The Revised Regulations on Preventing the Use of Intellectual Property Rights in China to Prevent or Restrain Competition
Beginning on August 1, 2023, China’s State Administration for Market Regulation (SAMR) published revised Provisions on Prohibiting the Abuse of Intellectual Property Rights to Exclude or Restrict Competition will be in effect. According to the SAMR, the amendments’ goals are to promote innovation, preserve the market’s system of fair competition in the area of intellectual property, and help build a single national market.
By referencing the significant and difficult anti-monopoly issues in the field of intellectual property, the provisions aim to strike a balance between the protection of intellectual property and the maintenance of fair competition order, with the goals of strengthening rule guidance and fostering fair competition and innovative development. The following changes have been made to the 2015 version of the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Exclude or Restrict Competition:
- The three types of monopolistic acts—using intellectual property to obtain monopoly agreements, abusing a dominant market position, and engaging in undertaking concentration—that have or may have the potential to obstruct or limit competition are covered by this regulation.
- The definition of relevant markets, the determination and presumption of market dominance, the determination of relevant monopolistic acts, the considerations for reviewing the concentration of undertakings, and the specific types of additional restrictive conditions are all improved and refined in the Proposition in accordance with the Anti-Monopoly Law revised in 2022 and taking into account the characteristics of intellectual property rights and the actual regulatory reality.
- The provisions amend the pertinent regulations on patent pooling and prohibit businesses and participants from utilizing the pool to carry out monopolistic activities. Additionally, it increases the oversight of monopolistic behavior during the development and use of standards by forbidding market leaders from holding “patent hostage” activities with standards-essential patents.
The Provisions represent the most recent approaches used by Chinese authorities to oversee the interplay between the enforcement of intellectual property rights and competition law:
- It considers bolstering anti-monopoly oversight and defending intellectual property rights. Antitrust laws and intellectual property rights laws are intentionally matched to protect fair competition and encourage the creation of new ideas. Intellectual property rights should only be used in compliance with the law and within a reasonable range; once they are extended beyond this range, they will damage innovation and fair competition in the market. It successfully stops the abuse of intellectual property rights to exclude or restrict competition and encourages the orderly flow and efficient allocation of market resources and innovation factors by defining the boundaries between private rights and the protection of the public interest, as well as between industry and competition supervision.
- It considers fostering creative development and upholding fair competition. Promoting creative development is the ultimate objective of safeguarding fair competition in the marketplace. It is crucial to managing the relationships between development and regulation, efficiency and fairness, vitality and order in order to enhance anti-monopoly monitoring and enforcement in the area of intellectual property. In the area of intellectual property, it focuses on enhancing the stability, relevance, and forward-looking character of the anti-monopoly system and offers a more detailed and thorough regulatory framework for anti-monopoly supervision and law enforcement. It efficiently directs and controls market competition in the area of intellectual property, upholds the rules of fair competition, and fosters an environment on the market that is favorable to innovation and growth.
- It considers the interests of implementers and owners of intellectual property rights in terms of development. The primary topics that encourage innovation and development are both IP property holders and implementers. In order to fully stimulate the innovation vitality of intellectual property in the entire society, it is necessary to take into account the development interests of intellectual property rights holders and implementers. This will strengthen anti-monopoly supervision and law enforcement in the area of intellectual property.
In order to fully implement the new Anti-Monopoly Law’s system and spirit, it is important to promulgate and put into effect the amended Provisions. This will encourage fair competition and innovative growth, accelerate the establishment of a unified national market, and support the high-quality development of China’s economy.
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