The paradigm of interface between the Intellectual Property Rights (IPRs) and Competition law is that the two legal regimes are interconnected by the economics of fostering innovation and a convoluted web of legal policies that seek to stabilize the scope and effect of each policy. There exists a common area wherein Competition policy and Intellectual Property Law aim at nurturing innovation, effectiveness, consumer welfare and economic growth.
The interface between the two, Competition policy and Intellectual Property Law has been examined from two main aspects: (i) the effect that the Intellectual Property Rights have in shaping the disciplines of competition law; and (ii) the application of competition law on the post-grant use of IPRs.
Intellectual Property Rights act as an institutional regulatory framework restricting, usually as an exemption, pure exclusion of restraints by competition law. The Competition Act, 2002 (India) under section 3- outlines that its provisions will not 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 various IPR statutes. Nonetheless, the Competition Act does draw the line insofar as it does not permit unreasonable conditions to be passed off under the guise of protecting IPRs. Thus, in principle, IPR licensing arrangements which interfere with the Competition law policies such as competitive pricing, quantities, qualities of products or abuse of the dominant position whatever be the source of such practices would fall foul of latter in India.