China Publishes the 2nd Version of the Anti-Monopoly Guidelines on the Abuse of Intellectual Property Rights

By Stephanie Wu

Abstract

 Article 55 of the Anti-Monopoly Law of the People’s Republic of China (“AML”) provides that the AML is not applicable to the exercise of intellectual property rights by undertakings in accordance with laws and administrative regulations on intellectual property rights; however, the AML shall be applicable to conducts of undertakings that eliminate or restrict competition by abusing intellectual property rights. Article 55 AML serves as the legal basis for anti-monopoly law’s intervention in the abuse of intellectual property rights (“IPRs”) in China.

Since the implementation of the AML in 2008, the interplay between the AML and the exercise of IPRs has been scrutinised on several occasions by the AML public enforcement agencies and courts. For instance, the National Development and Reform Commission (“NDRC”) in 2015 fined Qualcomm approximately US$ 975 million for having abused its dominant position by charging unfairly high price when licensing wireless standard essential patents (“SEPs”) as well as tying and imposing unreasonable trading conditions without justification. Another example is the private action of Huawei v. IDC in which the appellate court, the Guangdong Provincial High People’s  Court in 2013 upheld the judgment of the court of first instance and found IDC to have abused its dominant position by excessive pricing practice and tying non-SEPs to SEPs. In 2014, the Ministry of Commerce (“MOFCOM”), the merger