of whether a statute is a general or a special one,
focus must be on the principal subject-matter coupled with a particular perspective with
reference to the intendment of the Act.
12. It is humbly submitted that in the present case, the issue pertained to the patent rights
of the respondent, Avaritia Pharmaceuticals Ltd. It completely falls within the jurisdiction of
the Patent Act, 1970. Further, Patent Act, 1970 has enough power to deal with concerns relating
to competition in the Patent monopoly.
1.1.2 That the doctrine of harmonious construction will apply
13. The doctrine of ‘harmonious construction’, in the present context, simply means that in
case of a conflict between two laws, their interpretation should be in a way in which the spirit
and essence of both laws are maintained, which is done by ‘harmonising’ the laws. One way
in which the Hon’ble SC has harmonised conflicting laws is by restricting the scope of broader
laws to make way for specific laws. The Hon’ble SC has also looked at the intent of the laws
in question to determine their applicability and has harmonised them to ensure that they are in
line with their legislative intent.14
14. The Hon’ble SC first applied the doctrine of harmonious construction in A.D.M.
Jabalpur15. Here, firstly the Hon’ble SC accepted the primacy of domestic law, and then opined
that municipal law should be constructed in a manner in which it harmonises with the
international law obligations of the State.
15. Moreover, the Hon’ble Apex Court in the case of maintaining harmonious construction
of the relationship between the CCI and TRAI states that the authority delegated to the CCI
should not be completely washed away. The jurisdiction of the Commission is not completely
ousted about the telecom sector but the jurisdiction of the CCI is pushed out to a later phase,
once the issue is decided by the TRAI. 16

12
The Competition Act, 2002 (Act 12 of 2003), s.60.
13
Gobind Sugar Mills Ltd. v. State of Bihar, (1999) 7 SCC 76.
14
Jerr Melet, “Harmonious Construction and the International Law Allegory in India” Cambridge Core
Blog (2022), available at: [Link]
international-law-allegory-in-
india/#:~:text=The%20doctrine%20of%20'harmonious%20construction'%2C%20in%20the%20present%20cont
ext,by%20'harmonising'%20the%20laws. (last visited on January 23, 2024).
15
ADM, Jabalpur v. Shivakant Shukla, (1976) 2 SCC 521.
16
Supra note 11 at 15.
[15]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

16. Moreover, in the landmark case of CIT v. Hindustan Bulk Carriers17, the Hon’ble
Supreme Court laid down five principles of the rule of harmonious construction: (1) the courts
must avoid a head-on clash of seemingly contradicting provisions and they must construe the
contradictory provisions; (2) the provision of one section cannot be used to defeat the provision
contained in another unless the court, despite all its efforts, is unable to find a way to reconcile
their differences; (3) when it is impossible to completely reconcile the differences in
contradictory provisions, the courts must interpret them in such a way so that effect is given
both the provisions as much as possible; (4) courts must also keep in mind that interpretation
that reduces one provisions to useless number or dead is not harmonious construction; and (5)
to harmonize is not to destroy any statutory provision or to render it fruitless.
17. Further, s. 6218 of Competition Act, 2002 read as “ The provisions of this Act shall be
in addition to, and not in derogation of, the provisions of any other law for the time being in
force.”
18. Section 62 of the Competition Act provides that the Act will not be in derogation of
any other statute and avoids any conflict with other statutes.
19. The Hon’ble Delhi High Court observed that “if there are irreconcilable differences
between the Patents Act and the Competition Act in so far as anti-abuse provisions are
concerned, the Patents Act being a special Act shall prevail”. 19
20. Moreover, in a recent case, the Hon’ble Delhi High Court held that the legislative
intent of the legislature was clear when they amended the Patents Act in 2003 (regarding
Chapter XVI) which was after the enactment of the Competition Act. The intent was to make
the Patents Act special legislation for dealing with matters relating to anti-competitive
agreements by patent holders. The Hon’ble Court also observed that Chapter XVI of the
Patents Act is in itself a complete code, and it is a subsequent legislation as compared to the
Competition Act. 20
21. In the present case, Patent Act, 1970 has the power to determine the rights and
obligations of the parties first. Wherein, statutes operate in different fields for different
purposes, it cannot be said that there is implied repeal by one. 21

17
CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57.
18
The Competition Act, 2002 (Act 12 of 2003), s.62.
19
Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India, 2016 SCC OnLine Del 1951.
20
Telefonaktiebolaget LM Ericsson (PUBL) and Ors. V. Competition Commission of India and Ors.
MANU/DE/4435/2023.
21
Haridas Exports v. All India Float Glass Manufacturers' Assn., (2002) 6 SCC 600.
[16]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

22. That in the light of the abovementioned submissions, it is humbly contended that the
Competition Act, 2002 has no jurisdiction as the Patent Act,1970 is a special law that overrides
Competition Law's jurisdiction on patent-related matters.
[1.2] THAT THE IMPUGNED CONDUCT DONE BY THE RESPONDENT WAS
PERFORMED IN THE EXERCISE OF PATENT RIGHTS GRANTED BY THE
PATENT ACT
23. It is humbly submitted before this Hon’ble Court the provision of the Competition
Act, 2002 which deals with Intellectual property rights is S. 3(5) 22 which excludes the
applicability of the Competition Act in respect of any agreement, which relates to restraining
infringement of any patent rights. The Court in the Monsanto case remarked that the rights
under S. 3(5) are not unqualified. It was also observed that only agreements that are necessary
for protecting any of his rights which have been or may be conferred upon him under the
specified statutes provided for the safe harbor under Sub-section (5) of Section 3 of the
Competition Act.
24. The CCI finds that IPRs create an appreciable adverse effect on competition (AAEC),
the Act provides for the possibility to bring action.
25. Allegations of anti-competitive practice by the patent holder are to be determined under
section 84(6)23 and section 90(1)(ix) 24 of the Patents Act. The CCI has no role to play in this
regard.
26. Section 84(4)25 of the Patents Act provides for ascertaining reasonably affordable price,
which exercise is to be carried out by the Controller. What is reasonable is to be ascertained in
the context of the various factors enumerated in the said provisions. These include factors such
as the existing trade or industry and established and developed commercial activities.
27. Moreover, the Hon’ble US Courts have repeatedly asserted that it is perfectly lawful
for a monopolist to charge whatever price that the market can bear. As early as 1979, the
Hon’ble Court of Appeals for the Second Circuit declared in Berkey Photo, Inc. v. Eastman
Kodak Co.26 that ‘[s]etting a high price may be a use of monopoly power, but it is not in itself
anticompetitive ... Judicial oversight of pricing policies would place the courts in a role akin
to that of a public regulatory commission’. The Hon’ble Court of Appeals for the Seventh

22
The Competition Act, 2002 (Act 12 of 2003), s. 3, cl.5.
23
The Patent Act, 1970 (Act 39 of 1970), s. 84, cl. 6.
24
The Patent Act, 1970 (Act 39 of 1970), s. 90, cl. 1.
25
Supra note 23, cl. 4.
26
Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 302 (CA2 1979).
[17]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

Circuit echoed this sentiment in Blue Cross v. Marshfield27 when it stated that [a] natural
monopolist that acquired and maintained its monopoly without excluding competitors by
improper means is not guilty of 'monopolizing' in violation of the Sherman Act... and can
therefore charge any price that it wants ... for the antitrust laws are not a price-control statute
or a public-utility or common-carrier rate-regulation statute.
28. Further, in the case of Scandlines Sverige v. Port of Helsingborg28, the commission
stated that:“[i]n the present case, the economic value of the product/service cannot simply be
determined by adding to the approximate costs incurred in the provision of this product/service
as assessed by the Commission, a profit margin which would be a pre-determined percentage
of the production costs. The economic value must be determined with regards to the particular
circumstances of the case and take into account also non-cost related factors such as the
demand for the product service.”
29. The respondent, Avaritia Pharmaceuticals Ltd.'s monopoly in the relevant market
cannot be cannot solely determined based on based on the profit margin and cost of production
non-cost related factors such as the demand for Oncotinib.
30. That in the light of the abovementioned submissions, it is humbly contended that the
impugned conduct done by the respondent was performed in the exercise of patent rights
granted by the Patent Act.
31. Therefore, it is humbly submitted that this Court may like to adjudge that CCI had no
jurisdiction to investigate and take action against the impugned conduct of Avaritia which was
performed in the exercise of patent rights over IN ‘101 and the Patents Act, 1970 precluded
operation of The Competition Act, 2002 in matters involving the use of patent rights, in the
interest of justice.
CONTENTION 2: THAT A FINDING OF ABUSE OF DOMINANT POSITION IS NOT
BASED SOLELY ON EXCESSIVE AND UNFAIR PRICING BY A DOMINANT
PLAYER IN THE ABSENCE OF EXCLUSIONARY CONDUCT SUSTAINABLE.
32. It is most respectfully submitted before this Hon’ble court that a finding of abuse of
dominant position based solely on excessive and unfair pricing by a dominant player in the
absence of exclusionary conduct is not sustainable. This contention is expounded upon in a
methodical manner, [2.1] that the market is relevant; [2.2] that the enterprise or a group is in a
dominant position in the relevant market; and [2.3] that the abuse of dominant position is not

27
Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic, 65 F.3d 1406 (7th Cir. 1995).
28
Scandlines Sverige AB v Port of Helsingborg [2006] 4 CMLR 23.
[18]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

solely based on excessive and unfair pricing by a dominant player in the absence of
exclusionary conduct.
[2.1] THAT THE MARKET IS RELEVANT
33. It is most humbly submitted that in order to determine whether an enterprise is abusing
its dominant position or not, it is necessary to determine whether the market is relevant in the
particular market wherein the enterprise was alleged to be in a dominant position.
34. U/s.2(r)29 of the Competition Act, 2002 states that “relevant market” means the market
which may be determined by the commission with reference to the relevant product market or
the relevant geographic market or with reference to both the markets.”
35. Any competition law inquiry involving the assessment of market power starts with the
identification of the relevant market. Defining the relevant market is the sine qua non in
assessing the market power/share of the violator in question. The concept of a relevant market
is inherently fluid. Without identification of the correct market definition, the market power of
the enterprise allegedly violating the law cannot be assessed. The application of competition
law is primarily concerned with problems that occur where one firm possesses, or will possess
after a combination, such as market power that has a possibility of limiting output, raising
prices, and depriving consumers of choice, which are clearly detrimental to consumer
welfare.30
36. U/s.19 (5)31 of the Competition Act, 2002 states that For determining whether a market
constitutes a “relevant market” for the purposes of this Act, the Commission shall have due
regard to the “relevant geographic market’’ and “relevant product market.”
37. Where, u/s 2(s)32 of the Competition Act, 2002 states that “relevant geographic
market” means a market comprising the area in which the conditions of competition for supply
of goods or provision of services or demand of goods or services are distinctly homogenous
and can be distinguished from the conditions prevailing in the neighbouring areas.” U/s 2(t)33
of the Competition Act, 2002 “relevant product market” means a market comprising all those
products or services which are regarded as interchangeable or substitutable by the consumer,
by reason of characteristics of the products or services, their prices and intended use.”
[2.2] ASSESSMENT OF DOMINANT POSITION IN THE MARKET
38. It is most humbly submitted that in order to establish that an enterprise is in a dominant

29
The Competition Act, 2002 (Act 12 of 2003), s. 2, cl. r.
30
Competition Commission of India, “Competition Law and Indian Pharmaceutical Industry” (July,2010).
31
The Competition Act, 2002 (Act 12 of 2003), s. 19, cl. 5.
32
The Competition Act, 2002 (Act 12 of 2003), s. 2, cl. s.
33
The Competition Act, 2002 (Act 12 of 2003), s. 2, cl. s.
[19]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

position, the Competition Commission of India examines the factors under s. 19(4) of the
Competition Act, 2002 along with the definition of dominance under Explanation (a) to Section
4(2).
39. U/s.4(2)34 Explanation (a) of the Competition Act, 2002 states that “dominant position”
means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which
enables it to— (i) operate independently of competitive forces prevailing in the relevant
market; or (ii) affect its competitors or consumers or the relevant market in its favour.
40. U/s 19 (4) of the Competition Act, 2002 “The Commission shall, while inquiring
whether an enterprise enjoys a dominant position or not under section 4, have due regard to all
or any of the factors mentioned in the section.
41. There are several examples of the CCI relying on s. 4(2) and s. 19(4) to establish the
dominant position of enterprises. In the case of Hoffmann-La Roche Ag v. Commission of
European Communities35, the court listed the following as relevant factors in determining the
existence of a dominant position which are similar to factors listed in s.19(4). Some of them
are the relationship between the market shares of the undertaking concerned and its
competition, the existence of a highly developed sales network, and the absence of potential
competition.
42. The underlying principle in defining a dominant position is linked to the concept of
market power which allows an enterprise to act independently of competitive constraints. Such
independence enables an enterprise to manipulate the relevant market in its favor to the
economic detriment of its competitors and consumers. 36
[2.3] THAT THE ABUSE OF DOMINANT POSITION IS NOT SOLELY BASED ON
EXCESSIVE AND UNFAIR PRICING BY A DOMINANT PLAYER IN THE
ABSENCE OF EXCLUSIONARY CONDUCT.
43. It is most humbly submitted before the Hon’ble court that a finding of abuse of
dominant position solely based on excessive and unfair pricing by a dominant player in the
absence of exclusionary conduct is not sustainable. Other factors are too essential for proving
abuse of dominant position mentioned therein s.4(2). Herein, the exclusionary conduct refers
to different exclusionary practices i.e. anticompetitive practices other than excessive pricing.
2.3.1 Exclusionary Practices
44. The term “exclusionary practice” refers to a form of anti-competitive conduct that

34
The Competition Act, 2002 (Act 12 of 2003), s. 4, cl. 2.
35
Supra note 16, at .16.
36
Shamsher Kataria v. Honda Siel Cars India Ltd., 2014 SCC OnLine CCI 95.
[20]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

forecloses a market to rivals (leading to their exit) or deters potential entrants from entering a
market. It is considered anti-competitive when it is used to maintain or strengthen market
power. The conduct also encompasses restrictions that do not force rivals to exit the market but
that may cause them significant disadvantages, for example, by impeding their expansion.37
45. The exclusionary acts may cause horizontal foreclosure and vertical foreclosure.
Exclusionary methods may consist of single-firm behavior such as the imposition of constraints
on rival conduct, predatory pricing, margin squeezing, tying and bundling, price
discrimination, exclusive dealing, fidelity discounts, and rebates, refusing to sell or supply,
refusing to provide interoperability information and refusing to license intellectual property
rights, among others. Exclusionary practices may also take the form of collective boycotts.],
Practice by a dominant company that tends to impair the opportunities of competitors based on
considerations other than competition on the merits. 38
2.3.2 Abuse
46. Section 4(2) of the Competition Act, 2002 lays down certain conditions or practices
which when used and practiced by an enterprise or a group, amounts to abuse of dominant
position. One of the practice among these is when an enterprise or a group imposes unfair price
for its goods or service.
47. The section lays down 5 sub points from s.4(2)(a) to s.4(2)(e). They are:
Section 4(2)(a) : It is further divided into two parts i.e. 4(2)(a)(i) and 4(2)(a)(ii). The section
reads:
48. There shall be an abuse of dominant position if an enterprise- (a) directly or indirectly,
imposes unfair or discriminatory— (i) condition in purchase or sale of goods or service; or (ii)
price in purchase or sale (including predatory price) of goods or service.
U/s 4(2)(a)(i)39 of the Competition Act 2002, “there shall be an abuse of dominant position
if an enterprise directly or indirectly imposes unfair or discriminatory condition in purchase
or sale of goods or services.” Herein, the term unfair or discriminatory determined on the basis
of the facts and circumstances of each case.
49. The Hon'ble Supreme Court in the case of HMM Ltd v Director General, Monopolies
and Restrictive Trade Practices Commission40, observed that for holding trade practice to be
unfair, it must be found that it causes loss or injury to the [Link] CCI held that since

37
Exclusionary practice (Concurrences) available at:
[Link] (last visited on March 1, 2022).
38
Id.
39
The Competition Act, 2002 (Act 12 of 2003), s. 4, cl. 2, cl. a, cl. i.
40
HMM Ltd v Director General, Monopolies and Restrictive Trade Practices Commission, (1998) 6 SCC 485.
[21]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

CIL through its subsidiaries operates independently of market forces and enjoys undisputed
dominance in the relevant market of production and supply of non-coking coal in India they
are in contravention of the provisions of section 4(2)(a)(i) of the Competition Act, 2002 for
imposing unfair/ discriminatory conditions in Fuel Supply Agreements (FSAs) with the power
producers for supply of non-coking coal.41
50. U/s 4(2)(a)(ii)42 of the Competition Act 2002, “there shall be an abuse of dominant
position if an enterprise directly or indirectly imposes unfair or discriminatory price in
purchase or sale (including predatory price) of goods or service.”
51. Section 4(2)(b) : It is further divided into two parts i.e. 4(2)(b)(i) and 4(2)(b)(ii). They
reads:U/s 4(2)(b)(i)43 of the Competition Act 2002, “there shall be an abuse of dominant
position if an enterprise production of goods or provision of services or market therefor.”U/s
4(2)(b)(ii) of the Competition Act 200244, “there shall be an abuse of dominant position if an
enterprise limits or restricts technical or scientific development relating to goods or services
to the prejudice of consumers.”U/s 4(2)(c)45 of the Competition Act 2002, “there shall be an
abuse of dominant position if an enterprise indulges in practice or practices resulting in denial
of market access [in any manner].”U/s 4(2)(d)46 of the Competition Act 2002, “there shall
be an abuse of dominant position if an enterprise makes conclusion of contracts subject to
acceptance by other parties of supplementary obligations which, by their nature or according
to commercial usage, have no connection with the subject of such contracts”U/s 4(2)(e)47 of
the Competition Act 2002, “there shall be an abuse of dominant position if an enterprise uses
its dominant position in one relevant market to enter into, or protect, other relevant market.”
52. To prove that an enterprise is in a dominant position and abusing its powers, these
sections are essential to be referred to verify if it so or not.
53. In the case of Nagarjuna Fertilizers and Chemicals Limited, Hyderabad v. Union of
India48, where court shared views that “Excessive pricing alone is not sufficient to establish an
abuse of dominant position;this includes an assessment of the market power of the dominant
firm, the effect of the pricing behavior on consumers, and whether there is any objective
justification for the pricing strategy employed by the firm. Therefore, a holistic approach is

41
M/s Maharashtra State Power Generation Company Ltd. and Ors. v. Coal India Ltd. and Ors., Case Nos. 03,
11 & 59 of 2012.
42
The Competition Act, 2002 (Act 12 of 2003), s. 4, cl. 2, cl. a, cl. ii.
43
The Competition Act, 2002 (Act 12 of 2003), s. 4, cl. 2, cl. b, cl. i.
44
Id., cl. ii.
45
The Competition Act, 2002 (Act 12 of 2003), s. 4, cl. 2, cl. c.
46
Id., cl. d.
47
Id., cl. e.
48
Nagarjuna Fertilizers and Chemicals Limited, Hyderabad v. Union of India, CP(IB) No. 524/9/HDB/2019.
[22]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

necessary to determine if there has been an abuse of dominance beyond just excessive pricing”.
54. Moreover, in the case, Air Canada and Others v. Secretary of State For Trade and
Another49, where House of Lords also established same precedents were it was stated that
“Excessive pricing alone is not sufficient to establish an abuse of dominant position; other
factors must also be considered in such cases. This principle highlights the importance of
evaluating a variety of factors beyond just pricing when determining if a dominant position has
been abused”.
55. Moreover, in the case of Anand Parkash Agarwal v Dakshin Haryana Bijli Vitran
Nigam and Ors50, the COMPAT held that while discriminatory pricing is not permissible under
section 4(2) of the Act, if there are any objective justifications or a ‘redeeming virtue’ for
different prices being charged from different consumers, it may not amount to discriminatory
pricing. The CCI held that the variation in pricing was authorised by virtue of section 62(4) of
the Electricity Act, based on the objective criteria of consumption.
56. Conclusively, it is most humbly submitted that a finding of abuse of dominant position
solely based on excessive and unfair pricing by a dominant player in the absence of
exclusionary conduct is not sustainable.
CONTENTION 3: THAT AVARITIA’S PRICING OF ITS ONCOTINIB DRUG
CARUS NOT AMOUNTED TO ABUSE OF DOMINANT POSITION.
57. It is respectfully submitted before this Hon’ble court that the pricing strategy employed
by Avaritia for the Oncotinib drug CARUS did not amount to abuse of dominant position. This
assertion is substantiated in three-fold manner; unfolding [3.1] that the relevant market is the
market for Oncotinib in India; [3.2] that Avaritia is in the dominant position in the relevant
market; [3.3] that Avaritia has not abused its dominant position under section 4 of the Act.
[3.1] THAT THE RELEVANT MARKET IS THE MARKET FOR ONCOTINIB IN
INDIA

58. It is most humbly submitted that in order to establish any enterprise as dominant it is
necessary to identify the relevant market. The objective of defining the relevant market is to
identify the actual competitors and to identify those who can place constraints on fair
competition. Relevant market can be determined with reference to ‘relevant product market’
and ‘relevant geographic market’.U/s.2(r) of the Competition Act, 2002 states that “relevant
market” means the market which may be determined by the commission with reference to the

49
Air Canada and Others V Secretary of State For Trade and Another, [1983] 2 WLR 494.
50
Anand Parkash Agarwal v. Dakshin Haryana Bijli Vitran Nigam, 2017 SCC OnLine Comp AT 85.
[23]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

relevant product market or the relevant geographic market or with reference to both the
markets;

59. In Standard Oil Co. of California and Standard Stations Inc. v. United States51, the
US. Supreme Court defined relevant market' as "the area of effective competition, within which
the defendant operates.

60. The purpose of defining the 'relevant market' is to assess with identifying in a systematic
way the competitive constraints that undertakings face when operating in a market. The concept
of relevant market implies that there could be an effective competition between the products
which form part of it and this presupposes that there is a sufficient degree of interchangeability
between all the products forming part of the same market insofar as specific use of such product
is concerned. 52 Therefore, assessment of dominance is to be preceded by delineation of the
correct relevant market in which dominance of the enterprise under consideration is to be
assessed. 53

61. In consequence, it is submitted that firstly, [3.1.1] that the relevant geographic market
is the Republic of India and secondly, [3.1.2] that the relevant product market is the market for
Oncotinib in India.

3.1.1 The relevant geographic market is the Republic of India

62. The relevant geographic market comprises the area in which the undertakings
concerned are involved in the supply and demand of products or services, in which the
conditions of competition are sufficiently homogeneous and which can be distinguished from
neighboring areas because the conditions of competition are appreciably different in that area.54

63. Moreover, in the case of United Brands case55 it was held that “the opportunities for
competition under article 86 of the treaty must be considered having regard to the particular
features of the product in question and with reference to a clearly defined geographic area in
which it is marketed and where the conditions of competition are sufficiently homogeneous for
the effect of the economic power of the undertaking concerned to be able to be evaluated”.

51
Standard Oil Co of California and Standard Stations v. United States, 1949 SCC OnLine US SC 77.
52
Competition Commission of India v. Co-ordination Committee of Artists and Ors. AIR 2017 SUPREME
COURT 1449.
53
GKB Hi-Tech Lenses Put Ltd v Transitions Optical India Put Ltd, Case No 01/2010, decided on 16 May 2012.
54
European Commission, ‘Notice on the Definition of Relevant Markets for the Purposes of Community
Competition Law’ (Commission’s Notice, 1998).
55
Supra note 52, at 25.
[24]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

64. Moreover, in the case of GlaxoSmithKline Services Unlimited v. Commission of the


European Communities56 as regards to the relevant geographic market, the CFI endorsed that
Commission’s view that for defining relevant geographic market it must be considered to be
the national market, owing, in particular, to the existence in the Member States of the
Community of different price and reimbursement regulations, different brand and packing
strategies, different distribution systems and different prescribing habits. Thus in defining the
relevant geographic markets in the pharmaceutical context, regard can be had to disease burden
(effective demand), conditions of sale (licensing and other legal or technical constraints);
effectiveness and substitution by a drug procurement system; availability of other cheaper
avenues for medication; etc.

65. U/s 19 (6) The Commission shall, while determining the “relevant geographic market”,
have due regard to all or any of the following factors, namely:— (a) regulatory trade barriers;
(b) local specification requirements; (c) national procurement policies; (d) adequate
distribution facilities; (e) transport costs; (f) language; (g) consumer preferences; (h) need for
secure or regular supplies or rapid after-sales services.

66. Based on these factors, particularly the lack of substantial regulatory barriers, the
presence of adequate distribution facilities, uniform consumer preferences, and the need for
regular supplies across the country, the Competition Commission of India (CCI) concluded
that the relevant geographic market in this case is the market for Republic of IndiaIn the Indian
context, it is unlikely that drug procurement can sufficiently alter conditions in the relevant
market. However, drug procurement by state authorities may constrain the demand for
pharmaceutical products. But this is more often than not the case with government procurement
in India. In terms of consumer preferences, not much of a difference may be found in terms of
thus in the context of pharmaceuticals the relevant geographic market would mean national
markets unless there is huge variation in prices due to local procurement schemes by the
government.57

67. In the present case, Avaritia is a company incorporated under the laws of India with the
register office in Mumbai, Maharashtra. Moreover, the facts matrix revolves around Avaritia’s
impugned conduct within the territory of India. Therefore, in light of the above submission, the
relevant geographic market should be restricted to the Republic of India.

56
GlaxoSmithKline Services Unlimited v. Commission of the European Communities C-501/06 P.
57
Competition Commission of India, “Competition Law and Indian Pharmaceutical Industry” (July,2010).
[25]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

3.1.2 That the relevant product market is the market for Oncotinib in India

68. Relevant product market comprises all those products and/or services which are
regarded as interchangeable or substitutable by the consumer, by reason of the products'
characteristics, their prices and their intended use.58

69. U/s 19(7) The Commission shall, while determining the “relevant product market”,
have due regard to all or any of the following factors, namely:— (a) physical characteristics
or end-use of goods; (b) price of goods or service (c) consumer preferences; (d) exclusion of
in-house production; (e) existence of specialised producers; (f) classification of industrial
products.

70. It is submitted that in the present case the relevant product market is the market for
Oncotinib in India by referring to the factors mentioned in 19(7). They are: a) Physical
characteristics or end-use of goods: The end-use of the product in question, Oncotinib
(marketed as CARUS by Avaritia), is for the treatment of non-small cell lung cancer (NSCLC).
The findings state that Oncotinib is a novel molecule with significantly higher therapeutic
efficacy in treating NSCLC compared to other available drugs. b) Price of goods or service:
The pricing of CARUS is a crucial factor in this case. The findings indicate that Avaritia
initially sold CARUS at INR 60,000 per strip, but later increased the price significantly to INR
2,00,000 per strip in January 2020, and further to INR 3,00,000 per strip in January 2021. c)
Consumer preferences: The consumer preferences in this case are driven by the need for an
effective treatment for NSCLC. The findings suggest that due to Oncotinib's superior efficacy
and lack of reasonable substitutes, consumer preferences are likely to be skewed towards
CARUS, despite its high pricing. e) Existence of specialised producers: The findings indicate
that Avaritia is the only specialised producer of Oncotinib (CARUS) in the relevant market, as
it holds the patent rights (IN '101) covering the molecule and its formulations. f) Classification
of industrial products: Oncotinib (CARUS) is a pharmaceutical product, specifically an
oncology drug used for the treatment of NSCLC. This classification as a specialized medical
product is relevant in defining the relevant product market.

[3.2] THAT AVARITIA IS IN A DOMINANT POSITION

58
European Commission’s ‘Notice on the Definition of Relevant Markets for the Purposes of Community
Competition Law’ (Commission’s Notice, 1998).
[26]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

71. In order to establish that an enterprise is in a dominant position, the Competition


Commission of India determines it through s.4(2) Explanation (a) and examines the factors
under Section 19(4) of the Competition Act, 2002.

72. A dominant position is a market controlling position, capable of driving competing


business from the market and also of dictating price. It is a power of controlling prices or
unreasonably restricting competition. The material consideration in determining whether
dominance exists is not that prices are raised and that competition is actually excluded, but that
power exists to raise prices or to exclude competition when it is desired to do so. 59

73. Here, Avaritia is in a position of strength in the relevant market in India and operates
independently of other competitors in the relevant market and is able to affect its competitors
or consumers or the relevant market in its favour. U/s 19 (4) “The Commission shall, while
inquiring whether an enterprise enjoys a dominant position or not under section 4, have due
regard to following factors:

74. Market share of the enterprise: An indirect assessment of dominance is through the
market share of the enterprise in the relevant market. Though the importance of market share
may vary from market to market, nevertheless, market share indicates the position of strength
of the enterprise to some extent.60

75. The CCI found that since IN ‘101 covered Oncotinib and its formulations, and Avaritia
had not licensed the patent to any other party within India, Avaritia had 100% market share as
a result in the relevant market for Oncotinib in India.

76. Size and resources of the enterprise: Avaritia itself, or through its subsidiaries and
related companies, operates in over 30 countries, and its drugs are sold to millions of consumers
across the world. Avaritia boasts of a large portfolio of patents in India and other countries over
novel active pharmaceutical ingredients (‘APIs’), formulations, processes of manufacture of
drugs, and drug delivery systems. Thus, it proves that Avaritia is a large and global enterprise
and have abundance of resources.

77. The capital stock, equity capital and other financial resources of an enterprise,
especially to hold a convenience of access to the financial markets like loanable and capital

59
American Tobacco Co. v. United States, 328 US 781.
60
Sudhanshu Kumar, S M DUGAR GUIDE TO COMPETITION ACT, 2002 (LexisNexis, Haryana, 8th edn.,
2022).
[27]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

markets, gives it a liberty to make a decision and to behave easily. 61 Through this liberty, the
enterprise enjoys dominant position.

78. Size and importance of the competitors: Avaritia’s competitor Dolittle


Pharmaceuticals Pvt. Ltd. (‘Dolittle’) is an innovation-driven, family-held, small-scale
pharmaceutical company incorporated under the laws of India and its operations are limited to
India. It did not have the production capacity to meet the demand of the drug in India and it did
not have necessary capital to increase production to meet Indian and global demand. This
proves that Avaritia do not have large-scale competitor which ultimately proves that the
enterprise enjoys a dominant position.

79. Economic power of the enterprise including commercial advantages over


competitors: Avaritia is a global enterprise with great economic power which is inferred from
the facts that it operates in more than 30 countries and; that it made a 500 crore deal with
Dolittle purchasing all the patent rights as well as applications and other authorizations
necessary to manufacture and commercialize Oncotinib globally. Whereas, its competitor
Dolittle was a small-scale company and did not have the production capacity to meet the
demand of the drug in India and it did not have necessary capital to increase production to meet
Indian and global demand.

80. Dependence of consumers on the enterprise: A consumer dependence rate on the


enterprise increases when there are no clear and reasonable [Link] to any other
drug available in the market, there existed no reasonable substitutes for Oncotinib. The DG
also found that a small but significant and permanent increase in price of Oncotinib would not
lead consumers to shift to other substitutes. Due to this amount of dependence of customers on
Oncotinib and no other close substitutes in the market, Avaritia enjoys dominant position.

81. Entry barriers including barriers such as regulatory barriers, financial risk, high
capital cost of entry, marketing entry barriers, technical entry barriers, economies of
scale, high cost of substitutable goods or service for consumers: The patent IN ‘101 covered
Oncotinib and its formulations, and therefore the patentee, Avaritia, was able to prevent any
other party from entering into the relevant market. Avaritia had also not licensed the patent to
any other person within India. Thus, IN ‘101 acted as a legal barrier to entry. Thus concluding
that Avaritia enjoyed a dominant position in the relevant market.

61
HT Media Ltd v. Super Canettes Industries Ltd, 2014 Comp LR 129 (CCI).
[28]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

82. In Hoffmann-La Roche Ag v. Commission of European Communities62, the court


listed the following as relevant factors in determining the existence of a dominant position
which are similar to factors listed in s.19(4). Some of them are the relationship between the
market shares of the undertaking concerned and its competition, the existence of a highly
developed sales network, and the absence of potential competition.

83. Hence, it is most humbly submitted that Avaritia is in the dominant position in the
relevant market for Oncotinib in India.

[3.3] THAT AVARITIA HAS NOT ABUSED ITS DOMINANT POSITION UNDER
SECTION 4 OF THE ACT

84. It is humbly submitted that Avaritia has not abused its dominant position through
pricing of its Oncotinib drug CARUS and this assertion would be deemed correct through
proving [3.3.1] that Avaritia have patent rights protecting the enterprise; and [3.3.2] that
Avaritia has not violated s.4(2).

[3.3.1] That Avaritia have patent rights protecting the enterprise

85. Avaritia enjoys patent rights over IN ‘101 and have protection of rights under
s.3(5)(i)(b) that reads as: “Nothing contained in this section shall restrict 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 the Patents
Act, 1970 (39 of 1970).”

In the recent case of Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission


of India (2023), the Delhi High Court held that the Competition Commission of India (CCI)
does not have the jurisdiction to investigate and impose penalties for excessive pricing or other
alleged abuses of dominance arising solely from the exercise of patent rights. The Court held
that the Patents Act, 1970, and the Competition Act, 2002, operate in different domains, and
the former provides statutory exceptions to the latter in matters involving the use of patent
rights. Further, the Court by assessing the maxim generalia specialibus non derogant and lex
posterior derogat priori, ruled that the Patents Act must prevail over the Competition Act on
the issue of exercise of rights by a patentee under the Patents Act. Moreover, it held that CCI
does not have jurisdiction to investigate or prevent abuse of patent monopoly. This places
patent power and rights over competition laws.

62
Supra note 16, at 16.
[29]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

[3.3.2] That Avaritia has not violated s.4(2)


Section 4(2) lays down certain conditions which provides that “there shall be an abuse of
dominant position if an enterprise-
(a) directly or indirectly imposes unfair or discriminatory
[i] condition in purchase or sale of goods or services
[ii] price in purchase or sale (including predatory price) of goods or service.
(b) limits or restricts—
(ii) technical or scientific development relating to goods or services to the
prejudice of consumers
(c) indulges in practice or practices resulting in denial of market access

Patent Rights and Dominance: Avaritia's dominant position in the relevant market for
Oncotinib in India is solely derived from its patent rights over IN '101. As held in
Telefonaktiebolaget LM Ericsson (PUBL) v. CCI, the CCI does not have jurisdiction to
investigate or regulate conduct arising solely from the exercise of patent rights, as the
Patents Act, 1970, prevails over the Competition Act, 2002, in such matters.

No Violation of Section 4(2): Section 4(2) prohibits the abuse of a dominant position by an
enterprise. However, in the present case, Avaritia's conduct, including its pricing strategy
for CARUS, is a legitimate exercise of its patent rights over Oncotinib. The high pricing
reflects the value addition and therapeutic benefits of the patented drug and is a legitimate
reward for Avaritia's innovation.

No Exclusionary or Anti-Competitive Conduct: Avaritia's pricing strategy, while high, does


not constitute exclusionary or anti-competitive conduct. The high prices are a result of the
legal monopoly conferred by the patent and do not restrict competition in the market, as
there are no substitute products available.

CONTENTION 4: THAT AVARITIA’S AGREEMENTS WITH ITS DISTRIBUTORS


WERE NOT ANTI-COMPETITIVE AND NOT VIOLATIVE OF §3 OF THE
COMPETITION ACT, 2002.
86. It is humbly submitted before the Hon’ble Supreme Court that Avaritia’s agreements
with its distributors were not anti-competitive and not violative of Section 3 of the Competition
Act, 2002. This contention is elaborated before this Hon’ble Court in a two-fold manner; [4.1]

[30]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

That the agreement would fall under the exception Section 3 (5)(i) of the Competition Act,
2002; and [4.2] That the agreement is not causing AAEC
[4.1] THAT THE AGREEMENT WOULD FALL UNDER THE EXCEPTION
SECTION 3(5)(i) OF THE COMPETITION ACT, 2002
87. Section 3(5)(i)63 of the Act provides exemption, from the adverse effect of Section 3,
to 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 conferred upon him under:
(a) the Copyright Act, 1957;
(b) the Patents Act, 1970;
(c) the Trade and Merchandise Marks Act, 1958 or the Trade Marks Act, 1999;
(d) the Geographical Indications of Goods (Registration and Protection) Act. 1999;
(e) the Designs Act, 2000;
(f) the Semi-conductor and Integrated Circuits Layout-Design Act, 2000.
88. The effect of Section 3(5) is that the entire Section 3 dealing with prohibition of anti-
competitive agreements will not apply where the owner of any of the intellectual property rights
under the enactments set out in Section 3(5)(a) to (f) does anything in the exercise of his right
to restrain the infringement of any of those rights, or imposes reasonable conditions as may be
necessary for the protection of any of those rights.64
89. An owner of an intellectual property right, be it a patent or copyright, etc: may stipulate
only conditions that are towards imposing a restraint on the infringement of his right conferred
by the relevant Act. He may also impose reasonable conditions that are necessary for the
protection of such rights.65 To determine whether the exemption under the section is available,
it is pertinent to see that the requirements granting the particular IPR are satisfied. 66
90. Moreover, u/s Section 48 of the Patent Act gives the patent holder the 'exclusive right'
to exclude a third party from making, using, supplying, selling, producing, etc. This creates the
right to self-determination in addition to the invention/product/process that is patented.
Therefore, any activity that infringes such independence may be considered an infringement.
Further, the exemption includes precautionary or preemptive steps taken to prevent

63
The Competition Act, 2002 (Act 12 of 2003), s. 3, cl. 5, cl. i.
64
Shri Justice N. Rajagopala Ayyangar, “Report on the revision of the revision of the patents law” (September,
1959), available at:
[Link] (last
visited on January 29, 2024).
65
FICCI - Multiplex Association of India v. United Producers, 2011 SCC OnLine CCI 33.
66
Supra note 23, at 16.
[31]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

infringement of IPR.67 In cases of patent infringement, the patent holder has the right to sue the
infringement to obtain compensation and compensation for the damages. 68
91. The imposition of reasonable conditions under the section must be necessary to protect
the IPRs of the IP holder.69 The reasonable conditions are necessary when the absence of such
conditions would mean that the IP holder is unable to protect its rights. 70
92. The protection of the commercial interests of a firm when it is being attacked is
legitimate.71 Further, the protection of commercial interests also entails the protection of the
IPR of the Enterprise. 72
93. In the present case, Avaritia's agreements with distributors, Avaritia acquired patent
rights over Oncotinib from Dolittle. Avaritia's agreements aimed to distribute the drug globally
under its brand name CARUS.” These agreements were essential for safeguarding Avaritia's
patent rights and guaranteeing sufficient returns on its investment in obtaining the patent, even
though they only established a “suggested minimum price.”
[4.2] THAT THE AGREEMENT IS NOT CAUSING AAEC
94. Section 3(1) of the Competition Act, 2002 does not define what an anti-competitive
agreement is but has only provided that an agreement (concerning production, supply,
distribution, storage, acquisition, or control of goods or provision of services) that causes or is
likely to cause an appreciable adverse effect on competition within India is prohibited and has
declared that such an agreement is void.
95. Section 19(3)73 of the Competition Act 2002, specifies what factors are to be taken into
consideration by the Competition Commission of India (CCI) in determining whether an
agreement has an appreciable adverse effect on competition under Section 3: The Commission
shall, while determining whether an agreement has an appreciable adverse effect on
competition under Section 3, have due regard to all or any of the following factors, namely—
(a) creation of barriers to new entrants in the market; (b) driving existing competitors out of
the market; (c) foreclosure of competition by hindering entry into the market; (d) accrual of
benefits to consumers; (e) improvements in production or distribution of goods or provision of

67
K Sera Sera Digital Cinema Ltd. v. Pen India Ltd., 2017 SCC OnLine CCI 31.
68
Saumya Kumar Singh and Prashant Shivam, “PATENT LAWS AND THEIR SERVICE FOR IP RIGHTS”
Articles – Manupatra (2022) available at: [Link]
THEIR-SERVICE-FOR-IP-RIGHTS (last visited on February 22, 2024).
69
Atos Worldline India Pvt. Ltd. v. Verifone India Sales Pvt. Ltd., 2015 SCC OnLine CCI 57.
70
Supra note 23, at 16.
71
United Brands Company and United Brands Continental BV v. Commission of the European Communities,
(1978) ECR II-207.
72
Kapoor Glass Pvt. Ltd. v. Schott Glass India Pvt. Ltd., 2012 SCC OnLine CCI 17.
73
The Competition Act, 2002 (Act 12 of 2003), s. 19, cl. 3.
[32]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

services; (f) promotion of technical, scientific and economic development by means of


production or distribution of goods or provision of services.
96. The effect on competition should be examined as an action in the backdrop of all the
factors mentioned in s.19(3) of the Act. Any presumption of AAEC is rebuttable and not
conclusive.74 Therefore, the conduct of the parties, which is not restrictive in nature, is not
prohibited.75
4.2.1 The agreement does not drive out existing competition
97. It is humbly submitted that the negative factor is driving out existing competitors from
the market.76 In the present case, Avaritia has entered into an agreement with distributors for
the supply of CARUS in the market which is not used by any other player in the market.
98. Further, even after the alleged exclusive distribution agreement between Avaritia and
distributors of the drug by suggesting a minimum price within which they will sell the drug.
As a result, simply charging a minimum price for the drug does not drive out the existing
competition from the market.
4.2.2 There is no foreclosure of competition
99. The last negative factor is the foreclosure of competition in the market.77 Foreclosure
of competition occurs when the agreement between two enterprises affects the ability of their
competitors to enter the market or expand their market share. 78
100. Moreover, in case of ESYS Information Technologies Pvt Ltd v Intel Corporation &
Ors79,the CCI dismissed section 4 claims based on Intel’s distribution agreements in part
because ‘the distributors of intel products are not precluded from dealing in the products of its
competitors and in fact they were found dealing in the competing products’ and therefore ‘there
is no question of foreclosure of market for the competitors of Intel’.
101. In the present case, the report submitted by the Ld. Director General dated 1 st October
2022 is persuasive in nature. Moreover, Ld. Director General has not considered various other
factors while calculating the market share of Avaritia. Moreover, there were existing
competitors in the market who were selling other drugs that could increase the survival rate of
NSCLC patients, despite the agreement.
102. Therefore, there is no foreclosure of the market. Hence, the agreement does not have a

74
Santuka Associates Pvt. Ltd. v. All India Organization of Chemists and Druggists, 2013 SCC OnLine CCI 14.
75
Cartelisation in the supply of Bearings (Automotive and Industrial), In re, 2021 SCC OnLine CCI 54.
76
The Competition Act, 2002 (Act 12 of 2003), s. 19, cl. 3, cl a.
77
Id. cl b.
78
Peter Roth QC, BELLAMY & CHILD: EUROPEAN UNION LAW OF COMPETITION 497 (OUP 2018).
79
ESYS Information Technologies Pvt Ltd v Intel Corporation & Ors, Case No. 48/2011.
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MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

negative impact on the market.


4.2.3 That the respondent has not violated Section 3(4)(d) of the Competition Act, 2002
103. Section 3(4) of the Act envisages an agreement between enterprises or persons at
different stages or levels of the production chain in different markets. In common parlance of
international competition laws, this nature of agreements is called "vertical restraints”.
104. Section 3(4)(d) reads as: “Any agreement amongst enterprises or persons at different
stages or levels of the production chain in different markets, in respect of production, supply,
distribution, storage, sale or price of, or trade in goods or provision of services, including—
(d) refusal to deal;”
105. The section means any agreement that restricts, by any method the person or classes of
persons to whom goods are sold or from whom goods are brought. However, under certain
circumstances, such conduct may attract the provisions of the Act which will depend on a case-
to-case basis.
106. “The provision does not restrict the right of the trader or manufacturer engaged in an
entirely private business, freely to exercise his own independent discretion as to the parties
with whom he will deal unless the purpose is to create or maintain monopoly.” 80
107. It is open to a manufacturer to devise its market policy in such a way as to be able to
compete effectively with other manufacturers.81 The policy of a manufacturer for appointing a
limited number of dealers, distributors or wholesalers in a particular area for marketing the
goods is not refusal to deal so long as there is nothing in the agreement with them precluding
appointment of other dealers.82 In other words, to suit one's own business requirements, such
number of dealers, as deemed expedient, may be appointed or dealers may not be appointed
for certain areas at all, wherein marketing of goods may be undertaken by the manufacturer
himself. 83 Such a measure would not amount to a refusal to deal with any dealer who is not
appointed for the distribution of products or supply of services. Likewise, termination of a
dealership on grounds of poor performance of a dealer 84 or because of shady dealing or
improper conduct of a dealer 85 would not be tantamount to a refusal to deal. Termination of the
distributorship, as a punitive action by the manufacturer for the distributor's failure to comply
with the condition of minimum off-take, contained in the distributorship agreement, does not

80
US v. Coalgure and Co, 250 US 300.
81
Re Bombay Footwear Pvt Ltd, RTP Enquiry No. 1/1984, Order dated 19 March 1985.
82
Gulshan Rai Jain & Sons v Rohtas Industries Ltd, RTP Enquiry No. 86/1984, Order dated 23 August 1984.
83
Re Colgate Palmolive (India) Ltd, RTP Enquiry 90/1986, Order dated 16 February 1987.
84
Re Usha International Ltd, RTP Enquiry No. 15/1984, Order dated 1 April 1986.
85
Re Voltas Ltd, RTP Enquiry No. 14/1987, Order dated 22 July 1987.
[34]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

amount to refusal to deal.86


108. In the present case, has entered into an agreement with the distributors of the drug,
namely Oncotinib. It is humbly submitted that the termination of the dealership for not
complying with the ‘suggestive minimum price’ is justifiable and does not violate s.3(4)(d) of
the Competition Act, 2002. Avaritia has the patent right to deal with dealers of their choice and
impose conditions in order to prevent infringement of their patent rights.
109. That in the light of the abovementioned submissions, it is humbly contended that
Avaritia’s agreements with the distributors do not cause an appreciably adverse effect on
competition in the relevant market.
110. Therefore, it is humbly submitted on behalf of the Petitioners side that this Court may
like to adjudge that Avaritia’s agreements with its distributors were not anti-competitive and
not violative of s.3 of the Competition Act, 2002, in the interest of justice.

86
Re Tata Iron & Steel Co Ltd and Indian Tube Co Ltd, RTP Enquiry No. 39/1984, Order dated 23 September.
[35]
MEMORANDUM ON BEHALF OF THE RESPONDENT
2ND CCI DEPARTMENT OF LAWS NATIONAL MOOT COURT COMPETITION 2024

PRAYER

In light of the facts of the case, issues raised, arguments advanced and authorities cited, the
Counsel on behalf of the Respondent humbly prays before the Hon’ble Supreme Court of India
to kindly adjudge, direct and declare that:

a) To dismiss the petition.


b) To grant any such relief/compensation as per this Court’s discretion.

AND/OR

Pass any other order which the bench deems fit in the best interest of Justice, Equity and Good
Conscience, and for this act of kindness, the Counsel on behalf of the Respondent as in duty
boundshall forever pray.

All of which is respectfully submitted

Sd/-

Counsel for Respondent

[36]
MEMORANDUM ON BEHALF OF THE RESPONDENT

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