Antitrust Enforcement with Respect to Intellectual Property in China

May 28, 2015

CPI Asia Column edited by Vanessa Yanhua Zhang (Global Economics Group) presents:

Antitrust Enforcement with Respect to Intellectual Property in China – Fay Zhou, Xi Liao & Christoph Barth (LinkLaters LLP)

Enforcement activity at the intersection of antitrust and intellectual property (“IP”) rights is one of the hot topics these days and heavily debated among practitioners and industry participants in the US and EU. It is widely recognised that antitrust and IP law share the common purpose of promoting innovation and enhancing consumer welfare and are thus complementary instruments. Antitrust law seeks to promote consumer welfare by prohibiting certain actions that may harm competition with respect to either existing or new ways of serving consumers. IP law grants technology owners a monopoly to reward them for the development of the respective technology and incentivise further innovation. In the absence of IP law, rapid imitation would chill innovation, ultimately to the detriment of consumers. It is thus recognised that antitrust enforcement in this area should be limited and primarily focus on transactions capable of lessening competition among rival technologies, while other enforcement action may interfere with the principal goals of IP rights. Attempts to restrain licensing fees in the short term can thus undermine incentives to invest and thereby slow down innovation and economic growth.

China is still a comparatively new player in the anti