China’s SAIC Issues Competition Rules Regulating Abuse of Intellectual Property Rights

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On April 7, 2015, China’s State Administration of Industry and Commerce of the PRC (the “SAIC”) issued the long-anticipated Provisions on the Prohibition of the Abuse of Intellectual Property Rights to Eliminate or Restrain Competition (??????????????????????; the “IP Guideline”), which will come into effect on August 1, 2015. The IP Guideline marks the end of a six-year long legislative process for the SAIC that began in 2009 and for the first time, specifically addresses issues with respect to intellectual property rights (the “IPR”) in China’s competition law area.

Among other things, the IP Guideline restricts horizontal and vertical monopolistic agreements relating to IPR, requires IPR owners with market dominance to license their patents under the “essential facility” doctrine, regulates conduct during standard setting processes, and prohibits patent pool members from undertaking certain activities.

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