{"id":861,"date":"2020-11-04T23:04:23","date_gmt":"2020-11-04T23:04:23","guid":{"rendered":"http:\/\/www.chinaiplawupdate.com\/?p=861"},"modified":"2021-03-08T05:03:28","modified_gmt":"2021-03-08T05:03:28","slug":"chinas-state-administration-for-market-regulation-releases-updated-regulations-on-prohibiting-abuse-of-intellectual-property-rights-to-exclude-and-restrict-competition","status":"publish","type":"post","link":"https:\/\/www.chinaiplawupdate.com\/2020\/11\/chinas-state-administration-for-market-regulation-releases-updated-regulations-on-prohibiting-abuse-of-intellectual-property-rights-to-exclude-and-restrict-competition\/","title":{"rendered":"China’s State Administration for Market Regulation Releases Updated Regulations on Prohibiting Abuse of Intellectual Property Rights to Exclude and Restrict Competition"},"content":{"rendered":"<p>On November 3, 2020, China’s State Administration for Market Regulation released the Regulations on prohibiting abuse of intellectual property rights to exclude and restrict competition (<a href=\"http:\/\/gkml.samr.gov.cn\/nsjg\/fgs\/202011\/t20201103_322857.html\">\u5173\u4e8e\u7981\u6b62\u6ee5\u7528\u77e5\u8bc6\u4ea7\u6743\u6392\u9664\u3001\u9650\u5236\u7ade\u4e89\u884c\u4e3a\u7684\u89c4\u5b9a<\/a>).\u00a0 Originally released in 2015, the Regulations were mainly amended October 23, 2020 to remove the exemption for price fixing behaviors as a monopolistic behavior covered by the regulations.<!--more--><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-large wp-image-862\" src=\"http:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2020\/11\/SAMR-1024x642.jpg\" alt=\"\" width=\"840\" height=\"527\" srcset=\"https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2020\/11\/SAMR-1024x642.jpg 1024w, https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2020\/11\/SAMR-300x188.jpg 300w, https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2020\/11\/SAMR-768x482.jpg 768w, https:\/\/www.chinaiplawupdate.com\/wp-content\/uploads\/2020\/11\/SAMR.jpg 1100w\" sizes=\"(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px\" \/><\/p>\n<p>A partial translation follows:<\/p>\n<p style=\"font-weight: 400;\">…<\/p>\n<p style=\"font-weight: 400;\">Article 3 The abuse of intellectual property rights to exclude or restrict competition as mentioned in these regulations refers to monopolistic behaviors such as the violation of the “Anti-Monopoly Law” by operators to exercise intellectual property rights, implement monopoly agreements, and abuse their dominant market position.\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Relevant markets referred to in these regulations include relevant commodity markets and relevant geographic markets, and are defined in accordance with the Anti-Monopoly Law and the \u201cGuidelines for the Definition of Relevant Markets by the Anti-Monopoly Committee of the State Council\u201d, and consider the influence of factors such as intellectual property rights and innovation.\u00a0In anti-monopoly enforcement work involving intellectual property licensing, the relevant commodity market can be a technology market or a product market containing specific intellectual property rights.\u00a0The relevant technology market refers to a market constituted by competition between technologies involved in the exercise of intellectual property rights and similar technologies that can replace each other.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 4 Business operators shall not use the exercise of intellectual property rights to reach monopoly agreements prohibited by Articles 13 and 14 of the Anti-Monopoly Law, unless the business operator can prove that the agreement reached is in compliance with Article 15 of the Anti-Monopoly Law.\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 5: An operator\u2019s exercise of intellectual property rights under any of the following circumstances may not be recognized as a monopoly agreement prohibited by Article 13, Paragraph 1, Paragraph 6, and Article 14, Paragraph 3 of the Anti-Monopoly Law, except where there is evidence to the contrary that the agreement has the effect of eliminating or restricting competition:\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) The total market share of competitive business operators in the relevant market affected by their actions does not exceed 20%, or there are at least four other independently controlled alternatives that can be obtained at reasonable cost in the relevant market;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(2) The market share of the business operator and the counterparty of the transaction in the relevant market does not exceed 30%, or there are at least two other independently controlled alternative technologies available in the relevant market at a reasonable cost.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 6\u00a0Operators with dominant market positions shall not abuse their dominant market positions in the process of exercising intellectual property rights to exclude or restrict competition.\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000The dominant market position is determined and presumed in accordance with Article 18 and Article 19 of the Anti-Monopoly Law.\u00a0An operator\u2019s possession of intellectual property rights can constitute one of the factors in determining its dominant market position, but it cannot be presumed that it has a dominant market position in the relevant market based on the fact that the operator owns intellectual property rights.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 7 Operators with dominant market positions shall not refuse to authorize other operators to use the intellectual property rights under reasonable conditions to eliminate or restrict competition if their intellectual property rights are necessary for production and business activities without proper reasons.\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000The following factors need to be considered at the same time when determining the behavior in the preceding paragraph:<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) The intellectual property right cannot be reasonably substituted in the relevant market and is necessary for other operators to participate in the competition in the relevant market;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(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;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(3) Licensing the intellectual property rights will not cause unreasonable damage to the operator.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 8:\u00a0Operators with dominant market positions, without legitimate reasons, may not conduct the following restricted transactions in the process of exercising intellectual property rights to exclude or restrict competition:\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) Restrict the counterparty of the transaction to only conduct transactions with it;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(2) Restrict the transaction counterparty to only conduct transactions with a designated business operator.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 9\u00a0An operator with a dominant market position, without justified reasons, may not, in the process of exercising intellectual property rights, implement tie-in sales that meet the following conditions at the same time to eliminate or restrict competition:\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) Violating trading conventions, consumption habits, etc., or ignoring the functions of commodities, compulsorily bundling or combining different commodities for sale;\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(2) The implementation of tying behavior enables the operator to extend its dominant position in the tying product market, excluding or restricting other operators from competing in the tying product or the tying product market.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 10\u00a0Operators with dominant market positions shall not perform the following actions with unreasonable restrictions in the process of exercising intellectual property rights without justifiable reasons to exclude or restrict competition:\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) Require the counterparty of the transaction to give exclusive licenses back on the improved technology;<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0(2) The counterparty of the transaction is prohibited from questioning the validity of its intellectual property rights;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(3) Restricting the counterparty of the transaction from using competitive products or technologies without infringing on intellectual property rights after the expiration of the license agreement;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(4) Continue to exercise rights over intellectual property rights whose term of protection has expired or is deemed invalid;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(5) Prohibition of transactions between counterparties and third parties;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(6) Impose other unreasonable restrictions on the counterparty of the transaction.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 11\u00a0: Operators with a dominant market position, without justifiable reasons, shall not, in the process of exercising intellectual property rights, impose differential treatment on counterparties in transactions with the same conditions to exclude or restrict competition.\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 12:\u00a0Operators shall not use patent pooling to engage in activities that eliminate or restrict competition in the process of exercising intellectual property rights.\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000The members of the patent pool shall not use the patent pool to exchange sensitive information related to competition such as output and market division, and reach a monopoly agreement prohibited by Article 13 and Article 14 of the Anti-Monopoly Law, unless the business operator can prove that the agreement reached is in compliance with Article 15 of the Anti-Monopoly Law.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000A patent pool management organization with a dominant market position shall not use the patent pool to implement the following behaviors that abuse its dominant market position without justifiable reasons to exclude or restrict competition:<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) Restrict associate members from licensing patents as independent licensors outside of the joint venture;<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0(2) Restricting associate members or licensees independently or jointly with a third party to develop technologies that compete with pooled patents;<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0(3) Forcing the licensee to exclusively grant back its improved or developed technology to the patent joint management organization or joint members;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u00a0 (4) The licensee is prohibited from questioning the validity of the pooled patents;<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0(5) Practicing differential treatment in terms of trading conditions to associate members with the same conditions or licensees in the same relevant market;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u00a0 \u00a0(6) Other acts of abuse of market dominance recognized by the State Administration for Market Regulation.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000The term \u201cpatent pooling\u201d as mentioned in these Regulations refers to an agreement arrangement whereby two or more patentees jointly license their respective patents to a third party in some form.\u00a0It can be in the form of a special joint venture company established for this purpose, or it can be managed by an associate member or an independent third party.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 13\u00a0Business operators shall not use the formulation and implementation of standards (including the mandatory requirements of national technical regulations, the same below) to engage in activities that eliminate or restrict competition in the process of exercising intellectual property rights.\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Operators with dominant market positions must not implement the following actions to exclude or restrict competition in the process of standard formulation and implementation without legitimate reasons:<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) In the process of participating in the formulation of standards, deliberately not disclose its rights information to the standard-setting organization, or explicitly waiving its rights, but after a certain standard develops to include the patent, the implementer of the standard exercises its patent right.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(2) After its patent has become a standard essential patent, it violates the principles of fairness, reasonableness and non-discrimination, and conducts acts that exclude or restrict competition, such as refusing to license, tying goods, or adding other unreasonable trading conditions in the transaction.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000The standard-essential patent mentioned in these regulations refers to the patent that is indispensable for the implementation of the standard.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 14: Where a\u00a0business operator is suspected of abusing intellectual property rights to exclude or restrict competition, the anti-monopoly law enforcement agency shall conduct investigations in accordance with the Anti-Monopoly Law, the Interim Provisions on Prohibition of Monopoly Agreements, and the Interim Provisions on Prohibition of Abuse of Dominant Market Positions.\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000The anti-monopoly law enforcement agencies referred to in these regulations include the State Administration of Market Supervision and Administration and the market supervision and administration departments of all provinces, autonomous regions, and municipalities directly under the Central Government.<\/p>\n<p style=\"font-weight: 400;\">Article 15 When\u00a0analyzing and determining that an operator is suspected of abusing intellectual property rights to exclude or restrict competition, the following steps can be taken:\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0(1) Determine the nature and manifestation of the operator\u2019s exercise of intellectual property rights;<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 (2) Determining the nature of the mutual relationship among business operators exercising intellectual property rights;<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 (3) Define the relevant market involved in the exercise of intellectual property rights;<\/p>\n<p style=\"font-weight: 400;\">\u3000(4) Identify the market position of the operator who exercises the intellectual property rights;<\/p>\n<p style=\"font-weight: 400;\">\u3000(5) Analyze the impact of operators\u2019 exercise of intellectual property rights on relevant market competition.<\/p>\n<p style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0…<\/p>\n<p style=\"font-weight: 400;\">Article 16 The\u00a0following factors shall be taken into consideration\u00a0when\u00a0analyzing and determining the impact of an operator\u2019s exercise of intellectual property rights on competition:\u00a0\u00a0<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(1) The market position of the operator and the counterparty;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(2) Market concentration of relevant markets;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(3) The difficulty of entering the relevant market;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(4) Industrial practice and the development stage of the industry;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(5) The time and scope of effectiveness of restrictions on output, region, and consumers;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(6) Impact on promotion of innovation and technology promotion;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(7) The innovation ability of the operator and the speed of technological change;<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000(8) Other factors related to the impact of determining the exercise of intellectual property rights on competition.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Article 17: Where a business operator\u2019s abuse of intellectual property rights to exclude or restrict competition constitutes a monopoly agreement, the anti-monopoly law enforcement agency shall order it to stop the illegal activity, confiscate the illegal income, and impose a fine not less than 1%, but not more than 10%, of the previous year\u2019s sales. If\u00a0the\u00a0monopoly\u00a0agreement\u00a0as\u00a0concluded\u00a0has\u00a0not\u00a0been\u00a0implemented,\u00a0a\u00a0fine\u00a0of\u00a0not\u00a0more\u00a0than\u00a0500,000\u00a0yuan\u00a0may\u00a0be\u00a0imposed.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000Where the operator\u2019s abuse of intellectual property rights to exclude or restrict competition constitutes an abuse of market dominance, the anti-monopoly law enforcement agency shall order ceasing the illegal activity, confiscate the illegal income, and impose a fine of not less than 1% but no more than 10% of the previous year\u2019s sales.<\/p>\n<p style=\"font-weight: 400;\">\u3000\u3000When determining the amount of a specific fine, the anti-monopoly law enforcement agency shall consider the nature, circumstances, extent, and duration of the violation.<\/p>\n<p>…<\/p>\n","protected":false},"excerpt":{"rendered":"<p class=\"excerpt\">On November 3, 2020, China’s State Administration for Market Regulation released the Regulations on prohibiting abuse of intellectual property rights to exclude and restrict competition (\u5173\u4e8e\u7981\u6b62\u6ee5\u7528\u77e5\u8bc6\u4ea7\u6743\u6392\u9664\u3001\u9650\u5236\u7ade\u4e89\u884c\u4e3a\u7684\u89c4\u5b9a).\u00a0 Originally released in 2015, the Regulations were mainly amended October 23, 2020 to remove the exemption for price fixing behaviors as a monopolistic behavior covered by the regulations.<\/p>\n<p class=\"more-link\"><a href=\"https:\/\/www.chinaiplawupdate.com\/2020\/11\/chinas-state-administration-for-market-regulation-releases-updated-regulations-on-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":[7,34],"tags":[],"coauthors":[22],"yoast_head":"<!-- This site is optimized with 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