Antitrust issues in patent law amendments

The Patent Law (Draft Amendments) was released for comment on 4 January 2019. In the Reasons of Amendments Necessity, it is stated that new problems surrounding the abuse of patent right are being found as the Chinese economy and society evolve.

The Anti-Monopoly Law has specific provisions on the behaviour of eliminating or restricting competition through abuse of Intellectual Property Rights (IPR), with article 55 stating that, “Where the operators are found to eliminate or restrict competition through the abuse of the [IPR], this law applies”. In Chinese administrative and judicial practice, such abuse cases are not rare, and include the 2015 Qualcomm case ruled by the National Development and Reform Commission (NDRC) and the Huawei v IDC case in 2013. The anti-monopoly promulgation pertaining to the abuse of patent right in this draft therefore surely warrants attention.

Prevention of the abuse of patent rights. In the draft, article 20 is added, laying down a principle preventing the abuse of patent rights: “The applicant shall make application and the patentee shall exercise the patent right with good faith, and shall not abuse the patent right in prejudice of public interests or other people’s legitimate rights and interests, or to eliminate or constrain competition.” A similar provision, namely article 14, was added in the 2015 Patent Law Amendments (Draft for Review). The difference is that this draft consolidates two sentences into one.