On June 29, 2023, the State Administration for Market Regulation announced the revised "Provisions on Prohibiting the Abuse of Intellectual Property Rights to Exclude or Restrict Competition" (hereinafter referred to as the new "Provisions"), which will come into effect on August 1, 2023. This marks the comprehensive coverage of China's anti-monopoly system rules in the field of intellectual property, the coordination and consistency with relevant anti-monopoly guidelines, and the further refinement and improvement of specific content.

1、 The basic framework of the anti-monopoly system rules in China's intellectual property field has been established, but it is necessary to achieve the unification, coordination, and further improvement of the rules

Implementing anti-monopoly laws in the field of intellectual property involves maintaining a balance between competition and promoting innovation, making it both important and complex. In recent years, our country has attached great importance to this issue through relevant legislation and policy measures. From the principle provisions of Article 68 (formerly Article 55) of the Anti Monopoly Law to the strategic focus on "preventing the abuse of intellectual property rights" in the National Intellectual Property Strategy Outline, from the requirement of "improving the anti-monopoly review system to prevent the abuse of intellectual property rights" in the National Innovation Driven Development Strategy Outline to the requirement of "improving the legal system for regulating the abuse of intellectual property rights and legislation related to anti-monopoly, unfair competition and other fields related to intellectual property rights" in the Outline for Building an Intellectual Property Power (2021-2035), all indicate that China attaches great importance to protecting intellectual property rights, as well as protecting and promoting market competition. On November 30, 2020, General Secretary Xi Jinping emphasized during the 25th collective study session of the Political Bureau of the Communist Party of China Central Committee on strengthening intellectual property protection in China that "we will comprehensively promote the revision of the Patent Law, Trademark Law, Copyright Law, Anti Monopoly Law, Science and Technology Progress Law, and enhance the consistency between laws"; We need to coordinate and do a good job in intellectual property protection, anti-monopoly, fair competition review, etc., and promote the independent and orderly flow and efficient allocation of innovation factors; Research and formulate relevant systems to prevent the abuse of intellectual property rights; We need to improve laws, regulations, and policy measures related to intellectual property anti-monopoly and fair competition, and form legitimate and effective means of restraint. This puts forward clear requirements for China to establish and improve anti-monopoly institutional rules in the field of intellectual property.

Although Article 68 of China's Anti Monopoly Law has principled provisions on anti-monopoly issues in the field of intellectual property, which states that "the behavior of operators exercising intellectual property rights in accordance with relevant laws and administrative regulations does not apply to this Law; however, the behavior of operators abusing intellectual property rights to exclude or restrict competition applies to this Law." However, how to correctly understand the behavior of abusing intellectual property rights to exclude or restrict competition in practice, clarify the boundary between legitimate rights exercise behavior and the abuse behavior of excluding or restricting competition, and accurately apply the law, requires the formulation of relevant regulations and guidelines to provide detailed rules to better guide anti-monopoly law enforcement practice and enhance operators' expectations of the legality of their own business activities. Therefore, on April 7, 2015, the former State Administration for Industry and Commerce issued anti-monopoly regulations in the field of intellectual property in China - the "Provisions on Prohibiting the Abuse of Intellectual Property to Exclude or Restrict Competition" (hereinafter referred to as the original "Regulations"), which came into effect on July 1, 2015. On January 4, 2019, the State Council Anti Monopoly Commission also released the "Guidelines on Anti Monopoly in the Field of Intellectual Property" (hereinafter referred to as the "Guidelines"). In this way, the basic institutional rules for anti-monopoly in China's intellectual property field have been established.

However, there are some problems with the existing anti-monopoly system rules in the field of intellectual property in China. Firstly, the original "Regulations" were only departmental regulations issued by the State Administration for Industry and Commerce, which was one of the three anti-monopoly law enforcement agencies in China at that time. The scope of application was limited to the anti-monopoly law enforcement activities of the Administration for Industry and Commerce, and did not include the anti-monopoly law enforcement activities of the National Development and Reform Commission and its authorized agencies at that time, as well as the anti-monopoly review activities of the Ministry of Commerce on concentration of operators. Although the State Administration for Market Regulation, which is responsible for unified anti-monopoly law enforcement, made minor revisions to the original Regulations in 2020, this issue has not been resolved; Secondly, the original "Regulations" and "Guidelines" are generally consistent, but there are still some differences in certain specific rules (such as safe harbor rules and refusal of permission rules), or different understandings due to different expressions, which also require coordination; The third issue is that the original "Regulations" not only limited the content involved, but also failed to make relatively detailed provisions in some aspects already covered, resulting in limited guidance for law enforcement agencies and operators.

In June 2022, the Anti Monopoly Law underwent its first revision, marking significant changes in China's anti-monopoly rules regarding vertical monopoly agreements and concentration of operators. This requires the corresponding improvement of anti-monopoly regulations in the field of intellectual property in China, based on past law enforcement experience and new situations faced.

2、 The new regulations have achieved comprehensive coverage and mutual coordination of anti-monopoly system rules in China's intellectual property field

The new "Regulations" consist of 33 articles, with 14 new articles added, 18 revised, and only 1 retained compared to the original "Regulations". Therefore, it can be said that the content is rich and the changes are significant. This is first reflected in the expansion of the scope of application of the new "Regulations" to include price monopoly behavior in the field of intellectual property and anti-monopoly review of concentration of operators in the field of intellectual property. This achieves comprehensive coverage of the three types of monopoly behaviors (monopoly agreements, abuse of market dominance, and concentration of operators that have or may have exclusion or restriction of competition) stipulated by the Anti Monopoly Law in China's anti-monopoly system rules in the field of intellectual property, and is consistent with the provisions of the new Anti Monopoly Law.

In terms of monopoly agreements, Article 6 of the new "Regulations" clearly states that "operators shall not use the exercise of intellectual property rights to reach monopoly agreements prohibited by Article 17 and Article 18, paragraph 1 of the Anti Monopoly Law." "Operators shall not use the exercise of intellectual property rights to organize other operators to reach monopoly agreements or provide substantial assistance to other operators to reach monopoly agreements." "" If operators can prove that the agreement reached falls under the circumstances stipulated in Article 20 of the Anti Monopoly Law, the provisions of paragraphs 1 and 2 shall not apply

In terms of abusing market position, not only does Article 8 (3) add a provision that "determines whether the operator who owns intellectual property rights has a dominant position in the relevant market, but also considers factors such as the possibility and transfer costs of the counterparty turning to technology or products with substitution relationships in the relevant market, the degree of dependence of downstream markets on the goods provided by the use of intellectual property rights, and the counterparty's ability to balance the operator." In addition, the newly added Article 9 specifically stipulates unfair high price behavior, that "operators with market dominant positions shall not license intellectual property rights or sell products containing intellectual property rights at unfair high prices in the process of exercising intellectual property rights, excluding or restricting competition. Content.

In terms of concentration of operators, the newly added Articles 15 and 16 have made special provisions. If the concentration of operators involving intellectual property rights meets the declaration standards stipulated by the State Council, the operators shall declare to the State Administration for Market Regulation in advance, and shall not implement the concentration without declaration or approval after declaration; The latter explicitly states that the examination of business concentration involving intellectual property rights should take into account the factors stipulated in Article 33 of the Anti Monopoly Law and the characteristics of intellectual property rights, and specifies several specific situations that additional restrictive conditions may include based on the specific circumstances of business concentration transactions involving intellectual property rights.

The changes in the new "Regulations" are also reflected in its emphasis on coordinating with the "Guidelines" in terms of specific rules. For example, Article 7, Paragraph 2, regarding the safe harbor of vertical monopoly agreements added to the new Anti Monopoly Law, on the one hand, it clarifies that if an operator uses the exercise of intellectual property rights to reach an agreement with a counterparty, and can prove that the market share of the participating operator in the agreement is lower than the standard set by the State Administration for Market Regulation in the relevant market and meets other conditions set by the State Administration for Market Regulation, it shall not be prohibited; On the other hand, specific standards can refer to the relevant provisions of the Anti Monopoly Guidelines of the State Council Anti Monopoly Commission in the field of intellectual property. For example, the new Article 10 of the "Regulations" also maintains consistency with the relevant provisions of Article 16 of the "Guidelines" when it comes to the rules of intellectual property refusal to license.

3、 The new regulations have achieved the refinement and further improvement of the anti-monopoly system rules in China's intellectual property field

As one of the supporting regulations of the new anti-monopoly law, the new "Regulations" reflect important changes in the institutional rules of the new anti-monopoly law in many aspects, especially in implementing the legislative purpose of encouraging innovation, digital economy rules, relevant provisions of hub and spoke agreements, and improving legal responsibilities. At the same time, relevant rules have been further refined and improved based on the nature and characteristics of intellectual property rights, and relevant rules have been supplemented and improved in response to prominent issues faced in anti-monopoly law enforcement in recent years.

Although there are not many typical anti-monopoly cases in the field of intellectual property, in recent years, China's anti-monopoly law enforcement agencies have investigated and dealt with some monopolistic behaviors related to intellectual property, and some difficult problems that deserve attention have emerged. For example, how to accurately identify abusive behavior involving essential patents, how to refine the criteria for identifying unfair and high priced behavior in the field of intellectual property, and how to improve and refine anti-monopoly regulatory rules for patent joint venture management organizations. This has also become a key issue that the new regulations focus on and address. To this end, firstly, Article 17 has been revised and improved to include specific provisions on monopoly agreements and abuse of market dominance in patent joint ventures; The second is to use two articles (Article 18 and Article 19) to respectively stipulate the rules for monopoly agreements in the formulation and implementation of standards and the abuse of market dominance in essential patent licenses; Thirdly, Article 21 has added anti-monopoly provisions regarding copyright and related rights.

A very typical and complex issue in the current antitrust field of intellectual property is the antitrust issue involving standard essential patents (SEPs). The typical behaviors involving the abuse of market dominance by SEP can be divided into two categories: one is the behavior of patent owners violating their patent information disclosure obligations or making false promises to obtain improper benefits during the standard setting process; Another type is when patent holders violate the principles of fairness, reasonableness, and non discrimination (FRAND) during the implementation of standards by refusing licenses, unfairly charging high prices, price discrimination, bundling, and improperly seeking injunctive relief. Among them, the issue of injunctive relief is particularly complex and controversial. On the basis of extensive solicitation of opinions, the third item of the first paragraph of Article 19 of the new "Regulations" has added a special regulatory clause to address the issue of abuse of injunctive relief by rights holders who strongly reflect in the field of essential patents, clarifying specific application requirements. Specifically, operators with a dominant market position shall not violate the principles of fairness, reasonableness, and non discrimination in the process of standard essential patent licensing, and shall not request the court or other relevant departments to make judgments, rulings, or decisions prohibiting the use of relevant intellectual property rights without good faith negotiations, forcing the licensee to accept unfair high prices or other unreasonable transaction conditions. This is of great significance for balancing the interests of the rights holders and implementers of essential patents in order to promote innovation and maintain a balance and coordination of competition.

In short, the publication and implementation of the new "Regulations" is conducive to fully implementing the system and spirit of the new anti-monopoly law, promoting fair competition and innovative development, accelerating the construction of a unified national market, and promoting the high-quality development of China's economy.