tc24 R Moot Court Memorial For Mandatory Moot Court Subject in Final Year of Law School
tc24 R Moot Court Memorial For Mandatory Moot Court Subject in Final Year of Law School
IN THE MATTERS OF
VS.
i|P age
TABLE OF CONTENTS
[ISSUE 1] Burgin & Burkes Inc has not abused its dominant position by tying its
proprietary apps to the license of Phoenix OS .................................................................
1.1Burgin & Burkes Inc. is a player in the relevant market of Operating Systems for
Handheld devices. ........................................................................................................... 14
[A]. Burgin & Burkes Inc. is dominant player in the OS for handheld devices............ 15
[B]. Holding a dominant position is not prohibited by law .......................................... 15
1.2 Pre-installed apps are not equivalent to exclusivity. ................................................... 16
1.3 The tying agreement passes the Rule of reason test .................................................... 16
[ISSUE 2] Burgin & Burkes Inc did not abuse its dominant position by foreclosing
access to the market for ‘forked’ OS developers ..............................................................
2.1 Burgin & Burkes Inc. is a new entrant in the market of ‘Apps for handheld devices’
and is not leveraging its position in the OS market. ......................................................... 18
[A]. Burgin & Burkes Inc is a new entrant in the apps market ................................... 19
[B]. Burgin & Burkes Inc did not leverage its position in OS market to monopolize
apps market. .................................................................................................................... 20
2.2 Burgin & Burkes Inc. has not undertaken predatory behaviour .................................... 21
[A]. Pricing strategy of Burgin & Burkes Inc is not anti-competitive................. 22
[B]. The presence of Network effect mandates the use of pricing strategy .................. 23
2.3 The strategy was undertaken for consumer welfare. ..................................................... 24
Page 1
[ISSUE 3] Burgin & Burkes Inc has not abused its dominant position by refusing to
grant Stark Industries access to the database it has created for Accio ..........................
3.1 Search Data is not a market and therefore there cannot be an abuse ......................... 25
3.2 Alternatively, Burgin and Burkes did not abuse its dominant position ........................ 26
[A] Denial of access to database was not abuse of dominant position under Section 4 of
[ISSUE 4] CCW does not have the jurisdiction to decide on the issue of access to
Burgin & Burkes Database and Algorithm .....................................................................
3.1 Database is entitled to the protection of Intellectual Property laws of Westeros ......... 30
[A] Registration of copyright is not mandatory ............................................................. 30
[B] Database developed by Burgin & Burkes Inc. is a copyright under the Copyright
Act................................................................................................................................... 30
3.2 The CCW lacks the jurisdiction to grant compulsory licenses to materials protected
under the intellectual property laws of Westeros .............................................................. 31
[A] Compulsory licensing hampers competition ............................................................ 32
[B] The CCW lacks jurisdiction to grant compulsory licenses ........................................ 33
8. PRAYER ............................................................................................................................... 35
Page 2
INDEX OF AUTHORITIES
INDIAN CASES
1. Basti Sugar Mills Co. Ltd. v. State of U.P. & Anr., AIR (1979) SC 262 ------------------------ 30
2. Bharti Airtel Ltd v. Reliance Industries Ltd., Case No. 03 of 2017 (CCI).---------------------- 19
3. Bharti Airtel Ltd. v. Reliance Industries Limited & Reliance Jio Infocomm Ltd. (Case No. 03
of 2017) CCI-------------------------------------------------------------------------------------------- 12
4. Burakar Coal Co. Ltd. v. Union of India, AIR 1961 SC------------------------------------------- 19
5. Burlington Home Shopping Pvt Ltd. v. Rajnish Chibber, 61 (1995) DLT 6 -------------------- 23
6. Chairman, Thiruvalluvar Transport Corporation v. Consumer Protection Council, (1995) 2
SCC 479------------------------------------------------------------------------------------------------- 30
7. Competition Commission of India v. Bharti Airtel Limited &Ors, .AIR 2019 SC 113 -------- 30
8. Competition Commission of India v. Co-ordination Committee of Artists and Ors, AIR 2017
SC 1449 ------------------------------------------------------------------------------------------------- 10
9. Competition Commission of India v. Steel Authority of India Ltd.& Ors., (2010) 10 SCC 744
----------------------------------------------------------------------------------------------------------- 14
10. Entertainment Network (India) v. The Indian Performing Rights Society 2016 SCC OnLine
Bom5893 ------------------------------------------------------------------------------------------------ 25
11. Faheema Shirin.R.K v. State Of Kerala, 2019 SCC OnLine Ker 2976 -------------------------- 20
12. General Manager Telecom v. M. Krishnan & Anr. (2009) 11 SC 690 -------------------------- 30
13. Glaxo Operations UK Ltd. v. Samrat Pharmaceuticals, AIR 1984 Delhi 265 ------------------ 25
14. Govindan v. Gopalakrishna, AIR 1955 Mad 391 -------------------------------------------------- 23
15. In re HPCL Mittal pipelines Ltd , Case No. 39 of 2017 (CCI) ----------------------------------- 15
16. Jupiter Gaming Solutions Pvt. Ltd. v. Government of Goa & Ors, 2012 CompLR 56 (CCI). 10
17. K.C. Bokadia &Anr v. Dinesh Chandra Dubey, 1999 (1) MPLJ 33 ----------------------------- 25
18. M/S Metalrod Ltd. v. M/S. Religare Finvest Ltd., Case No. 28/2010 (CCI). ------------------- 15
19. M/s Saint Gobain Glass India Ltd. v. M/s Gujarat Gas Company Ltd., Case No. 20 of 2013
(CCI). ----------------------------------------------------------------------------------------------------- 9
20. M/s. Transparent Energy Systems Pvt. Ltd. v. TECPRO Systems Ltd., 2013 CompLR 681
(CCI). ---------------------------------------------------------------------------------------------------- 17
Page 3
Page 4
13. Hoffmann-La Roche & Co. AG v. Commission of the European Communities, (1979) ECR
461 ------------------------------------------------------------------------------------------------------- 11
14. IMS Health v. NDC Health, [2004] ECR I-5039--------------------------------------------------- 23
15. International News Service v. Associated Press, 248 U.S. 215, 259 (1918).-------------------- 25
16. Kelo v. City of New London, 545 U.S. 469 (2005). ----------------------------------------------- 29
17. Key Publications, Inc. v. Chinatown Today Publishing Enterprises, Inc. 945 F.2d 509 (2d Cir.
1991) ---------------------------------------------------------------------------------------------------- 27
18. Konkurrensverket v. TeliaSonera Sverige AB, ECR 2011 I-527--------------------------------- 17
19. Lipton v. Nature Co. 71 F.3d 464 (2d Cir. 1995). -------------------------------------------------- 27
20. Martin v. Phillips Petroleum Co., 385 U.S. 991 (1966).------------------------------------------- 15
21. Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 1986 --------------- 18
22. National Basketball Association v. Motorola Inc., 105 F 3d. 841, 845 (2d Cir. 1997).-------- 25
23. Nokia/Navteq, Comp/M. 4942, ¶ 56 ----------------------------------------------------------------- 22
24. Olympia Equipment Leasing Co. v. Western Union Telegraph Co., 797 F.2d 370, 379 (7th
Cir. 1986) ----------------------------------------------------------------------------------------------- 29
25. Pacific Bell Telephone Co. v. LinkLine Communications, lnc, 555 U.S. 438 (2009). --------- 19
26. Re VFF Chicken Meat Growers Boycott Authorisation, [2006] ACompT 2 ------------------- 21
27. Ryanair Ltd v. PR Aviation BV, EU: C: 2015:10, ¶ 33 ------------------------------------------- 27
28. Sundbusserne v. Port of Helsingborg, Case COMP/A.36.570/D3, ¶ 229 ----------------------- 17
29. Telefonaktiebolaget LM Ericsson v. Competition Commission of India, (2016) 4 CompLJ 122
(Del) ----------------------------------------------------------------------------------------------------- 31
30. Telefónica, SA and Telefónica de España, SA v. European Commission Case T-336/07 ---- 17
31. Telstra Corporation Ltd. v. Desktop Marketing Systems Pty Ltd., 9 [2001] FCA 612 -------- 27
32. Tetra Pak International SA v. Commission, ECR I-595, 1996 ----------------------------------- 17
33. Thomson/Reuters, Comp/M. 4726, ¶ 43 ------------------------------------------------------------ 22
34. Triton/Logstor, Comp/M. 6922, ¶ 13 ---------------------------------------------------------------- 22
35. United States v. Colgate & Co., 250 U. S. 300, 307 (1919---------------------------------------- 28
36. Verizon Communications Inc. v. Law Offices of Curtis Trinko LLP, 540 US 398 (2004)---- 29
37. Willman v. Heartland Hospital East, 34 F.3d 605, 613 (8th Cir. 1994). ------------------------- 16
38. WorldCom v. FCC, 238 F.3d 449 (2001) ----------------------------------------------------------- 30
Page 5
ARTICLES
1. A. Joskow, ‘Potential Competition: The Bell Atlantic/NYNEX Merger’ (2000) 16(2) Review
of Industrial Organization 185------------------------------------------------------------------------ 31
2. Alan Overd & Bill Bishop, ‘Essential Facilities: The Rising Tide’ (1999) 4 European
Competition Law Review 183 (1998). -------------------------------------------------------------- 29
3. Antony Taubman, ‘Rethinking TRIPS: ‘Adequate Remuneration’ for Non-Voluntary Patent
Licensing’ (2008) 11 Journal of International Economic Law 927, 937 ------------------------ 30
4. Article 10.1; E. Derclaye, ‘Do Sections 3 and 3A of the CDPA Violate the Database
Directive? A Closer Look at the Definition of a Database in the U.K. and its Compatibility
with European Law’ (2002) 24 European Intellectual Property Review 466. ------------------ 28
5. Barry Doherty, ‘Just What Are Essential Facilities?’ (2001) 38 Common Market Law Review
397, 404-05. -------------------------------------------------------------------------------------------- 29
6. Christopher S. Gibson, ‘Globalization and the Technology Standards Game: Balancing
Concerns of Protectionism and Intellectual Property in International Standards’ (2007) 22
Berkeley Technology Law Journal 1403, 1428. ---------------------------------------------------- 30
7. Economic Commission for Latin America and the Caribbean, ‘Data, Algorithms and Policies:
Redefining the Digital World’ 2018 ----------------------------------------------------------------- 20
8. European Commission, ‘Commission Notice on the Definition of Relevant Market for the
Purposes of Community Competition Law’ 1997 -------------------------------------------------- 11
9. F. Baton, ‘The Anatomy of Market Failure’ (1958) 72(3) Quarterly Journal of Economics 351
----------------------------------------------------------------------------------------------------------- 31
10. Friedrich Hayek, ‘Individualism And Economic Order’ (1st edn., Chicago: University of
Chicago Press, 1974), 96 ------------------------------------------------------------------------------ 16
11. George Hay, ‘Trinko: Going All the Way’ (2005) 50 Antitrust Bulletin 527, 533 ------------- 30
12. Gianna Julian-Arnold, ‘International Compulsory Licensing: The Rationales and the Reality’
(1993) 33 IDEA Journal of Law and Technology 349. -------------------------------------------- 29
13. Government of India, ‘Report Of High Level Committee On Competition Policy And
Law’2000 ----------------------------------------------------------------------------------------------- 14
14. Guy Sagi, ‘A Comprehensive Economic and Legal Analysis of Tying Arrangements’ (2014)
38 Seattle University Law Review ------------------------------------------------------------------- 15
Page 6
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BOOKS
1. Abir Roy & Jayant Kumar, Competition Law in India (2nd ed., Eastern Law House 2014). - 14
2. Alison Jones & Brenda Sufrin, EU Competition Law: Text, Cases and Materials (4th Edn.,
Oxford University Press 2010). ---------------------------------------------------------------------- 31
3. Alison Jones, A Dominant Firm‘s Duty to Deal: EC and US Antitrust Law Compared, in
Handbook of Research in Transatlantic Antitrust (2nd ed., Edward Elgar 2004), 197 --------- 31
4. Herbert Hovenkamp, Federal Antitrust Policy: The Law of Competition and Its Practice (2d
ed., West Group 1999) -------------------------------------------------------------------------------- 31
5. Jim Davis et al. eds., Cutting Edge: Technology, Information, Capitalism, And Social
Revolution (1st edn., Verso 1997). ------------------------------------------------------------------- 30
6. Legal Protection of Databases, 1996 O.J. (L 78) 20.----------------------------------------------- 30
7. Mariateresa Maggiolino, Intellectual Property And Antitrust: A Comparative Economic
Analysis Of U.S. And EU Law (1st edn. Edward Elgar Publishing 2011), 31-34 -------------- 32
8. WIPO, ‘Intellectual Property Handbook: Policy, Law and Use’ 2004 --------------------------- 32
Page 8
STATEMENT OF JURISDICTION
The Respondents have appeared before the Hon’ble Supreme Court in response to the invoking of
Section 35 of the Competition Act, 2002.
Page 9
SUMMARY OF FACTS
~Introduction to Westeros~
The dispute takes place in the State of Westeros. The Westerosi Government introduced the World
Wide Web (WWW) to the public in 1995, which after its privatization in 2000, greatly enhanced its
public accessibility. To regulate its newly liberalized economy, the Westerosi Competition Act, 2002
was enacted, to which an amendment regarding the abuse of dominance was brought into force in
2009.
~Introduction to the Parties involved~
Burgin and Burkes Inc. (B&B) is a company founded in the United States. The company specializes
in internet general research, primarily through its world famous Search Engine, ‘Accio!’. The Engine
is extremely accurate thanks to its algorithmic data processing ability, and alongside its free access
for everyone, the Engine has become extremely popular.
Stark Industries is another multination tech conglomerate from the United States. As a huge player in
the technology and e-commerce market, Stark Industries manages its own online marketplace with
aggregator apps for radio taxis, payment getaway services and its own artificial intelligence based
devices.
~The Phoenix Open Source Project~
Burgin & Burkes Inc. acquired Baggins Corp., a Canadian company that had created the Phoenix
Operating System (POS) for high end personal computers and handheld devices, to compete against
the ‘yOS’, the world’s first Operating System. Upon its acquisition, B&B decided to allow third-party
device manufactures to customize and improvise the POS in order to expand its ecosystem. The
source code and software development stack was released as part of the Phoenix Open Source Project
(POSP) for free public access.
Manufacturers could either enter into an agreement with B&B to license the POS and manufacture
handheld devices operating on the Phoenix or use the source code and development stack to create
customized versions (also dubbed forked versions) of the POS to manufacture handheld devices,
where the POS was reworked to suit the manufactured device. Proprietary rights were maintained by
the manufacturers of the respective devices.
Page 10
The POS became the most popular OS in the market, and due to its massive popularity, B&B created
the Marauders Maps mapping application and the VuTube streaming service in 2010. In 2012, device
manufacturers entered into an agreement with B&B to allow for the licensing of these applications’
proprietary rights in order to pre-install these applications into devices at a low cost of production.
The applications were included into devices as part of Burgin and Burkes’ Mobile Suite (BBMS).
~The Dispute~
Stark Industries filed a complaint before the CCW where the company alleged that B&B abused its
dominant position by using Phoenix to compel customers to use its other proprietary apps and
services. The CCW passed a prima facie order directing the DG to investigate into the matter. The
allegations were held to be true according to the DG’s report, which B&B objected to by stating that
it had made handheld devices more accessible to consumers and made it low-cost. Stark Industries
also contended that the database was also an abuse of B&B’s dominant position in the market, to
which B&B objected to by stating that there was no market for search data in the first place and has
filed for an IP registration on the database and the CCW has no jurisdiction to deal with this issue.
Page 11
ISSUES RAISED
[ISSUE 1]
HAS BURGIN AND BURKES INC. ABUSED ITS DOMINANT POSITION BY TYING ITS
PROPRIETARY APPS TO THE LICENSE FOR PHOENIX OS?
[ISSUE 2]
[ISSUE 3]
HAS BURGIN AND BURKES INC. ABUSED ITS DOMINANT POSITION BY REFUSING
TO GRANT STARK INDUSTRIES ACCESS TO THE DATABASE IT HAS DEVELOPED
FOR ACCIO!?
[ISSUE 4]
Page 12
SUMMARY OF ARGUMENTS
[Issue 1]: Has Burgin and Burkes Inc. abused its dominant position by tying its proprietary
apps to the license for Phoenix OS?
The Counsel on behalf of the Respondents humbly submits before the Hon’ble Competition
Commission of Westeros that Burgin & Burkes Inc. has not abused its dominant position in the
market for ‘OS for handheld devices’ and dominance per se is not prohibited by law. Further, the pre-
installation of apps in handsets is not anti-competitive.
[Issue 2]: Has Burgin and Burkes Inc. Abused its dominant position by foreclosing access to the
market for ‘forked’ OS developers?
The Counsel on behalf of the Opposite Party humbly submits before this Hon’ble Competition
Commission of Westeros that Burgin & Burkes Inc. has not foreclosed market access for ‘forked’ OS
developers. The same will be argued on two folds firstly, it is contended that Burgin & Burkes Inc.
has not leveraged its dominant position in the OS market and is a new entrant in the apps market.
Secondly, actions of Burgin & Burkes Inc do not amount to predatory behavior. Lastly, the Opposite
Party increases consumer welfare by decreasing the cost of handsets.
[Issue 3]: Has Burgin and Burkes Inc. abused its dominant position by refusing to grant stark
industries access to the database it has developed for Accio!?
The Counsel on behalf of the Informant humbly submits before this Hon’ble Competition
Commission of Westeros that Burgin & Burkes Inc. has not abused its dominant position by denying
access to Accio’s database to the informant. The database is essential to the success enjoyed by the
company.
[Issue 4]: Does the CCW have jurisdiction to decide on the issue of access to Burgin and Burkes
Inc.’s database and algorithm?
The counsel on behalf of the Informant humbly submits that the CCW does not have jurisdiction to
issue access to the database as well as the proprietary algorithm in the Opposite Party’s possession.
The same shall be argued in a two-fold manner. Firstly, it is contended that Burgin & Burkes Inc.’s
database is copyrightable and that the CCW lacks the jurisdiction to grant compulsory licenses to
materials protected under the intellectual property laws of Westeros.
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ARGUMENTS ADVANCED
[ISSUE 1]
BURGIN AND BURKES INC. HAS NOT ABUSED ITS DOMINANT POSITION BY TYING
ITS PROPRIETARY APPS TO THE LICENSE FOR PHOENIX OS
1. The Opposite Party humbly submits before the Hon’ble Competition Commission of
Westeros that it has not abused its dominant position by tying its proprietary apps to the
license for Phoenix OS. The same shall be argued in a three-fold manner. [1.1] Burgin &
Burkes Inc. functions in the relevant market of Operating Systems for handheld devices. [1.2]
Pre-installed apps are not equivalent to exclusivity. [1.3] The tying agreement passes the Rule
of reason test.
[1.1] Burgin & Burkes Inc. is a player in the relevant market of Operating Systems for
handheld devices
2. It is humbly submitted that Burgin & Burkes Inc. is a player in the relevant market of
Operating systems. The relevant market comprises of all those products and/or services which
are considered interchangeable or substitutable by reason of product characteristics, prices and
intended use.1 Therefore, two products need not be perfect substitutes. The products merely
being functionally interchangeable make them a part of the same relevant market.2
3. Relevant market is determined by relevant product market and relevant geographic market.3
For deciding the same, due regard must be given to all or any of the following factors viz.,
physical characteristics or end-use of goods, price of goods or service, consumer preferences,
exclusion of in-house production, existence of specialized producers and classification of
industrial products, in terms of the provisions contained in .
1
The Competition Act, § 2(t).
2
European Commission, ‘Commission Notice on the Definition of Relevant Market for the Purposes of Community
Competition Law’ 1997.
3
M/s Saint Gobain Glass India Ltd. v. M/s Gujarat Gas Company Ltd., Case No. 20 of 2013 (CCI).
Page 14
[A]The Burgin & Burkes Inc. is dominant player in the OS for handheld devices
4. Burgin & Burkes Inc. had acquired Baggins Corp. which developed the leading operating
system, ‘Phoenix OS’ for handheld devices. Mobile operating systems combine features of a
personal computer operating system with other features useful for mobile or handheld use. 4
The Phoenix OS had yOS as its competitor. The sustained demand for operating system for
mobile phones5 led to a new relevant market.
5. It was held in Competition Commission of India v. Co-ordination Committee of Artists and
Ors6 that the definition of market is a tool to identify and define boundaries of competition
between firms. Purpose of defining 'relevant market' is to identify the competitive constraints
that undertakings face when operating in a market. Burgin & Burkes Inc. after acquiring
Phoenix OS has entered the market of OS which has been contended to be a relevant market.
6. Accordingly, the existence of a dominant position can be derived from several factors one of
which, one is the existence of very large market shares. 7 It is humbly submitted before the
CCW that as of 2018, 80% of the world’s handheld devices, across various brands were
running on the Phoenix OS while 90% of the handheld devices sold in Westeros were running
on the Phoenix OS.8
[B]Holding a dominant position is not prohibited by law
7. In the case of, Shri Neeraj Malhotra, Advocates v. North Delhi Power Ltd. 9 , the CCI
observed that Section 4 of the Competition Act does not prohibit an enterprise from holding a
dominant position in a market, it does place a special responsibility on such enterprises in
requiring them not to abuse their dominant position. Also in a similar case of Jupiter Gaming
Solutions Pvt. Ltd. v. Government of Goa & Ors10, the CCI while determining alleged abuse
of dominance by Government of Goa stated that dominance per se is not bad, but its abuse is
bad in Competition Law of India.
8. Therefore it is contended before the CCW that the Burgin & Burkes Inc. holding a dominant
position in its relevant market is not prohibited by law. Abuse of dominance is judged in
terms of specified acts committed by a dominant enterprise. Such acts are prohibited under the
4
Mr. Umar Javeed & Ors. v. Google LLC & Ors., Case No. 39 of 2018 (CCI).
5
Moot Proposition, ¶ 8.
6
Competition Commission of India v. Co-ordination Committee of Artists and Ors, AIR 2017 SC 1449.
7
Hoffmann-La Roche & Co. AG v. Commission of the European Communities, (1979) ECR 461.
8
Moot Proposition, ¶ 9.
9
Shri Neeraj Malhotra, Advocates v. North Delhi Power Ltd. , Case No. 06/2009 (CCI).
10
Jupiter Gaming Solutions Pvt. Ltd. v. Government of Goa & Ors, 2012 CompLR 56 (CCI).
Page 15
law. These practices are just prohibited, as an abuse of its dominant position and therefore, the
Act does not envisage to explicitly prove such abuse of dominance only when it causes or
likely to cause an appreciable adverse effect on competition in the relevant market within
India. 11
[1.2] Pre-installed apps are not equivalent to exclusivity.
9. It is humbly stated that Burgin & Burkes had brought up a scheme where the device
manufacturers who have signed agreement for the license of Phoenix OS would be able to
uninstall the proprietary apps. This scheme gives a choice to the device manufacturers and
hence, the question of imposing the proprietary apps on the device manufacturers is
meaningless in this scenario.
10. It is humbly submitted before that Hon’ble court that all vertical agreement including
exclusive agreements are not per se anti-competitive but would be deemed to be anti-
competitive if they are found to be causing AAEC in India based on the factors provided
under Sec 19(3) of the Act, depending on market foreclosure ,the market share of the parties,
duration of the exclusive agreements etc. 12 In the present matter the exclusivity in pre-
installation of proprietary apps have not caused AAEC based on the factors provided under
Sec 19(3) of the Act.
11. It is contented that exclusive agreements have pro-competitive effects. It may lead to
incentives for exclusive distributors to focus their sale efforts on a particular brand, thereby
leading to an increased investment and an enhanced brand image thereby increasing the
efficiency of the service. Several jurisdiction states that the arrangements will be held to be
exclusive only if the arrangements cover all purchases or sales. There are no universally
accepted norms of exclusivity. In the present matter the arrangement is a choice that is given
to the device manufacturers while installing the Phoenix OS.
12. It is contended that the tie-in- agreement of Phoenix OS and the proprietary apps are legal as
they pass the “rule of reason” test. The “rule of reason test” is a legal approach by
competition authorities or the courts where an attempt is made to evaluate the pro-competitive
11
Ibid 12
12
Abir Roy & Jayant Kumar, Competition Law in India (2nd ed., Eastern Law House 2014).
Page 16
features of a restrictive business practice against its anticompetitive effects in order to decide
whether or not the practice should be prohibited. 13
13. Agreements are considered illegal only if they result in unreasonable restrictions on
competition. Based on the U.S. law, this is tested on what is known as the "rule of reason"
analysis. It is also required that the parties to the agreement are engaged in rival or potentially
rival activities. A potential rival is one who could be capable of engaging in the same type of
activity. Such a provision has generally been interpreted to mean that firms that are under
common ownership or control are not considered as "rival" or "potentially rival" firms. Under
the U.K. law, an agreement infringes the law only if it has as its object or effects an
appreciable prevention, restriction or distortion of competition. This is obviously to be
determined on a case-by-case basis.
14. In general the "rule of reason" test is required for establishing that an agreement is illegal.
However, for certain kinds of agreements the presumption is often that they cannot serve any
useful or pro-competitive purpose and therefore do not need to be subject to the "rule of
reason" test. Vertical agreements, on the other hand, are agreements between enterprises that
are at different stages or levels of the production chain and, therefore, in different markets.
Vertical restraints on competition include tie-in arrangements, exclusive supply agreements,
exclusive distribution agreements, refusal to deal and Resale Price Maintenance (RPM). 14
15. In the case Bharti Airtel Limited v. Reliance Industries Limited & Ors 15the provision of free
services by the service provider, Reliance Jio, was disputed. The CCI noted that free services
cannot by itself raise competition concerns unless the same is offered by a dominant
enterprise and shown to be tainted with an anti-competitive objective of excluding
competition” and “in a competitive market scenario, short-term business strategy of an
entrant like offering attractive services and schemes to penetrate the market and establish its
identity cannot be considered to be anti-competitive in nature.16
16. Hence, when the tying arrangement leads to a significant closing of the tied product market,
the rule of reason test should be applied, but not in the format that assumes that tying
arrangements in these scenarios are harmful. Rather, it should be applied in a format that
13
Robert H. Bork, ‘The Rule of Reason and the Per Se Concept: Price Fixing and Market Division, (1965) 74 Yale Law
Journal 775, 781.
14
Government of India, ‘Report Of High Level Committee On Competition Policy And Law’2000.
15
Bharti Airtel Ltd. v. Reliance Industries Limited & Reliance Jio Infocomm Ltd. (Case No. 03 of 2017) CCI
16
Ibid 17
Page 17
requires the plaintiff to prove the existence of real potential to harm competition
significantly. 17 The tying agreement of Phoenix OS and the proprietary apps are not
mandatory as the Burgin & Burkes Inc. gives a choice to the device manufacturers in the first
place, hence the intention to foreclose the market or harm the competitor is not there.
In the light of the aforementioned reasons, it is humbly submitted that Burgin & Burkes Inc. has not
abused its dominant position by tying its proprietary apps to the license for Phoenix OS
[ISSUE 2]
BURGIN AND BURKES INC. DID NOT ABUSE ITS DOMINANT POSITION BY
FORECLOSING ACCESS TO THE MARKET FOR ‘FORKED’ OS DEVELOPERS
17. Burgin & Burkes Inc has not foreclosed market access for ‘forked’ OS developers. The tying
of apps to the OS was done as a pricing strategy to enter the apps market and this would not
lead to market foreclosure of OS market for the ‘forked’ OS developers. The same will be
argued on three folds. [2.1] Burgin & Burkes Inc is a new entrant to the market for apps and
did not leverage its position in the OS market. [2.2] Burgin & Burkes has not undertaken
predatory behavior. [2.3] The strategy was undertaken for consumer welfare.
[2.1] Burgin & Burkes Inc. is a new entrant in the market of ‘Apps for handheld devices’ and is
not leveraging its position in the OS market.
18. The Counsel on behalf of the opposite party submits that Burgin & Burkes Inc cannot be held
to leveraging its dominance in the OS market to enter or protect the Apps market and thereby
foreclosing the market for ‘forked OS developers’. The same will be argued two folds. [A]
Burgin & Burkes Inc is a new entrant in the apps market. [B] Burgin & Burkes Inc did not
leverage its position in OS market to monopolize apps market.
17
Guy Sagi, ‘A Comprehensive Economic and Legal Analysis of Tying Arrangements’ (2014) 38 Seattle University Law
Review 1.
Page 18
[A] Burgin & Burkes Inc is a new entrant in the apps market
19. The central aim of anti-trust authorities is to ensure competition and assist the creation of a
market which caters to consumer preferences.18 Competition in this sense means the “action
of endeavouring to gain what another endeavours to gain at the same time”.19 Hence, certain
market practises, most notably product differentiation and price cutting, favour the consumer
by increasing the diversity of products offered for sale at competitive prices 20; all of which
require the entry of new undertakings especially in the digital market. Consequently, this
increases consumer welfare which is expounded to be the ultimate goal of competition law.
20. The entry into a market need not be actual to be considered as an entry. The intention of the
entrant demonstrated by her preparedness to do so is sufficient to categorise an action as
entry.21 The factors to be considered while determining the entry may include, inter alia, the
entrants ability to finance the business and to purchase the necessary equipment, action taken
by the plaintiff to establish the business, whether the plaintiff possesses a sufficient
background and the necessary experience to allow for a profit-making entry into the
industry.22
21. The aforementioned factors, when applied in the instant matter, qualify the actions of Burgin
& Burkes Inc. as an entry into the market for apps. Firstly, the ability of the Opposite Party to
finance business projects and invest in equipment is indisputable. Acquisition of Baggins
Corp. in 2007 for a whopping sum of USD 1.4 billion bears testimony to this fact. 23 Secondly,
Opposite Party has created the Burgin & Burkes Mobile Suite (BBMS) which includes apps
such as Marauders Map, VuTube and others, exhibiting the preparedness to enter the apps
market.24 Lastly, the Opposite Party has sufficient experience in the software development
industry which is evident in the popularity of its products including Accio!. 25
18
Competition Commission of India v. Steel Authority of India Ltd.& Ors., (2010) 10 SCC 744.
19
Friedrich Hayek, ‘Individualism And Economic Order’ (1st edn., Chicago: University of Chicago Press, 1974), 96.
20
U.S. Department of Commerce, ‘Trends in Consumer Spending and Personal Saving-Technical Report, Bureau of Economic
Analysis’ (2011).
21
Martin v. Phillips Petroleum Co., 385 U.S. 991 (1966); Hecht v. Pro-Football, Inc., 436 U.S. 956 (1978).
22
Hayes v. Solomon, 444 US. 1078 (1980); Hecht v. Pro-Football, 436 U.S. 956 (1978); Martin v. Phillips Petroleum Co., 385
U.S. 991 (1966).
23
Moot Proposition. ¶ 7.
24
Moot Proposition, ¶ 10.
25
Moot Proposition, ¶ 5.
Page 19
22. Further, the existence and popularity of apps such as JetFlix and J-Maps26 bear testimony to
the fact the Burgin & Burkes Inc. is not a dominant enterprise. Therefore, Burgin & Burkes is
a new entrant in the market of apps and is not a dominant entrant as alleged by the Informant.
[B] Burgin & Burkes Inc did not leverage its position in OS market to monopolize apps
market.
23. The Counsel on behalf of the Opposite Party humbly contends that Burgin & Burkes Inc has
not leveraged their market position in the market for ‘Operating Systems’ (OS). Leveraging
dominant position is when a dominant entity in one market leverages it power to protect or
enter another market.27 In the present case there has been no leveraging of dominant position
in the market.
24. In the Berkey Photo v. Eastman Kodak Co.,28 the United States, 2nd Circuit Court stated that
“"so long as we allow a firm to compete in several markets, we must expect it to seek the
competitive advantage of its broad-based activity production, greater ability to develop
complementary products, reduced transactions costs and so forth, and that allowing it to do
so ultimately benefits consumers.” The essence over here being that when a firm does
function across multiple platforms or activities, it must be allowed to take its competitive
advantage and the same is not anti-competitive as its end result is beneficial to consumers;
which is the goal of Competition laws.29
25. The standard test applied by the U.S. Antitrust agencies is leveraging monopoly is leveraging"
claims can be sustained only if the alleged anti-competitive conduct (i) strengthens the
dominant f1rm's monopoly position in its primary market; or (ii) threatens monopolization of
a secondary market. Most US courts have held that it is not unlawful for a firm with a
monopoly in one market to use its monopoly power in that market to gain a competitive
advantage in the secondary market, 30 unless by so doing it serves either to maintain its
existing monopoly or to create a dangerous probability of gaining a monopoly in the
secondary market as well. 31
26
Moot Proposition, ¶ 13.
27
In re HPCL Mittal pipelines Ltd , Case No. 39 of 2017 (CCI)
28
Berkey Photo v. Eastman Kodak Co., 603 F.2d 263 (2d Cir. 1979).
29
M/S Metalrod Ltd. v. M/S. Religare Finvest Ltd., Case No. 28/2010 (CCI).
30
Joseph M. Callow, Jr., ‘Cut-Throat Competition in the Friendly Skies, Alaska Airlines vs. United Airlines’ (1992) 61
University Cincinnati Law Review 686.
31
Willman v. Heartland Hospital East, 34 F.3d 605, 613 (8th Cir. 1994).
Page 20
26. Therefore, in the present case, neither does the act of attaching BBMS to licensed Phoenix OS
lead to any kind of strengthening of the dominance in the OS market, nor does it threatens to
monopolize or make Burgin & Burkes Inc a dominant entity in the market for apps for
handheld devices. The same is primarily because of two reasons, first that since there are
other competitors in the apps market, such as independent developers and developers such as
the informant.32 Secondly that pre-installation of apps is not the reason as to why consumers
would choose Phoenix OS devices. 33
27. Moreover, the European Counterpart of Competition regulator as well has set the bar for
holding leverage of dominant position very high. 34 In nearly all the cases in which the
doctrine has been applied, the injury in the secondary market has been very substantial,
leading to substantial competitive foreclosure in that market.35 In the Tetra Pak II case, the
'Court of First Instance has stated that "In the case of distinct, but associated, markets,
application of Article 86 to conduct found on the associated, non-dominated, market and
having effects on that associated market can only be justified by special circumstances." Thus,
bar in leverage cases is higher, requiring that in addition to proof of dominance and abuse,
there are extenuating circumstances that justify a finding of abuse.
28. Therefore, in the present case, the tying of BBMS to phoenix OS is not leveraging its position
as it cannot be said that this act will have monopolizing effects on the App market. And
therefore, neither the OS market nor the apps market has been foreclosed for any competitors.
29. The Counsel on behalf of the Opposite Party states that in the present case, Burgin & Burkes
Inc has not undertaken predatory pricing. The same will be argued on two folds. [A] Zero
Pricing in itself is not anti-competitive. [B] The presence of network effect mandates use of
pricing technique.
32
Moot Proposition, ¶ 13.
33
Moot Proposition, ¶ 10.
34
Tetra Pak International SA v. Commission, ECR I-595, 1996.
35
CBEM v. CLT & IPB, ECR 1985 3261; Telefónica, SA and Telefónica de España, SA v. European Commission Case T-
336/07; Konkurrensverket v. TeliaSonera Sverige AB, ECR 2011 I-527; Sundbusserne v. Port of Helsingborg, Case
COMP/A.36.570/D3, ¶ 229.
Page 21
1. The prices of the goods or services of the dominant firm are below the cost of production of
such goods or acquisition of such service.
2. Such decline in the prices of the dominant firm was brought with the intention of driving the
competitors out of the market.
3. There is a significant planning in order to recover or recoup the losses that are incurred by
increasing the prices again after the competitors are forced out of the market.
36
Ibid 17.
37
John S. McGee, ‘Predatory Price Cutting: The Standard Oil (N.J.) Case’ (1958) 1 Journal of Law and Economics 130, 138.
38
Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 1993.
39
Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 1986.
40
M/s. Transparent Energy Systems Pvt. Ltd. v. TECPRO Systems Ltd., 2013 CompLR 681 (CCI).
Page 22
33. In the present set of facts, there has been no evidence as to how the tying was done with the
intention to drive out competitors. Moreover, the third requirement is as well not fulfilled. The
evidence that recoupment of losses can be done is as well missing. The third element has also
been characterized as requiring a "market structure that makes predation plausible." This
essentially requires an organization to have the ability to control prices during and after the
period of predation, recouping losses sustained during the predation period by increasing
prices after competition for a suitably long period. 41
34. Burgin & Burkes Inc cannot recoup its losses because of the basic fact that for apps market,
there are substantial numbers of developers who are making apps only for the Phoenix OS,
therefore, driving them out in itself is not plausible and even if driven out, the recoupment is
not plausible as well. Therefore, the pricing strategy undertaken by Burgin & Burkes Inc. is
not anti-competitive as above requirements are not met.
[B] The presence of Network effect mandates the use of pricing strategy
35. The market in the present case, involves a network effect. A network effect “refers to the
effect that one user of a good or service has on the value of that product to other existing or
potential users”.42 In the present case, the increase in the customer base leads to the increase
in the developer’s base. 43 In the NSE case, the CCI was of the opinion that “Simply stated,
network effect implies that value to the users in an industry increases with increase in the
number of its users. Consumers are willing to pay a higher price for the value they get from
operating in this network benefitting from this value creation.”
36. Moreover, in the same case, the commission was of the view that in markets having network
effect, behavior of prices and costing dimensions among networks do not follow predictable
paths and cannot be predicted and analyzed through traditional economic tools. Therefore, the
normal pricing techniques can vary in a network affected market. Therefore, in market where
creation of network of developers is necessary to improve customer network, a new entrant
can undertake penetrative prices to ensure they have a competent base.
37. In the CCI has been of the opinion that 'networked industry, at times the pricing strategy is
such that revenue is generated from value added services and people are induced to join the
41
Pacific Bell Telephone Co. v. LinkLine Communications, lnc, 555 U.S. 438 (2009).
42
Economic Commission for Latin America and the Caribbean, ‘Data, Algorithms and Policies: Redefining the Digital World’
2018.
43
Moot Proposition, ¶ 13.
Page 23
network for creating value to the existing customer base. Also, due to lock in and switch-in
cost in a network industry, the service provider may give benefits to join the network, which
may be in the form of zero fees. Given such a scenario, each player has to adopt a unique
pricing strategy best suited to its business model. 44
38. Therefore, it is humbly contended that it was important for Burgin & Burkes Inc to give
BBMS without any additional cost as the same was a way to create a base. And for this reason
as well, it cannot be said that Burgin & Burkes acts may lead to monopolizing apps market as
the competitors themselves can come up with unique strategies to improve consumer base. In
the Reliance Jio Infocomm limited case45 the CCI was of the opinion that “in a competitive
market scenario, where there are already big players operating in the market, it would not be
anticompetitive for an entrant to incentivise customers towards its own services by giving
attractive offers and schemes. Such short-term business strategy of an entrant to penetrate the
market and establish its identity cannot be considered to be anti-competitive in nature and as
such cannot be a subject matter of investigation under the Act.”
39. Therefore, the Counsel humbly submits that the pricing strategy adopted by the Burgin &
Burkes Inc was just to create a customer base as it was a new entrant in the market and the
same cannot be held as anti-competitive.
[2.3] The strategy was undertaken for consumer welfare.
40. The Preamble of a statute contains the spirit and the reason behind the passing of the statute.46
That it is to be used to flesh out the cardinal principles of the statute concerned, too is a settled
position in law. 47 The Preamble to the Westeros Competition Act states that the goal of the
Act, inter alia, is to protect the interests of the consumer. In other words, the Act must
promote and sustain consumer welfare in protecting competition in the market. The same has
been held to be the case in international jurisdictions as well. 48
41. The actions of the Opposite Party have always been guided by consumer welfare. In fact, the
primary reason behind providing open access to Phoenix OS through POSP in 2008 was to
give opportunity to third-party developers to improvise and customize the Phoenix OS in
44
The National Stock Exchange of India Ltd. v. Competition Commission of India, 2014 CompLR 304(COMPAT).
45
Bharti Airtel Ltd v. Reliance Industries Ltd., Case No. 03 of 2017 (CCI).
46
Brett v. Brett, (1826) 162 ER 456.
47
Burakar Coal Co. Ltd. v. Union of India, AIR 1961 SC; Venkataswami R. Naidu v. Narasram Naraindas, AIR 1966 SC;
Tribhuvan Parkash Nayyar v. Union of India, AIR 1970 SC.
48
GlaxoSmithKline Services Unlimited v. Commission of the European Communities, Case T-168/01 [2006], ¶ 171.
Page 24
order to develop an ecosystem. 49 Also, the act of providing BBMS at no additional cost would
ultimately benefit the consumers, who are receiving a fully functional handset at no additional
cost. This has also been done in order aid digital penetration in the country, given the recent
judicial impetus for the same. 50 Therefore, the actions of Burgin & Burkes Inc. are line with
consumer welfare which is inextricably linked to public interest.51
In the light of the aforementioned reasons, it is humbly submitted that Burgin & Burkes Inc. has not abused its
dominant position and has not foreclosed access to the market for ‘forked’ OS developers
[ISSUE 3]
BURGIN AND BURKES INC. HAS NOT ABUSED ITS DOMINANT POSITION BY
REFUSING TO GRANT STARK INDUSTRIES ACCESS TO THE DATABASE IT HAS
DEVELOPED FOR ACCIO!
42. The Opposite Party humbly submits before the Competition Commission of Westros that
Brugin and Burkes Inc. has not abused its dominant position by refusing to grant the
informant i.e. Stark Industries access to the database it has developed for Accio. The same
will be argued in three folds. Firstly [3.1] Search data is not a market and therefore there can
be no abuse. And lastly [3.2] there has been no abuse of Accio’s dominant position in the
market.
[3.1] Search Data is not a market and therefore there cannot be an abuse
43. The Counsel on behalf of the Opposite party contends that there is no market for search data
and therefore there cannot be an abuse of dominant position. Burgin and Burkes Inc. is a
United States based company that specializes in ‘Internet General Search’. 52 The search
engine ‘Accio’ works using two aspects. Firstly a database consisting, but not limited to
keywords searched and Search history. However this data individually is not the sole source
of performance of Accio, it needs to be combined with the proprietary algorithm that has been
49
Moot Proposition, ¶ 7.
50
Faheema Shirin.R.K v. State Of Kerala, 2019 SCC OnLine Ker 2976.
51
Re VFF Chicken Meat Growers Boycott Authorisation, [2006] ACompT 2.
52
Moot Proposition ¶ 5.
Page 25
created by Burgin & Burkes Inc. This algorithm is the second aspect on which the Accio
search engine depends. Therefore, the success of Burgin & Burkes Inc. in the market of
internet general search needs to be attributed to both the database as well as the algorithm.
44. The opposite party contends that there is no market for search data as the collection of data is
not a trade. It is a part of the market of ‘Internet General Search’ in which both the database
and the algorithm is used to give accurate results to the customers. Therefore, search data in
itself is not a separate market and there cannot be abuse in a non existing market.
45. The European Commission has in a plethora of cases not held specific kind of data as a
separate market. For instance in the Triton/Logstor merger case 53 , Nokia/Navteq merger
case54 and the Thomsen/Reuters merger case55 in all these cases, the relevant market pursuant
to competition law was ultimately the market for the goods or service in question, not for data
as such. For instance in the Thomsen/Reuters mergers case, the relevant market that was taken
was ‘discrete content sets’ (information services for finance professionals) which consisted of
a significant part of data, data-feeds, real-time market data and non real-time data.
46. Therefore, in the above case as well, finance data was not regarded as a market but the service
was. Drawing an analogy, in the present case as well, there is no market for search data and
therefore, there cannot be abuse in a nonexistent market.
[3.2] Alternatively, Burgin and Burkes did not abuse its dominant position
47. The Counsel on behalf of the opposite party contends that Burgin and Burkes has not abused
its dominant position. The ‘Internet general search’ market requires two factors, firstly a
database and secondly the algorithm. They have to be looked upon together. The Counsel will
submit the same on two folds. [A] the denial of access to database was not abuse of dominant
position under Section 4 of the Westerosi Competition Act, 2002 and [B] database and
algorithm combined is an important creation of Burgin & Burkes Inc.
[A] Denial of access to database was not abuse of dominant position under Section 4 of
Westerosi Competition Act, 2002
48. The Counsel contends that the denial of access to Burgin & Burkes search engine database
was not an abuse under Section 4 of the Westerosi Competition Act, 2002. Firstly, it is a well
53
Triton/Logstor, Comp/M. 6922, ¶ 13.
54
Nokia/Navteq, Comp/M. 4942, ¶ 56.
55
Thomson/Reuters, Comp/M. 4726, ¶ 43.
Page 26
established principle that as a general rule there is no obligation under Antitrust law either to
use or license protected works.56 This means prima facie there is no obligation on Burgin and
Burkes to grant access of their database to the Stark industries. Therefore, until exceptional
circumstances are proved, denial of license to an intellectual property is not abusive in nature.
49. Moreover, in the IMS Health judgment57, the European Commission stated that there is no
general duty to license but exceptional circumstances may force access to refused IP. IP must
be indispensible for the product for which license is sought. Three conditions must be
satisfied: Firstly, refusal must prevent the emergence of new product for which there is
potential customer demand secondly unjustified refusal and thirdly it must exclude
competition on a secondary market.
50. However, in the present case, none of the exceptional circumstances can be proved. The first
condition that the refusal must prevent the emergence of new product for which there is
potential customer demand. In the present case, Infinity search engine is not a new product as
it has been in market since 2008.58 Also the refusal is not unjust as the database is the result of
15 years of efforts and investment of Burgin & Burkes and therefore, the refusal is not unjust.
And neither does the refusal exclude any competition on a secondary market.
51. An analysis often applied in determining whether a party’s refusal to deal violates competition
law is that whether the refusal represents a change in an established pattern of dealing
undertaken with the intent to destroy competition. 59 The Counsel contends that the refusal by
Burgin & Burkes does not deviate from the general pattern of dealing and also was not done
to destroy competition. Finally the IMS Judgment also stated that “refusal to license may be
deemed abusive only if… [the entrant] intends to produce goods or services of a different
nature which, although in competition with those of [the incumbent], answer specific
consumer requirements not satisfied by [the incumbent]”60
52. In the present case, the informant, i.e. the Stark Industries does not intend to create any
service different from Accio nor does it cater to any specific demands of the consumers.
Therefore, the refusal was not an abusive act done by Burgin & Burkes Inc. but was only to
protect that data that the users had trusted Burgin & Burkes with.
56
AB Volvo v. Erik Veng (UK) Ltd., 1988 E.C.R. 6211.
57
IMS Health v. NDC Health, [2004] ECR I-5039.
58
Moot Proposition, ¶ 12.
59
Byars v Bluff City News Co., 609 F.2d 843, 855 (6th Cir. 1979).
60
Ibid 76.
Page 27
53. Moreover, In the Oscar Bronner GmbH & Co. KG v. Mediaprint Zeitungs61 , there was a
newspaper that had large market share and had its own distribution chain to circulate
newspaper door to door. Other newspaper with small market share could not individually or in
co-operation with others was not able to maintain supply chain for door to door services. EC
held that this refusal to access is not an abuse of dominance. There can be other mode of
selling paper such as through shops or through post. Commercial hardship to an enterprise is
not ground of compulsory licensing.
54. Similarly in the present case as well, the mere fact that Stark Industries has to undergo
commercial hardship for collecting and creating its own search engine data base does not
make it a proper ground of granting access. In the present case as well, there are multiple
other ways to improve a search engine’s functioning, such as creating a better algorithm.
[B] Database and Algorithm combined is an important creation of Burgin & Burkes Inc.
55. The Counsel contends that the database of the search engine and the Algorithm developed by
the Burgin & Burkes Inc. is an important creation for its survival in the global internet search
market. The Westerosi Competition Act, 2002 does not prohibit dominance but only prohibits
abuse of such dominance. 62 The algorithm and the database are the efforts of the Burgin &
Burkes Inc. and should be given protection. In the case of Govindan v. Gopalakrishna63, it
was held that although the amount of originality in a compilation is small, it is still protected
by law. Hence, no party may steal or appropriate the result of another's intelligence, skills or
labour, even in such works. The Counsel contends that the database is the result of the efforts
of Burgin & Burkes and as therefore should be protected. Moreover, the Counsel also
contends that the data that is contained in the database is also of utmost important. The
compilation of data is a work of copyright; however the data contained in the database is also
as much important since that helps in giving accurate search results.
56. In the case of Burlington Home Shopping Pvt Ltd v Rajnish Chibber64 the Court was of the
view that “copyright and trade secrets law protect different elements of compiled business
data, with copyright protecting the expression in these compilations and trade secrets law
protecting the underlying data.” The fact in the present case is that the search data itself is a
61
Oscar Bronner v. Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co. KG (1998) 1 ECR 7791.
62
Ibid 12.
63
Govindan v. Gopalakrishna, AIR 1955 Mad 391.
64
Burlington Home Shopping Pvt Ltd. v. Rajnish Chibber, 61 (1995) DLT 6.
Page 28
trade secret for Burgin and Burkes. The data has been trusted by the users to Burgin & Burkes
and helps the Accio search engine to be relevant. This data has been collected by the company
over a span of 15 years. This data combined with the algorithm ensures the relevancy of the
search engine.
57. Where a plaintiff incurs cost in acquiring time-sensitive information, the plaintiff may prevent
a direct competitor from accessing this information where such access would reduce the
incentive to produce the information or overall quality of the plaintiff’s product or service.
This doctrine was laid down in International News Service v. Associated Press 65 and
subsequently developed in National Basketball Association v. Motorola Inc.66
58. The Counsel states that giving access to the database which was the result of the efforts of
Burgin & Burkes Inc, would lead to the issue of free riding. 67 The fact that 15 years of data
that was collected, arranged and analyzed by the company would be accessible to a
competitor who came to the market in the year 2008, would kill the incentive for investment
in such enterprises. Therefore, the importance of the database should be kept into
consideration as well.
In the light of the aforementioned reasons, it is humbly submitted that Burgin & Burkes Inc. has not abused its
dominant position by denying access to their database for the search engine.
[ISSUE 4]
THE CCW DOES NOT HAVE JURISDICTION TO DECIDE ON THE ISSUE OF ACCESS
TO BURGIN AND BURKES INC. DATABASE AND ALGORITHM
59. The Opposite Party humbly submits before the Hon’ble Competition Commission of
Westeros that it does not have the jurisdiction to decide on the access to the Opposite Party’s
database and algorithm. The same shall be justified on two grounds. [4.1] Database is entitled
to the protection of Intellectual property laws of Westeros. [4.2] The CCW lacks the
65
International News Service v. Associated Press, 248 U.S. 215, 259 (1918).
66
National Basketball Association v. Motorola Inc., 105 F 3d. 841, 845 (2d Cir. 1997).
67
Trans Sport, Inc. v. Starter Sportswear, Inc., 964 F. 2d 186, 190-91 (2d Cir. 1992); Abcor Corp. v. AM Int’l Inc., 916 F. 2d
924, 929-930 (4th Cir. 1990); Morris Communs Corp. v. PGA Tour, Onc, 364 F.3d 1288, 1295-1296 (11th Cir. 2004).
Page 29
jurisdiction to grant compulsory licenses to materials protected under the intellectual property
laws of Westeros.
60. It is humbly submitted by the Opposite Party that the database created by it is entitled to the
protection afforded under the Copyright Act, 1957. The same shall be argued in a two-fold
manner. [A] Registration of copyright is not mandatory. [B] Database developed by Burgin &
Burkes Inc. is a copyright under the Copyright Act, 1957.
[A] Registration of copyright is not mandatory
61. Copyright in a work arises the moment the work has been created. 68 The right against
infringement of copyright subsists even if the same has not been registered with the Copyright
Office. S. 14 of the Act grants ownership of the work to the author of the work, hence,
copyright follows authorship and not the other way round. 69 This view is a settled position of
law, which overturned a series of judgments, delivered across High Courts 70 , and has
subsequently been reaffirmed as well71.
62. In the present matter, the database has been created by Burgin & Burkes Inc. and has also
applied to the appropriate authorities for registration. Since the registration is not mandatory
under the Act, the Opposite Party can activate the courts for infringement of copyright.
[B] Database developed by Burgin & Burkes Inc. is a copyright under the Copyright Act
63. The said Act, under Section 2(o) explicitly includes compilations and databases within the
definition of literary work.72 The Court, while interpreting the conditions necessary to avail
the protection of the Copyright laws, held that “…the word 'original' does not mean that the
work must be the expression of original or inventive thought. Copyright Act is not concerned
with the origin of ideas, but with the expression of thought.”73 Thus, it is the expression which
is of importance and not the innovativeness behind the expression.
64. Similarly, the deciding factor for granting of copyright protection to such compilations is the
selection and arrangement of the raw data collected. The same has been the suggested criteria
68
Entertainment Network (India) v. The Indian Performing Rights Society 2016 SCC OnLine Bom5893.
69
K.C. Bokadia &Anr v. Dinesh Chandra Dubey, 1999 (1) MPLJ 33.
70
Mishra Bandhu Katyalaya v. S. Koshal, AIR 1970 MP 261.
71
Glaxo Operations UK Ltd. v. Samrat Pharmaceuticals, AIR 1984 Delhi 265.
72
The Competition Act, § 2(o).
73
Macmillan and Co. v. K. and J. Cooper, AIR 1924 PC 75.
Page 30
in the, TRIPS Agreement 74 and the Copyright Treaty 1996 75 . In the landmark decision of
Feist76 the Court recognised that “…choices as to selection and arrangement, so long as they
are made independently by the compiler and entail a minimal degree of creativity, are
sufficiently original.” 77 Thus, copyright law, while dealing with compilations such as
databases, expects originality in selection and arrangement and not of the data itself 78, as
decided in a catena of cases. 79 In the present matter, Burgin & Burkes Inc. collects only a
limited amount of information.
65. Further, the Database Directive 80 provides a sui generis right to database owners against
unauthorised extraction and re-utilisation of the content81. Also, it emphasizes on the level of
investment in creating the database as opposed to the level of creativity. Indeed, the need to
protect investments in databases was interpreted by the Courts to be the driving force behind
the Directive. 82 Legislative responses along the same lines are being considered in other
jurisdictions as well. 83 Therefore, involuntary sharing of databases which are backed by
substantial investments, such as that of Burgin & Burkes Inc., would be counterproductive to
competition in the market.84
74
Article 10.1; E. Derclaye, ‘Do Sections 3 and 3A of the CDPA Violate the Database Directive? A Closer Look at the
Definition of a Database in the U.K. and its Compatibility with European Law’ (2002) 24 European Intellectual Property
Review 466.
75
Copyright Treaty 1995, Article 5.
76
Feist v. Rural Telephone 499 U.S. 340 (1991)
77
Ibid 76, at 348.
78
Telstra Corporation Ltd. v. Desktop Marketing Systems Pty Ltd., 9 [2001] FCA 612; Jane C. Ginsburg, ‘No "Sweat"?
Copyright and Other Protection of Works of Information After Feist v. Rural Telephone’ (1992) 92 Columbia Law
Review. 338, 348.
79
Key Publications, Inc. v. Chinatown Today Publishing Enterprises, Inc. 945 F.2d 509 (2d Cir. 1991); CCC Information
Servs. v. MacLean Hunter Market Reports, Inc., 44 F.3d 61 (2d Cir. 1994); Lipton v. Nature Co. 71 F.3d 464 (2d Cir.
1995).
80
Legal Protection of Databases, 1996 O.J. (L 78) 20.
81
Rebecca Lubens, ‘Survey of Developments in European Database Protection’(2003) 18 Berkeley Technology Law
Journal 447, 456.
82
Fixtures Marketing v. Organismos prognostikon agonon Podosfairou AE (OPAP), EU: C: 2004:697, ¶ 20; Ryanair Ltd
v. PR Aviation BV, EU: C: 2015:10, ¶ 33.
83
J. Ryan Mitchell, ‘If at Feist You Don't Succeed, Try, Try Again: An Evaluation of the Proposed Collections of
Information Anti-piracy Act’ (1999) 78 Nebraska Law Review 900, 909; U.S. Congress Bill H.R. 3531; WIPO, ‘Basic
Proposal For The Substantive Provisions Of The Treaty On Intellectual Property In Respect Of Databases To Be
Considered By The Diplomatic Conference’ 1996.
84
Jim Davis et al. eds., Cutting Edge: Technology, Information, Capitalism, And Social Revolution (1st edn., Verso 1997).
Page 31
[4.2] The CCW lacks the jurisdiction to grant compulsory licenses to materials protected under
the intellectual property laws of Westeros
66. The CCW is a quasi-judicial body entrusted with the responsibility of promoting competition
in the market, making it a market regulator.85 This puts it at the risk of jurisdictional duplicity
with other sectoral regulators, leading to inefficient use of resources and an increased risk of
forum shopping.86 Hence, the CCW must acknowledge other relevant regulators and accord
due recognition to their respective jurisdictions. The same will be argued on two grounds. [A]
Compulsory licensing hampers competition. [B] The CCW lacks jurisdiction to grant
compulsory licenses.
[A] Compulsory licensing hampers competition
67. The purpose of the Westerosi Competition Act, 2002 is to ensure freedom to trade and
87
safeguard the interests of consumers. This is merely a general restatement of the
fundamental principle governing competition law namely, the freedom to deal88 as expounded
by the Courts on numerous occasions89. Compulsory licensing is an anti-thesis of this freedom
and has been deemed to be a ‘controversial legal instrument’ 90 resulting in an involuntary
contract between an unwilling seller and a willing buyer 91.
68. The essential facilities doctrines, under which most of such licenses are issued, have been
opined to be “inconsistent with basic antitrust principles”.92 Judicially too, the doctrine has
failed attract a loyal following in any of the major jurisdictions 93 including the European94 and
the American 95 courts, while simultaneously terming it as wholly unnecessary 96 and
85
Ibid 23.
86
Paloma Szerman, ‘Telecommunications Regulators and Competition Agencies: Their Institutional Setting in Spain, the UK
and France’ (2015) 4 European Networks Law & Regulation Quarterly 243, 244.
87
Ibid 23.
88
Alison Jones & Brenda Sufrin, EU Competition Law: Text, Cases and Materials (4th Edn., Oxford University Press 2010).
89
United States v. Colgate & Co., 250 U. S. 300, 307 (1919).
90
Jon Matthews, ‘Renewing Healthy Competition: Compulsory Licenses and Why Abuses of the TRIPS Article 31 Standards
Are Most Damaging to the United States Healthcare Industry’, (2010) 4 Journal of Business Entrepreneurship & Law 120, 125.
91
Gianna Julian-Arnold, ‘International Compulsory Licensing: The Rationales and the Reality’ (1993) 33 IDEA Journal of
Law and Technology 349.
92
Herbert Hovenkamp, Federal Antitrust Policy: The Law of Competition and Its Practice (2d ed., West Group 1999), 310;
Alison Jones, A Dominant Firm‘s Duty to Deal: EC and US Antitrust Law Compared, in Handbook of Research in
Transatlantic Antitrust (2nd ed., Edward Elgar 2004), 197.
93
OECD, ‘Refusals to Deal’ 2007.
94
Alan Overd & Bill Bishop, ‘Essential Facilities: The Rising Tide’ (1999) 4 European Competition Law Review 183 (1998).
95
James Keyte, ‘the Changing Face of Class Action Litigation: The Class Action Fairness Act’ (2005) 20 Antitrust Law
Journal 44, 45.
96
Barry Doherty, ‘Just What Are Essential Facilities?’ (2001) 38 Common Market Law Review 397, 404-05.
Page 32
97
Ibid 80.
98
Olympia Equipment Leasing Co. v. Western Union Telegraph Co., 797 F.2d 370, 379 (7th Cir. 1986);George Hay, ‘Trinko:
Going All the Way’ (2005) 50 Antitrust Bulletin 527, 533.
99
Mariateresa Maggiolino, Intellectual Property And Antitrust: A Comparative Economic Analysis Of U.S. And EU Law (1st
edn. Edward Elgar Publishing 2011), 31-34.
100
Thomas Hōppner, ‘Competition Law in Intellectual Property Litigation: The Case for a Compulsory License Defense under
Article 102 TFEU’ (2011) 7 European Competition Journal 297.
101
Verizon Communications Inc. v. Law Offices of Curtis Trinko LLP, 540 US 398 (2004).
102
Ibid 80.
103
Kelo v. City of New London, 545 U.S. 469 (2005).
104
Washington Legal Foundation, ‘Compulsory Licensing of Intellectual Property: The Exception that Ate the Rule?’ 2007.
105
Christopher S. Gibson, ‘Globalization and the Technology Standards Game: Balancing Concerns of Protectionism and
Intellectual Property in International Standards’ (2007) 22 Berkeley Technology Law Journal 1403, 1428.
106
Robert Bird & Daniel R. Cahoy, ‘The Impact of Compulsory Licensing on Foreign Direct Investment: A Collective
Bargaining Approach’ (2008) 45 American Business Law Journal 283, 283.
107
Richard Posner, ‘Antitrust in the New Economy’ (2001) 68 Antitrust Law Journal 925, 926.
108
UNCTAD, ‘On IPR’s and Sustainable Development, Intellectual Property Provisions Of Bilateral And Regional Trade
Agreements in light Of U.S. Federal Law’ 2006.
109
Antony Taubman, ‘Rethinking TRIPS: ‘Adequate Remuneration’ for Non-Voluntary Patent Licensing’ (2008) 11 Journal of
International Economic Law 927, 937.
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designated for doing the same110 without which these rights will have no value 111. Thus, rights
against infringement of intellectual property must be adjudicated by those designated by law.
72. Market regulators and sectoral regulators both may have the same objective of promoting and
sustaining competition, but the manner in which these goals are to be achieved differ, leading
to varied outcomes. 112 Whereas competition law protects competition by curbing anti-
competition practices 113 , sectoral regulators attempt the same by ushering in structural
changes114. Concurrency in such cases, especially with respect to competition law, is highly
impracticable given the experience in alien jurisdictions of such experiments. 115 Such an
approach is riddled with jurisdictional overlap and duplication of work.
73. Concurrency of suits as between the market regulator and the sectoral regulator also leads to
the consideration of non-competition considerations by the latter. For instance, preferring
public interest standard over efficiency considerations 116 or regulatory convenience riding
roughshod over competitive concerns117 in order to expand its rule-making power118. In the
instant matter, the Opposite Party has applied to the relevant authority for acquiring protection
of the IP laws of Westeros, pending which the CCW should not proceed with its own
proceedings, as the same would be “perverse, illegal and impermissible”119.
74. The Copyright Act, 1957 deals exclusively with copyrights and its licensing. The Copyright
Board constituted under Section 11 of the Act, is empowered, inter alia, to grant compulsory
licenses under Section 31 of the Act. 120 On the other hand, there exists no corresponding
provision invested in the CCW under the Competition Act. Hence, the CCW is not the
appropriate forum for the relief sought. Also, on the strength of the aforementioned Section, it
is evident that the Copyright Board is invested with a power which the CCW is not vested
110
Justice R.C. Lahoti, ‘Role Of Judiciary In IPR Development And Adjudication’ (2004) 8 SCC (J).
111
WIPO, ‘Intellectual Property Handbook: Policy, Law and Use’ 2004.
112
Maher M. Dabbah, ‘The Relationship between Competition Authorities and Sector Regulators’ (2011) 70 Company Law
Journals 113, 116.
113
F. Baton, ‘The Anatomy of Market Failure’ (1958) 72(3) Quarterly Journal of Economics 351.
114
P. Weiser, ‘Paradigm Changes in Telecommunications Regulation’ (2000) 71 University of Colorado Law Review 819.
115
House of Lords Select Committee, ‘Report on Economic Regulators in UK’ (2007)
116
A. Joskow, ‘Potential Competition: The Bell Atlantic/NYNEX Merger’ (2000) 16(2) Review of Industrial Organization
185.
117
WorldCom v. FCC, 238 F.3d 449 (2001); J. Karikari, S. Brown and M. Nadji, ‘The Union Pacific Southern Pacific
Railroads Merger: Effect of Trackage Rights on Rates’ (2002) 22(3) Journal of Regulatory Economics 271.
118
H. Shelanski, ‘From Sector-Specific Regulation to Antitrust Law for US Telecommunications: The Prospects For
Transition’ (2002) 26(5) Telecommunications Policy 335.
119
Vodafone India Limited &Ors. v. The Competition Commission of India & Ors., 2017 CompLR 965 (Bombay).
120
Shamsher Kataria Informant v. Honda Siel Cars India Ltd., 2014 CompLR 1 (CCI).
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with, thereby negating the possibility of any repugnancy between the two Acts in a manner
where the acceptance of one will not lead to the abrogation of the other.121 Therefore, there
exists no inconsistency between the two Acts.
75. Further, with respect to database especially, the Copyright Act, 1957 prevails. The said Act
deals exclusively with copyrights and its infringement and is hence a special Act. On the
contrary, the Competition Act aims, inter alia, to “promote and sustain competition, protect
the interests of consumers and ensure freedom of trade… in markets in India”122, making it a
general Act. Also, it is an established principle of law that the special law must prevail over
the general law. 123 Therefore, it is the Copyright Board under the Copyright Act, 1957 which
should be adjudicating upon the granting of compulsory license as claimed by the Informants
and not the CCW, as it has done on previous occasions as well 124.
76. The Court in Ericsson v. CCI125 too had adopted the same line of reasoning. In furtherance of
the same, it had concluded that the nature of remedies provided under both the Acts were
fundamentally different and favored the specific legislation over the general in certain
circumstances. In fact, the Hon’ble Supreme Court in Airtel v. CCI 126 had held that the
sectoral regulator must be given preference over the market regulator post which the market
regulator can take up the matter to its logical conclusion. Therefore, the sectoral regulator i.e.
the Copyright Board must be allowed to investigate and decide on the granting of the license
at the first instance and not the CCW.
In the light of the aforementioned reasons, it is humbly submitted that Competition Commission of
Westeros does not have the jurisdiction to grant access to Burgin & Burkes Inc.’s database and
algorithm.
121
Basti Sugar Mills Co. Ltd. v. State of U.P. & Anr., AIR (1979) SC 262.
122
The Competition Act, § 18.
123
General Manager Telecom v. M. Krishnan & Anr. (2009) 11 SC 690; Chairman, Thiruvalluvar Transport Corporation v.
Consumer Protection Council, (1995) 2 SCC 479.
124
Music Broadcast Pvt Ltd. v. Phonographic Performance Ltd, 2004 (3) ALLMR 196.
125
Telefonaktiebolaget LM Ericsson v. Competition Commission of India, (2016) 4 CompLJ 122 (Del).
126
Competition Commission of India v. Bharti Airtel Limited &Ors, .AIR 2019 SC 113.
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PRAYER
WHEREFORE, in light of the issues raised, arguments advanced and authorities cited it is most
humbly and respectfully requested that this Hon’ble Commission may be pleased to adjudge and
declare on behalf of the Opposite Party that:
I. Burgin & Burkes Inc. has not abused dominant position by tying proprietary apps to the license for
Phoenix OS.
II. Burgin & Burkes Inc. has not foreclosed market access for ‘forked’ OS developers.
IV. Competition Commission of Westeros does not have the jurisdiction to decide on the issue of
access to Burgin & Burkes Inc.’s database and Algorithm.
Sd/-
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