Intellectual Property Rights and Antitrust in China

AuthorDonna Suchy
Pages299-318
299
CHAPTER 5
Intellectual Property Rights
and Antitrust in China
Yee Wah Chin
China’s Anti-Monopoly Law (AML)1 came into effect on August 1, 2008,
following its enactment the year before and 13 years of drafting. China
enacted the third amendments to its Patent Law2 on December 26, 2008,
effective October 1, 2009. This chapter summarizes the AML. It also dis-
cusses those aspects that may have particular impact on intellectual property
rights (IPR) and the provision of the Patent Law that implicates competi-
tion law issues. It also discusses the implementing regulations and judicial
interpretations relating to those laws that involve the IPR–competition law
interface.3
A. An Overview of AML
The AML is China’s first comprehensive antitrust law, and in many respects
it is within the mainstream of modern competition laws. It includes the three
pillars of most modern antitrust laws. First, it includes a chapter devoted
to monopoly agreements that addresses “cartels and other multi-party
Yee Wah Chin is Of Counsel at Ingram Yuzek Gainen Carroll & Bertolotti, LLP, New York.
1. A translation of the Anti-Monopoly Law may be found at http://www.lawinfochina
.com/display.aspx?lib=law&id=0&CGid=96789. The original Chinese text may be found at
http://www.gov.cn/flfg/2007-08/30/content_732591.htm.
2. A translation of the Third Amendment to the Patent Law may be found at http://
english.sipo.gov.cn/laws/lawsregulations/201101/t20110119_566244.html. The original Chinese
text may be found at http://www.gov.cn/flfg/2008-12/28/content_1189755.htm.
3. Article 329 of the Contract Law and the Foreign Trade Law also address IPR contract
provisions that may be anti-competitive and therefore unenforceable.
suc51204_05_c05_299-318.indd 299 6/1/15 8:48 AM
300 IP Protection in China
anti-competitive conduct.4 Second, it includes a chapter focused on “abuse
of dominant market position” dealing with unilateral conduct, potentially
including that by IPR holders.5 Third, it includes a chapter on “concentra-
tions,6 which covers mergers and acquisitions and joint ventures.
The AML also includes distinctive provisions, such as a chapter on
abuse of administrative power directed toward rampant local protection-
ism.7 It also includes articles on businesses in sectors that are economically
vital or implicate national security and are dominated by state-owned enter-
prises,8 businesses that have exclusive distribution rights pursuant to law,9
and trade associations.10
The law establishes a multilevel and multi-faceted enforcement struc-
ture, all under the State Council, the chief executive body. A new entity,
the Anti-Monopoly Commission (AMC), was created to research and draft
competition policy, organize and publish studies on the state of competi-
tion, develop guidelines under the AML, coordinate the enforcement of the
AML, and fulfill assignments from the State Council.11
The AML also specifies that the State Council will designate anti-mo-
nopoly enforcement authorities (AMEAs) that will be responsible for
enforcement. The State Council designated three existing agencies to share
enforcement responsibilities: (1) the Ministry of Commerce (MOFCOM),
(2) the State Administration for Industry & Commerce (SAIC), and (3) the
National Development & Reform Commission (NDRC). MOFCOM is the
secretariat for the AMC and is the AMEA responsible for merger control
and for enforcing the AML against anti-competitive conduct in interna-
tional trade. The SAIC is assigned to enforce the AML regarding all other
violations, except for pricing conduct. It also has enforcement jurisdiction
of the Anti-Unfair Competition Law. The NDRC prosecutes pricing-related
4. AML Ch. II (Monopoly Agreement).
5. Id. Ch. III (Abuse of Market Dominance).
6. Id. Ch. IV (Concentration of Business Operators).
7. Id. Ch. V (Abuse of Administrative Power to Eliminate or Restrict Competition).
8. Id. Art. 7.
9. Id.
10. Id. Arts. 11, 16.
11. Id. Art. 9. The General Of fice of the State Council issued a Notice regarding the
Functions and Membership of the Anti-Monopoly Commission on July 28, 2008. 󳌷
󳌷󰊂󲙖󱴡󲧸󱮙 󱍙󲳯󱒺
2008104,
available at http://govinfo.nlc.gov.cn/jlsfz/zfgb/200818/201010/t20101009_443078.htm
?classid=44.
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