Standard-Essential Patents and the Japanese Competition Law in Comparison with China, the U.S., and the EU

• Author: Toshiaki Takigawa
• Published date: 01 September 2017
• Date: 01 September 2017
• DOI: http://doi.org/10.1177/0003603X17718683

Article

Standard-Essential Patents and

the Japanese Competition Law

in Comparison with China, the

U.S., and the EU

Toshiaki Takigawa*

Abstract

Despite having committed to FRAND (fair, reasonable and nondiscriminatory) terms, not a few

standard essential patent (SEP) owners have engaged in holdup (such as suing for injunction, or levying

very high royalty), which has triggered antitrust/competition actions in the U.S., the EU, China, Japan,

and Korea. This article focuses on the Japanese situation, highlighting its difference with the Chinese

one. The Japanese competition agency (JFTC) as well as the Japanese Intellectual Property (IP) High

Court have closely studied the jurisprudence in the U.S. and the EU, coming up with solutions in line

with those adopted by the U.S. and EU courts and agencies. By contrast, Chinese agencies and courts

have devised unique methods for tackling SEP/FRAND issues. First, a Chinese antimonopoly agency

has utilized the exploitative-abuse provision of the Chinese competition law for ordering a SEP owner

to reduce its royalties to Chinese licensees, regardless of the SEP owners’ FRAND commitment.

Second, a Chinese court utilized “nondiscriminatory” portion of FRAND commitment, for mandating

virtually the same royalty to be levied on Chinese licensees as that levied on Apple. These methods

either leave too much latitude to the agencies or lack a convincing rationale.

Keywords

standard essential patents, FRAND, holdup, exploitative abuse, injunction suits, JFTC, NDRC, SAIC, IP

Guidelines, Qualcomm, nonassertion of patents, NAP, Apple v. Samsung,Huawei v. ZTE

Standard essential patents (SEPs) represent those patents which have become essential to users of

technical standards, thanks to the patents’ incorporation into standards by standard-setting-

organizations (SSOs). In exchange, SSOs have obliged the patentees to commit to FRAND (fair,

reasonable and nondiscriminatory) terms regarding royalty as well as other terms for licensing the

SEPs.

Nevertheless, despite having committed to FRAND, not a few SEP owners have engaged in holdup

(such as suing for injunction, or levying very high royalty), which has triggered antitrust/competition

*

Faculty of Law, Kansai University, Osaka, Japan

Corresponding Author:

Toshiaki Takigawa, Faculty of Law, Kansai University, 3-3-35 Yamate-cho, Suita, Osaka, 564-8680, Japan.

Email: takigawa@kansai-u.ac.jp

The Antitrust Bulletin

2017, Vol. 62(3) 483-493

ªThe Author(s) 2017

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DOI: 10.1177/0003603X17718683

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