STATEMENT OF FACTS

BACKGROUND-

Luminara was a country rich in patents and demonstrated its commitment to Patents through
the Luminara Patent Act. DatenRuf AG Wave was a company which worked with various
Luminara operators to deploy infrastructure, conduct trials etc. Standard Essential Patents
make up a portion of Wave’s patent portfolio.

Venus was a smartphone manufacturer that contributed to the mobile device market of
Luminara. It had 12% of affordable smartphone sales market in Luminara.

PATENT INFRINGMENT BY VENUS-

Wave notified Venus of patent infringement and pursued Venus to enter into FRAND license
and sign an NDA. However, Venus pushed for specific information from Wave about the
patent infringement by it. On February 5, 2020 a written communication was provided by
Wave of patent violations by Venus.

THE ONSET OF PANDEMIC AND ITS AFTERMATH-

Due to Pandemic, the meeting which was earlier decided could not go further, on November
10, 2020 Wave again requested Venus for a meeting along with entering into PLA. Finally, a
meeting was held on April 28, 2021 where Venus sought for more details from Wave. No
resolution was reached between the two companies, hence the patent infringement lawsuit
was filed on March 7, 2023 in the Rayville High Court. It was alleged by Wave that Venus
mobile phones infringed on Wave’s patents for GSM, EDGE, and 5G technology and did not
follow FRAND terms. The High Court gave its judgement by ordering custom authorities to
address wave’s complaints and also negotiated between the parties to enter into a FRAND
license. It appointed a mediator to enable the parties to arrive at an amicable settlement, but it
failed.

VENUS FILED A COMPLAINT-

On June 5, 2023 Venus filed a complaint under section 19(1)(a) of the Luminara Competition
Act, 2002 alleging Wave’s violation of Competition Act provisions before the Competition
Commission of Luminara. Venus asserted that Wave demanded excessive royalty and Venus’s
business would be rendered unviable at such a high royalty rate.

ORDER OF COMPETITION COMMISSION OF LUMINARA-

CCL gave its order in favour of Venus and arrived at a conclusion that information provided
by Venus indicated that Wave’s practices were discriminatory and in contrast to FRAND
terms and directed DG to look into the matter. CCL held that the actions of Wave were prima
facie arbitrary and excessive.

Aggrieved by the order, the Wave approached the Rayville High Court challenging CCL’s
order. Wave challenged the jurisdiction of CCL of investigating into the matter. Wave
contended that the imposition of monetary deposit by the Commission was arbitrary,
excessive and coercive. Wave also contended that Patents Act prevail over Competition Act
in patent related matters.

CCL contended that judicial review under Article 226 of the Constitution cannot be relied
upon as the investigation order by CCL doesn’t constituted a final decision on merits of the
case. CCL clearly argued that both Competition Act and Patents Act works harmoniously and
not in derogation.

Wave, on the other hand contended that Patent Act already has provisions in the Patent Act to
deal with complaints for allegations of portfolio licensing and unfair rates. Therefore,
interference by CCL is not required.

CCL contended it still has the jurisdiction.

The matter is now sub-judice before the Rayville High Court.

 STATEMENT OF JURISDICTION

The Petitioner has approached the Rayville High Court by filing a writ petition under Article
226 of the Constitution, challenging the validity of the order given by the Competition
Commission of Luminara. The respondent reserves the right to challenge the maintainability
of the petition.
 ISSUES RAISED-

1. WHETHER THE HIGH COURT OF RAYVILLE HAS JURISDICTION TO ENTERTAIN

THE CHALLENGE TO THE CCL’S ORDER DATED JULY 14, 2023?

2.
 ARGUMENTS ADVANCED

ISSUE 1- WHETHER THE HIGH COURT OF RAYVILLE HAS JURISDICTION TO

ENTERTAIN THE CHALLENGE TO CCL’S ORDER DATED JULY 14, 2023

It is submitted that the writ petition under Article 226 to challenge the order of CCL is not
maintainable on three grounds. Firstly, the proceedings under Section 26(1) of the
Competition Act, 2002 are not adjudicatory in nature at the stage when the Director General
is investigating into the matter. Secondly, the decision of the Director General did not
constitute a final decision on the merits of the case. Thirdly, a mere show cause notice does
not give rise to any course of action because it does not amount to an adverse order which
affects the rights of any party. It is a well settled principle that a writ lies when some right of
the party is infringed.

(1) Absence of a cause of action to invoke a writ petition under Article 226 of the
Constitution.

It is submitted that the Supreme Court has time and again reiterated through an array of
judgments that the petitioner is mandated to establish a cause of action to seek a writ petition
by providing that a legal right claimed by him has prima facie either been infringed or is
threatened to be infringed by the respondent1. In the present case, the petitioner lacks a legal
right to initiate a cause of action as the decision of the director general did not constitute a
final decision on the merits of the case.

1.1- The proceedings under Section 26(1) of the Competition Act, 2002 are not
adjudicatory in nature at the stage when the Director General is investigating into the
matter-

According to Section 26 (1) of the Competition Act, 2002, “On receipt of a complaint or a
reference from the Central Government or a State Government or a statutory authority or on
its own knowledge or information, under section 19, if the Commission is of the opinion that
there exists a prima facie case, it shall direct the Director General to cause an investigation to

1
Om Prakash Srivastava v. Union of India, (2006) 6 SCC 207.
be made into the matter.” The Director General can take up investigation and proceedings
under this Section on his own knowledge or information also. It has been established in the
case of Intel Technology v. Matric Info Systems & Competition Commission (2022)2 that at
the preliminary stage, the doctrine of res judicata or of precedence, cannot be invoked, as no
case having been decided by the Commission by virtue of impugned order. The High Court
further held that it is not the case that the impugned order is arbitrary or unreasonable that
justify invoking the writ jurisdiction. The Karnataka High Court pointed out that the
proceedings undertaken by the Director General are not adjudicatory in nature and the order
given by the director general also then cannot be said to be arbitrary or unreasonable, when
the proceedings are itself not adjudicatory but just a mere investigation being carried out by
the Director General. The High Court further held that-

“The petitioners hastily rushed to this Court and unjustifiably secured an interim order that
interdicted an inquiry of preliminary nature, for all these years, to the enormous prejudice of
public interest”

&

“The Writ Petition, besides being premature and absolutely devoid of merits, is an abortive
attempt by the petitioners to scuttle the innocuous statutory proceedings of the Commission.
Therefore, this is a fit case for dismissal with exemplary costs”.

Further, in the case of J.K Paper Ltd. v. Competition Commissioner of India (2023)3, the
Gujarat High Court made the following observation-

“The order u/S.26(1) merely directs an investigation. It does not affect the rights and
liabilities of the petitioner. The CCI is to examine the validity of the allegations as to whether
the petitioner’s conduct is anti-competitive. The petitioner has been provided an opportunity
to file its objections and suggestions to the Director General’s (DG) report and the petition is
therefore certainly misconceived”.

In the case before the Gujarat High Court, the Court also held that through the reading of
investigation reports and the orders passed u/s 26 of the Act would indicate that the order is
an administrative order that only forms a prima facie opinion. Thus, it can be said that under

2
Intel Technology v. Matric Info Systems & Competition Commission, (2022) 3 SCC 136.
3
J.K Paper Ltd. v. Competition Commissioner of India, [2023] 149 taxmann.com 127.
section 26(1), the order which is passed is only an administrative order, which cannot be said
to be adjudicatory in nature. Further, the court observed that the petitioner has been given an
opportunity to produce evidence before the DG during the process of investigation and by the
orders impugned, the DG has called upon the petitioner to file its objections/suggestions to
the investigation report. It cannot be said, therefore, that the petitioners’ doors are closed.
Thus, the High Court dismissed the petition on preliminary grounds itself, saying that the writ
petition was filed too early and therefore to not be entertained when the order itself cannot be
challenged at the initial stage.

The Supreme Court in the case of Competition Commission of India v. Steel Authority of
India4, laid down that the exercise of powers by the CCI under Section 26(1) of the Act is not
adjudicatory in nature and the formation of prima facie opinion is only an administrative
process that does not entail civil consequences. The Hon’ble Supreme Court held that-

“Neither any statutory duty is cast on the Commission to issue notice or grant hearing, nor
any party can claim, as a matter of right, notice and/or hearing at the stage of formation of
opinion by the Commission, in terms of section 26(1) that a prima facie case exists for
issuance of a direction to the Director General to cause an investigation to be made into the
matter. However, the Commission, being a statutory body exercising, inter alia, regulatory
jurisdiction, even at that stage, in its discretion and in appropriate cases may call upon the
concerned party(s) to render required assistance or produce requisite information, as per its
directive. The Commission is expected to form such prima facie view without entering
upon any adjudicatory or determinative process”

In the present case also the director general made investigation on the basis of a prima facie
case which was being made out on the basis of serious allegations which were put forth by
Venus. It is to be clearly noted that the investigation so ordered were just to collect evidence
in order to prove the guilt of the petitioner, and no decision was being constituted regarding
the merits of the case, no adjudication in the form of giving punishment such as penalties
were ordered by the Director General.

4
Competition Commission of India v. Steel Authority of India, (2010) 10 SCC 744.
It is thus held that the petition filed by the petitioner was very premature, it was just filed
when the investigation itself was under process and no final decision was given. Hence, it is
liable to be dismissed by the Hon’ble court.

1.2- The decision of the Director General did not constitute a final decision on the merits
of the case-