porno Chinese Law | China: Comments of Proposed China Anti-Monopoly Enforcement Guidelines November 2012
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Comments of Proposed China Anti-Monopoly Enforcement Guidelines November 2012

Q1: What are the main comments on the Fifth Draft of the Guide on Anti- Monopoly Law Enforcement in the Field of Intellectual Property Rights (Hereinafter referred to as the “Draft Guide”) of China’s State Administration for Industry and Commerce (Hereinafter referred to as the “SAIC”)?


A1: First of all, to omit the Article 17(2), since it would be the first time expressly extend the essential facilities doctrine to intellectual property rights (Hereinafter referred to as the “IPRs”), which is in tension with WTO obligations and international norms. Secondly, it is better to replace unnecessarily broad prohibitions and onerous and difficult to prove requirements with standards that comport with the “rule of reason” standard that is the default mode of analysis in other jurisdictions. Thirdly, number of clarifications need to be added.


Q2: What are the main contents of the Article 17?


A2: Article 17 begins with the general principle, which is consistent with international norms, that unconditional or nondiscriminatory unilateral refusals to license IPRs are “normally” permissible. Since China’s Anti-Monopoly Law (Hereinafter referred to as the “AML”) does not include any reference to the essential facilities doctrine which is incorporated in the second paragraph of Article 17, nor does it define the abuses of IPRs. The essential facilities doctrine is incorporated in Article 4(5) of the SAIC Rules on Prohibition of Abuses of Dominant Market Positions without mentioning whether it applies to the application of IPRs. Since the very essence of an IPR is the right unilaterally to exclude. Applying the essential facilities doctrine to IPRs would substantially impinge upon IPR holders’ the right to exclude and create long-term disincentives to innovate in general.


Q3: What if to modify the Article 17(2) instead of getting rid of it?


A3: The Article 17(2) could be retained if it could revised to proof that the competitor seeking access cannot practically or reasonably work around the IP, and compelled access would further the legitimate interests of consumers.


Q4: Which articles should be enriched?



1. Article 7. Its preamble should be modified to clarify that the anti-monopoly enforcement authorities “will presume any underlying IPRs are valid unless there is evidence that the IPRs were obtained from the IPR authorities through fraud or deceit or that the IPR holder has knowledge that the IPR in invalid” to be in line with the “exercise” word of the Article 7.


2. Article11. While it details the criteria for establishing whether the exercise of an IPR is efficient, it is less clear regarding the practices that may be viewed as eliminating or restricting competition, or what evidence is necessary to show an adverse effect on competition. It seems that the contents in Article 11 should be in line with those provided in Article 7(6), by requiring the anti-monopoly enforcement authority investigating the practice to collect and evaluate evidence of anticompetitive effects of the conduct being examined that can be weighed against pro-competitive effects, without any presumption that the practice is anticompetitive.


3. Article 12. It provides useful guidance on market share levels that would afford undertakings safe harbors from antitrust scrutiny. However, it can be interpreted to mean that undertakings whose market shares exceed the thresholds will be presumed to possess market power. This is inconsistent with the Recommended Practices of the International Competition Network. It should be clarified that indicate market power should be determined according to the specific circumstances of the market structure, the competitive situation, and the evidence of anticompetitive effects as provided in Article 9. Furthermore, it could be helpful to illustrate clearly that whether the safe harbor limits stipulated in Article 12 will be calculated by reference to goods markets only or potentially also by reference to technology markets.


4. Article 16. The prohibition stating that “licensing intellectual property rights at unfairly high prices” is inconsistent with accepted law to punish aggressive competition, directly contrary to the accepted purpose of competition laws. Since it is difficult and in some cases impossible to compare prices among different licenses because IPRs are usually highly differentiated products. This kind of prohibition might ultimately have the unintended effect of imposing compulsory licensing in inappropriate situations.


5. Article 18. In order to be consistent with the processes set forth in Article 7 and 11, the “consideration of the pro-competitive and efficiency effects of the tied sale to the market” should be added into Article 18, and the third criteria needs to be clarified to provide for considering whether competition in the market of the tied product is adversely affected.


6. Article 19. There might be some ambiguity as to whether the Draft Guide intends to address the feedback grant of the “exclusive license” in this article. It should be specified that the feedback grant is exclusive when it allows only the licensor and the licensee to exercise the IPRs created by the licensee using the licensor’s IPR. If the intent is to address exclusive feedback grants, Article 19(1) seems a little bit over restrict that might chill some potentially pro-competitive licensing agreements.


7. Article 23. Regarding the last paragraph of this article, the appropriate standard should be whether the particular technical measure has an unreasonable adverse effect on competition. If the primary effect is to protect a copyright, then its effects on competition should not be considered unreasonable.


8. The Catchall Provisions in articles, such as Article 13(6), 14(3) and 19. Those catchall provisions should be specified respectively.


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