{"id":2641,"date":"2023-06-29T20:56:00","date_gmt":"2023-06-29T20:56:00","guid":{"rendered":"https:\/\/www.chinaiplawupdate.com\/?p=2641"},"modified":"2023-06-29T20:56:00","modified_gmt":"2023-06-29T20:56:00","slug":"chinas-state-administration-for-market-regulation-releases-provisions-prohibiting-abuse-of-intellectual-property-rights-to-exclude-and-restrict-competition","status":"publish","type":"post","link":"https:\/\/www.chinaiplawupdate.com\/2023\/06\/chinas-state-administration-for-market-regulation-releases-provisions-prohibiting-abuse-of-intellectual-property-rights-to-exclude-and-restrict-competition\/","title":{"rendered":"China’s State Administration for Market Regulation Releases “Provisions Prohibiting Abuse of Intellectual Property Rights to Exclude and Restrict Competition”"},"content":{"rendered":"<p>On June 29, 2023, China’s <a href=\"https:\/\/www.samr.gov.cn\/\">State Administration for Market Regulation<\/a> (SAMR) released the Provisions Prohibiting Abuse of Intellectual Property Rights to Exclude and Restrict Competition (<a href=\"https:\/\/www.samr.gov.cn\/zw\/zfxxgk\/fdzdgknr\/fgs\/art\/2023\/art_e155397fbe5c4c05ad3c1838c1322ad2.html\">\u7981\u6b62\u6ee5\u7528\u77e5\u8bc6\u4ea7\u6743\u6392\u9664\u3001\u9650\u5236\u7ade\u4e89\u884c\u4e3a\u89c4\u5b9a<\/a>) effective August 1, 2023. These Provisions update the Regulations on Prohibiting the Abuse of Intellectual Property Rights to Exclude and Restrict Competition issued in 2015.\u00a0 The Provisions cover licensing, standards setting and patent pooling among other areas.<!--more--><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-2642\" src=\"http:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2023\/06\/SAMR-IP-Abuse-Rules.jpg\" alt=\"\" width=\"1117\" height=\"640\" srcset=\"https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2023\/06\/SAMR-IP-Abuse-Rules.jpg 1117w, https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2023\/06\/SAMR-IP-Abuse-Rules-300x172.jpg 300w, https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2023\/06\/SAMR-IP-Abuse-Rules-1024x587.jpg 1024w, https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2023\/06\/SAMR-IP-Abuse-Rules-768x440.jpg 768w\" sizes=\"(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px\" \/><\/p>\n<p>Excerpts follow:<\/p>\n<section><strong><span>Article 9<\/span><\/strong><span>\u00a0\u00a0 An operator with a dominant market position shall not, in the process of exercising intellectual property rights, license intellectual property rights at unfairly high prices or sell products containing intellectual property rights, so as to exclude or restrict competition.<\/span><\/section>\n<section><\/section>\n<section><span>The following factors may be considered in determining the conduct referred to in the preceding paragraph:<\/span><\/section>\n<section><\/section>\n<section><span>(1) The R&D cost and payback cycle of the intellectual property;<\/span><\/section>\n<section><span>(2) The licensing fee calculation method and licensing conditions for the intellectual property rights;<\/span><\/section>\n<section><span>(3) The historical license fees or license fee standards that can be compared with the intellectual property rights;<\/span><\/section>\n<section><span>(4) The undertaking made by the operator regarding the licensing of the intellectual property rights;<\/span><\/section>\n<section><span>(5) Other relevant factors that need to be considered.<\/span><\/section>\n<section><\/section>\n<section><strong><span>Article 10<\/span><\/strong><span>\u00a0\u00a0 A business operator with a dominant market position shall not refuse to allow other business operators to use the intellectual property rights on reasonable terms in the process of exercising intellectual property rights without justified reasons, so as to exclude or restrict competition.<\/span><\/section>\n<section><\/section>\n<section><span>The following factors shall be taken into consideration at the same time when determining the conduct referred to in the preceding paragraph:<\/span><\/section>\n<section><\/section>\n<section><span>(1) The intellectual property right cannot be reasonably substituted in the relevant market and is necessary for other business operators to participate in the competition in the relevant market;<\/span><\/section>\n<section><span>(2) Refusal to license the intellectual property rights will adversely affect competition or innovation in the relevant market, and harm the interests of consumers or the public interest;<\/span><\/section>\n<section><span>(3) The licensing of the intellectual property rights will not cause unreasonable damage to the operator.<\/span><\/section>\n<section><\/section>\n<section>\n<section><strong><span>Article 11<\/span><\/strong><span>\u00a0\u00a0 An operator with a dominant market position shall not, without justified reasons, engage in the following behaviors of restricting transactions to exclude or restrict competition in the process of exercising intellectual property rights:<\/span><\/section>\n<section><\/section>\n<section><span>(1) Restricting the counterparty to the transaction to only conduct transactions with it;<\/span><\/section>\n<section><span>(2) Restricting counterparties to transactions to only conduct transactions with their designated business operators;<\/span><\/section>\n<section><span>(3) Restricting counterparties to transactions to not conduct transactions with specific business operators.<\/span><\/section>\n<section><\/section>\n<\/section>\n<section>\n<section><strong><span>Article 13\u00a0<\/span><\/strong><span>\u00a0An operator with a dominant market position shall not impose the following unreasonable transaction conditions to exclude or restrict competition in the process of exercising intellectual property rights without justified reasons:<\/span><\/section>\n<section><\/section>\n<section><span>(1) Requiring the counterparty of the transaction to\u00a0 exclusively grant back its improved technology, or require the counterparty of the transaction to carry out cross-licensing in the same technical field when no reasonable consideration is provided;<\/span><\/section>\n<section><span>(2) Prohibiting the counterparty to the transaction from challenging the validity of its intellectual property rights;<\/span><\/section>\n<section><span>(3) Restricting the counterparty to the transaction from using competitive technologies or products after the expiration of the license agreement without infringing intellectual property rights;<\/span><\/section>\n<section><span>(4) Imposing other unreasonable transaction conditions on the transaction counterparty.<\/span><\/section>\n<\/section>\n<section><\/section>\n<section>\n<section><strong><span>Article 17<\/span><\/strong><span>\u00a0\u00a0 Business operators shall not, in the process of exercising intellectual property rights, use patent joint ventures to engage in acts of eliminating or restricting competition.<\/span><\/section>\n<section><\/section>\n<section><span>Members of patent pools are not allowed to exchange price, output, market division and other sensitive information related to competition, and to reach monopoly agreements prohibited by Article 17 and Paragraph 1 of Article 18 of the Anti-Monopoly Law unless\u00a0the operator can prove that the agreement reached is in compliance with the provisions of paragraphs 2 and 3 of Article 18 and Article 20 of the Anti-Monopoly Law.<\/span><\/section>\n<section><\/section>\n<section><span>A patent pool entity with a dominant market position or a member of a patent pool shall not use the patent pool to engage in the following acts of abusing its dominant market position:<\/span><\/section>\n<section><\/section>\n<section><span>(1) Licensing joint venture patents at unfairly high prices;<\/span><\/section>\n<section><span>(2) Restricting the scope of use of patents of joint venture members or licensees without justified reasons;<\/span><\/section>\n<section><span>(3) Restricting joint venture members from licensing patents as independent licensors outside the joint venture without justified reasons;<\/span><\/section>\n<section><span>(4) Restricting joint venture members or licensees to independently or jointly with a third party to research and develop technologies that compete with joint venture patents without justified reasons;<\/span><\/section>\n<section><span>(5) Without justifiable reasons, forcing the licensee to exclusively grant back its improved or developed technology to the patent pool entity or members of the patent pool;<\/span><\/section>\n<section><span>(6) Prohibiting the licensee from questioning the validity of the pooled patent without justified reasons;<\/span><\/section>\n<section><span>(7) Compulsory combination licensing of competitive patents, or compulsory combination licensing of non-essential patents, terminated patents and other patents without justified reasons;<\/span><\/section>\n<section><span>(8) Differentiate treatment in terms of transaction conditions between joint venture members with the same conditions or licensees in the same relevant market without justifiable reasons;<\/span><\/section>\n<section><span>(9) Other acts of abusing market dominance as determined by the State Administration for Market Regulation.<\/span><\/section>\n<section><\/section>\n<section><span>The term \u201cpatent pooling\u201d as mentioned in these Provisions means that two or more business operators jointly license their respective patents to pooling members or third parties.\u00a0The parties to a patent pool usually entrust the pool members or an independent third party to manage the pool.\u00a0The specific ways of joint operation include reaching an agreement, establishing a company or other entities, etc.<\/span><\/section>\n<section><\/section>\n<section><strong><span>Article 18<\/span><\/strong><span>\u00a0\u00a0 Business operators shall not use the formulation and implementation of standards to reach the following monopoly agreements in the process of exercising intellectual property rights without justifiable reasons:<\/span><\/section>\n<section><\/section>\n<section><span>(1) Jointly excluding specific business operators from participating in the formulation of standards with competing business operators, or excluding specific business operators from relevant standard technical solutions;<\/span><\/section>\n<section><span>(2) Jointly excluding other specific operators from implementing relevant standards with operators that have a competitive relationship;<\/span><\/section>\n<section><span>(3) Agreeing with competing operators not to implement other competitive standards;<\/span><\/section>\n<section><span>(4) Other monopoly agreements identified by the State Administration for Market Regulation.<\/span><\/section>\n<section><\/section>\n<section><strong><span>Article 19<\/span><\/strong><span>\u00a0\u00a0 Operators with a dominant market position shall not engage in the following acts in the process of formulating and implementing standards to exclude or restrict competition:<\/span><\/section>\n<section><\/section>\n<section><span>(1) During the process of participating in the standard formulation, failing to timely and fully disclose its rights information in accordance with the regulations of the standard setting organization, or explicitly waiving its rights, but claiming the patent right to the standard implementer after the standard involves the patent;\u00a0\u00a0<\/span><\/section>\n<section><span>(2) After its patent becomes a standard essential patent, it violates the principle of fairness, reasonableness and non-discrimination, licenses at an unfairly high price, refuses to license without justified reasons, sells goods in tying or imposes other unreasonable transaction conditions, implements differential treatment, etc. ;<\/span><\/section>\n<section><span>(3) In the process of licensing standard essential patents, in violation of the principles of fairness, reasonableness, and non-discrimination, and without good faith negotiations, request the court or other relevant departments to make judgments, rulings, or decisions prohibiting the use of relevant intellectual property rights, forcing the licensee to accept unjustly high prices or other unreasonable trading conditions;<\/span><\/section>\n<section><span>(4) Other acts of abusing market dominance as determined by the State Administration for Market Regulation.<\/span><\/section>\n<section><\/section>\n<section><span>The standard-essential patents mentioned in these regulations refer to the patents that are indispensable for the implementation of the standard.<\/span><\/section>\n<section><\/section>\n<\/section>\n<section>The full text is available <a href=\"https:\/\/www.samr.gov.cn\/zw\/zfxxgk\/fdzdgknr\/fgs\/art\/2023\/art_e155397fbe5c4c05ad3c1838c1322ad2.html\">here<\/a> (Chinese only).<\/section>\n","protected":false},"excerpt":{"rendered":"<p class=\"excerpt\">On June 29, 2023, China’s State Administration for Market Regulation (SAMR) released the Provisions Prohibiting Abuse of Intellectual Property Rights to Exclude and Restrict Competition (\u7981\u6b62\u6ee5\u7528\u77e5\u8bc6\u4ea7\u6743\u6392\u9664\u3001\u9650\u5236\u7ade\u4e89\u884c\u4e3a\u89c4\u5b9a) effective August 1, 2023. These Provisions update the Regulations on Prohibiting the Abuse of Intellectual Property Rights to Exclude and Restrict Competition issued in 2015.\u00a0 The Provisions cover licensing, standards setting and patent pooling among other areas.<\/p>\n<p class=\"more-link\"><a href=\"https:\/\/www.chinaiplawupdate.com\/2023\/06\/chinas-state-administration-for-market-regulation-releases-provisions-prohibiting-abuse-of-intellectual-property-rights-to-exclude-and-restrict-competition\/\" class=\"button\">Continue Reading<\/a><\/p>","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,5],"tags":[],"coauthors":[22],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>China's State Administration for Market Regulation Releases "Provisions Prohibiting Abuse of Intellectual Property Rights to Exclude and Restrict Competition" - China IP Law Update<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.chinaiplawupdate.com\/2023\/06\/chinas-state-administration-for-market-regulation-releases-provisions-prohibiting-abuse-of-intellectual-property-rights-to-exclude-and-restrict-competition\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China's State Administration for Market Regulation Releases "Provisions Prohibiting Abuse of Intellectual Property Rights to Exclude and Restrict Competition" - China IP Law Update\" \/>\n<meta property=\"og:description\" content=\"On June 29, 2023, China’s State Administration for Market Regulation (SAMR) released the Provisions Prohibiting Abuse of Intellectual Property Rights to Exclude and Restrict Competition (\u7981\u6b62\u6ee5\u7528\u77e5\u8bc6\u4ea7\u6743\u6392\u9664\u3001\u9650\u5236\u7ade\u4e89\u884c\u4e3a\u89c4\u5b9a) effective August 1, 2023. 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