State Administration for Market Regulation revised the Provision on Prohibiting the Abuse of Intellectual Property Rights to Preclude or Restrict Competition (the “Provision”, 2015 version) on the date of October 23rd, 2020 aiming to keep equal competition, inspire innovation, and especially to protect lawful rights of consumers.

The abuse of intellectual property rights to preclude or restrict competition referred here means those actions which are implementations of monopoly agreement or abuse of market dominance by operators.

In this Provision, it’s stated that what kinds of behaviors or actions could not be implemented for the operators otherwise it would be deemed as the abuse of intellectual property rights to preclude or restrict competition. Those regulations are listed as follows:

1. Operators with market dominance shall not abuse their dominant position to exclude or restrict competition when using intellectual property rights.
2. Operators with market dominance shall not refuse to permit other operators to use the intellectual property rights under reasonable conditions and to exclude or restrict competition without proper reasons if its intellectual property right is necessary for production and operations.
3. Operators with market dominance shall not limit the transactions without proper reasons as limitation that the other party is restrained to only transact with this operator or any special operator.
4. Operators with market dominance shall not use tied sale without proper reasons to exclude or restrict competition, like ignoring the functions of the commodities, or compulsory bundling or combination of different commodities in violation of trading practice and consumption habits.
5. Operators with market dominance shall not attach unreasonable limitation without proper reasons to exclude or restrict competition as requiring the counterparty to give exclusive authorization back on its improved technology, prohibiting the counterparty to challenges the validity of its intellectual property, restricting the counterparty to use the commodities or technologies with competiveness without infringing intellectual property rights after the expiry of the term of the license, continuing exercising the intellectual property while the protection period has expired or is deemed invalid, and prohibiting the counterparty from trading with a third party.
6. Operators with market dominance shall not treat the counterparties with the same conditions differently without proper reasons to exclude or restrict competition when using intellectual property rights.
7. Operators shall not use patent association to engage aiming to exclude or restrict competition when using intellectual property rights. Patent association management organizations with market dominance shall not use patent association to abuse their dominant positions in the market in order to exclude or restrict competition without proper reasons.
8. Operators shall not use the formulation and implementation of standards (including the mandatory requirements of the national technical specifications) to exclude or restrict competition while using their intellectual property rights.

The antimonopoly law enforcement authorities referred in this Provision include State Administration for Market Regulation and provincial Administrations for Market Regulation.

If you want to read the complete article, you can refer to the below link (in Chinese only):  http://www1.shanghaiinvest.com/cn/viewfile.php?id=15456

If you have any question, please contact me.

Mr. Mike Chang (Partner)

TEL: 0086-21-68868321

Email: mikechang@shanghaiinvest.com