diff --git a/pip/req/req_install.py b/pip/req/req_install.py
index 6911fba..8524932 100644
--- a/pip/req/req_install.py
+++ b/pip/req/req_install.py
@@ -34,7 +34,7 @@ from pip.locations import (
 )
 from pip.utils import (
     display_path, rmtree, ask_path_exists, backup_dir, is_installable_dir,
-    dist_in_usersite, dist_in_site_packages, egg_link_path,
+    dist_in_usersite, dist_in_site_packages, dist_in_install_path, egg_link_path,
     call_subprocess, read_text_file, FakeFile, _make_build_dir, ensure_dir,
     get_installed_version, normalize_path, dist_is_local,
 )
@@ -1049,7 +1049,7 @@ class InstallRequirement(object):
                         "lack sys.path precedence to %s in %s" %
                         (existing_dist.project_name, existing_dist.location)
                     )
-            else:
+            elif dist_in_install_path(existing_dist):
                 self.conflicts_with = existing_dist
         return True
 
diff --git a/pip/req/req_set.py b/pip/req/req_set.py
index 76aec06..b93304a 100644
--- a/pip/req/req_set.py
+++ b/pip/req/req_set.py
@@ -18,7 +18,8 @@ from pip.exceptions import (InstallationError, BestVersionAlreadyInstalled,
                             UnsupportedPythonVersion)
 from pip.req.req_install import InstallRequirement
 from pip.utils import (
-    display_path, dist_in_usersite, ensure_dir, normalize_path)
+    display_path, dist_in_usersite, dist_in_install_path, ensure_dir,
+    normalize_path)
 from pip.utils.hashes import MissingHashes
 from pip.utils.logging import indent_log
 from pip.utils.packaging import check_dist_requires_python
@@ -437,10 +438,12 @@ class RequirementSet(object):
 
                 if not best_installed:
                     # don't uninstall conflict if user install and
-                    # conflict is not user install
+                    # conflict is not user install or conflict lives
+                    # in a different path (/usr/lib vs /usr/local/lib/)
                     if not (self.use_user_site and not
-                            dist_in_usersite(req_to_install.satisfied_by)):
-                        req_to_install.conflicts_with = \
+                            dist_in_usersite(req_to_install.satisfied_by) or not
+                            dist_in_install_path(req_to_install.satisfied_by)):
+                        req_to_install.conflicts_with = \
                             req_to_install.satisfied_by
                     req_to_install.satisfied_by = None
 
@@ -644,10 +647,12 @@ class RequirementSet(object):
                 if req_to_install.satisfied_by:
                     if self.upgrade or self.ignore_installed:
                         # don't uninstall conflict if user install and
-                        # conflict is not user install
+                        # conflict is not user install or conflict lives
+                        # in a different path (/usr/lib vs /usr/local/lib/)
                         if not (self.use_user_site and not
                                 dist_in_usersite(
-                                    req_to_install.satisfied_by)):
+                                    req_to_install.satisfied_by) or not
+                                dist_in_install_path(req_to_install.satisfied_by)):
                             req_to_install.conflicts_with = \
                                 req_to_install.satisfied_by
                         req_to_install.satisfied_by = None
diff --git a/pip/utils/__init__.py b/pip/utils/__init__.py
index 815bd33..0ed59f7 100644
--- a/pip/utils/__init__.py
+++ b/pip/utils/__init__.py
@@ -22,7 +22,7 @@ from pip.exceptions import InstallationError
 from pip.compat import console_to_str, expanduser, stdlib_pkgs
 from pip.locations import (
     site_packages, user_site, running_under_virtualenv, virtualenv_no_global,
-    write_delete_marker_file,
+    write_delete_marker_file, distutils_scheme,
 )
 from pip._vendor import pkg_resources
 from pip._vendor.six.moves import input
@@ -315,6 +315,16 @@ def dist_in_site_packages(dist):
     ).startswith(normalize_path(site_packages))
 
 
+def dist_in_install_path(dist):
+    """
+    Return True if given Distribution is installed in
+    path matching distutils_scheme layout.
+    """
+    norm_path = normalize_path(dist_location(dist))
+    return norm_path.startswith(normalize_path(
+        distutils_scheme("")['purelib'].split('python')[0]))
+
+
 def dist_is_editable(dist):
     """Is distribution an editable install?"""
     for path_item in sys.path: