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WORLD COMPETITIONLaw and Economics Review

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Editor José Rivas

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Publisher Simon BellamyUS Review Editors Spencer Weber Waller & Maurice E. StuckeEconomics Review

Editor Doris Hildebrand

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Robert Anderson, World Trade OrganizationSir Christopher Bellamy, President, Appeals Tribunal, United Kingdom Competition CommissionManuel Conthe, Former Chairman of Spain’s Securities CommissionSir David Edward, Professor, University of Edinburgh; former Judge, Court of Justice of the European Union.Claus-Dieter Ehlermann, Senior Counsel at Wilmer Cutler Pickering Hale & Dorr LLPJonathan Faull, Director General, Internal Market and Services,European Commission, Professor of Law, Vrije Universiteit BrusselsEleanor M. Fox, Walter J. Derenberg Professor of Trade Regulation, New York University School of LawAllan Fels, Professor at the Australia and New Zealand School of GovernmentNicholas Forwood, Judge, General Court of the European UnionRafael García-Valdecasas y Fernández, Former Judge, General Court of the European UnionFrancisco Enrique González Díaz, Cleary Gottlieb, Steen and Hamilton, BrusselsBarry E. Hawk, Director, Fordham Corporate Law Institute and Partner, Skadden, Arps, Slate, Meagher & Flom LLPHerbert Hovenkamp, Ben V. & Dorothy Willie Professor of Law and History, University of Iowa, USARafael Illescas Ortiz, Professor of Commercial Law, University Carlos III, MadridFrédéric Jenny, Professor of Economics at ESSEC, Chair of the OECD Competition CommitteeValentine Korah, Emeritus Professor, University College London, Honorary Professor of the College of EuropeKoen Lenaerts, Judge, Court of Justice of the European UnionIgnacio de León, Professor, Department of Economics, New York UniversityPatrick McNutt, Visiting Fellow, Manchester Business School, UK and former Chairman, Competition Authority, Dublin and former Chairman, Jersey Competition & Regulatory Authority, UK.John L. Murray, Chief Justice of Ireland; former Judge, Court of Justice of the European Union and Visiting Professor, l’Université Catholique de LouvainDavid O’Keeffe, Professor, University College London and Visiting Professor, College of Europe, BrugesGiuseppe Tesauro, Judge, Corte Constituzionale della Repubblica italianaSpencer Weber Waller, Professor and Director, Institute for Consumer Antitrust Studies, Loyola University Chicago School of LawWouter P.J. Wils, Hearing Officer, European Commission, and Visiting Professor, King’s College London

Ralf Boscheck, Marie Demetriou, Pablo Figueroa, Romain Galante, Juan Gutiérrez,Donogh Hardiman, Benoît Keane, Pablo Muñiz, Ali Nikpay, Morten Nissen, Kletia Noti, Laura Olza-Moreno, Dimosthenis Papakrivopoulos, Rudolph Peritz, Tom Pick, Azza Raslan, J. Matthew Strader, Nicoleta Tuominen, Marta Andrés Vaquero, Michael Weiner, Peter Whelan

Mode of citation: 38 W.Comp. 4 8454-1101 NSSI

Author Guide

[A] Aim of the Journal

World Competition aims to examine all aspects of competition policy from, primarily, a legal perspective, but also from an economicpoint of view. By taking both disciplines into account, it enables readers to understand competition issues. Its currency andmulti-disciplinary approach make it essential reading for practitioners and academics in the field. [B] Contact Details

Manuscripts should be submitted to the Editor-in-Chief, José Rivas. E-mail address: [email protected] or [email protected]

[C] Submission Guidelines

[1] Manuscripts should be submitted electronically, in Word format, via e-mail. [2] Submitted manuscripts are understood to be final versions. They must not have been published or submitted for publication elsewhere.[3] Articles should be between 4,000 and 8,000 words, and never exceed 12,000 words.[4] Only articles in English will be considered for publication. Manuscripts should be written in standard English, while using ‘ize’ and ‘ization’ instead of ‘ise’ and ‘isation’. The preferred reference source is the Oxford English Dictionary. However, in case of quotations, the original spelling should be maintained.[5] The article should contain an abstract, a short summary of about 200 words. This abstract will also be added to the free search zone of the Kluwer Online database.[6] A brief biographical note, including both the current affiliation as well as the e-mail address of the author(s), should be provided in the first footnote of the manuscript.[7] An article title should be concise, with a maximum of 70 characters.[8] Special attention should be paid to quotations, footnotes, and references. All citations and quotations must be verified before submission of the manuscript. The accuracy of the contribution is the responsibility of the author. The journal has adopted the Association of Legal Writing Directors (ALWD) legal citation style to ensure uniformity. Citations should not appear in the text but in the footnotes. Footnotes should be numbered consecutively, using the footnote function in Word so that if any footnotes are added or deleted the others are automatically renumbered. [9] Authors are encouraged to make reference to articles on the same or related topics which have been previously published in World Competition.[10] Tables should be self-explanatory and their content should not be repeated in the text. Do not tabulate unnecessarily. Tables should be numbered and should include concise titles. [11] Heading levels should be clearly indicated.

For further information on style, see the House Style Guide on the website: authors.wolterskluwerblogs.com/#guide

[D] Review Process

[1] World Competition is a refereed journal. Every manuscript is submitted for peer review for the purpose of maintaining the standards of the journal. Before submission to the publisher, manuscripts will be reviewed by the Board of Editors and may be returned to the author for revision. [2] The journal’s policy is to provide an initial assessment of the submission within thirty days of receiving the posted submission. In cases where the article is externally referred for review, this period may be extended.[3] The editors reserve the right to make alterations as to style, punctuation, grammar etc.[4] The author will receive proofs of the article. Proofreading will be taken care of by the Author and minor changes can be made.

[E] Copyright

[1] Publication in the journal is subject to authors signing a ‘Consent to Publish and Transfer of Copyright’ form. [2] The following rights remain reserved to the author: the right to make copies and distribute copies (including via e-mail) of the contribution for own personal use, including for own classroom teaching use and to research colleagues, for personal use by such colleagues and the right to present the contribution at meetings or conferences and to distribute copies of the contribution to the delegates attending the meeting; the right to post the full contribution on the author’s personal or institutional web site or server, at any time, provided the site has protected/restricted access and acknowledgement is given to the original source of publication; the right to post the full contribution on any web site provided 3 months have passed since the contribution was originally published; for the author’s employer, if the contribution is a ‘work for hire’, made within the scope of the author’s employment, the right to use all or part of the contribution for other intra-company use (e.g. training), including by posting the contribution on secure, internal corporate intranets; and the right to use the contribution for his/her further career by including the contribution in other publications such as a dissertation and/or a collection of articles provided acknowledgement is given to the original source of publication.[3] The author shall receive for the rights granted a free copy of the issue of the journal in which the article is published, plus a PDF file of his/her article.

The following rights remain reserved to the author: the right to make copies and distribute copies (including via e-mail) of the contribution for own personal use, including for own classroom teaching use and to research colleagues, for personal use by suchcolleagues and the right to present the contribution at meetings or conferences and to distribute copies of the contribution to the delegates attending the meeting; the right to post the full contribution on the author’s personal or institutional web site or server, at any time, provided the site has protected/restricted access and acknowledgement is given to the original source of publication; the right to post the full contribution on any web site provided 3 months have passed since the contribution was originally published; for the author’s employer, if the contribution is a ‘work for hire’, made within the scope of the author’s employment, the right to use all or part of the contribution for other intra-company use (e.g. training), including by posting the contribution on secure, internal corporate intranets; and the right to use the contribution for his/her further career by including the contribution in other publications such as a dissertation and/or a collection of articles provided acknowledgement is given to the original source of publication.

New Chinese Rules on Abusing IPRs:WhatDoes It Mean for the Exercise of IPRs after

the Qualcomm Case?

Zhaofeng ZHOU*

On 13 April 2015, the State Administration for Industry and Commerce, one ofthe three Chinese antitrust authorities, which is particularly responsible fornon-price related anti-competitive activities, published Rules on Abuses ofIntellectual Property Rights Eliminating or Restricting Competition (‘AbusingIPR Rules’).1 The Abusing IPR Rules were approved by Mr Mao Zhang, thehead of the State Administration for Industry and Commerce2 on 7 April and willcome into effect on 1 August 2015, which will be exactly eight years after theAntimonopoly Law (‘AML’) came into effect.

The Abusing IPRs Rules are comprised of 19 articles, and may be roughlydivided into six parts: (a) providing goals and principles; (b) prohibitingundertakings from reaching anti-competitive agreements when exercising theirIPRs and providing safe harbours; (c) prohibiting a dominant company fromabuses of dominance when exercising its IPRs; (d) listing the circumstances underwhich exercising IPRs in regard to patent pool and standard-essential patents(‘SEPs’) might be considered as anti-competitive (either anti-competitiveagreements or abuses of dominance); (e) laying down analytical approach for therelevant enforcement authorities; and (f) providing the punishment for violatingthe Abusing IPR Rules.

* Partner based in the Beijing office of Bird & Bird.The author has a PhD degree in competition lawfrom the University of Glasgow.The author would like to thank Anne Federle, who is a competitionpartner of Bird & Bird Brussels office, for her comments and input on an earlier draft of this article.The author also would like to thank Jose Rivas, who is the co-head of Bird & Bird competitiongroup, and Carmen Feito Perez, who is an associate of Bird & Bird competition group, for theircomments and input on this article.

1 For the official Chinese version of the Abusing IPR Rules, please visit http://www.State Ad-ministration for Industry and Commerce.gov.cn/zcfg/xzgzjgfxwj/xxb/201504/t20150413_155104.html.

2 The State Administration for Industry and Commerce is the competent authority of ministerial leveldirectly under the State Council in charge of market supervision/regulation and related lawenforcement through administrative means, for more information please visit their websitehttp://www.saic.gov.cn/english/Home/.

Zhou, Zhaofeng. ‘New Chinese Rules on Abusing IPRs: What Does It Mean for the Exercise of IPRsafter the Qualcomm Case?’. World Competition 38, no. 4 (2015): 597–616.© 2015 Kluwer Law International BV, The Netherlands

This is the first regulation dealing with the application of the AML to theintellectual property rights (‘IPRs’) domain. The adoption of the Abusing IPRRules is a milestone in the development of China’s antitrust history due to thecomplexity of the IPR/antitrust interface and the profound impact that theAbusing IPR Rules will have on the IPR sector. Nevertheless, there are currentlyno articles which comprehensively explain and examine the Abusing IPR Rules.This article first explores the background of the adoption of the Abusing IPRRules. Then, it examines the key provisions by comparing the relevantrules/guidance in the EU and US. Finally, it concludes that companies bothinternational and domestic must make sure their competition compliance programupdated and their business practice complied with Abusing IPR Rules.

1 BACKGROUND

1.1 THE ADOPTION OF THE ABUSING IPR RULES

Before the adoption of the AML in August 2007, there was in China somelegislation which touched IPR-related antitrust issues.3 For example, Article 329of the Contract Law4 provides that a technology contract which illegallymonopolizes a technology, impairs technological advancement or infringes on thetechnology of a third party is invalid. Article 10 of the Interpretation of theSupreme People’s Court on Certain Issues of Application of Law in CasesInvolving Technology Contract Disputes (hereinafter the Interpretation ofTechnology Contract 2004)5 further elaborates Article 329 of Contract Law bylisting six examples of breaches. However, such rules were scattered into differentlaws and regulations and lack consistency.

Following the adoption of the AML, the anti-competitive abuse of IPRs isregulated under the first comprehensive antitrust law in China. Article 55 of theAML provides that this law applies to undertakings’ abuses of IPRs to eliminate orrestrict competition. Since then, the State Administration for Industry andCommerce started to draft guidance on enforcing Article 55 of the AML.Originally, State Administration for Industry and Commerce planned to draftguidance on behalf of the Antimonopoly Commission of the State Council

3 For the status of China’s IPR-related legislations before the adoption of the AML, see ZhaofengZhou, The Impact of the World Trade Organisation on the Formulation of the Antimonopoly Law of thePeople’s Republic of China 197-200 (University of Glasgow 2008), available at http://theses.gla.ac.uk/116/1/2008zhaofengzhouphd.pdf.

4 The Contract Law of the People’s Republic of China was adopted in 1999, an English edition isavailable at http://www.chinaiprlaw.com/english/laws/laws2.htm.

5 The Interpretation of Technology Contract 2004 was issued by Supreme People’s Court on 30November 2004 and came into force on 1 January 2005, available at http://www.lawtime.cn/info/sunhai/shpcfg/2007070642633.html.

WORLD COMPETITION598

(‘Antimonopoly Commission’), whose responsibilities include formulating andissuing competition/antitrust guidance.6 But the Antimonopoly Commissioncannot issue any binding rules. According to the original plan, the guidance foranti-competitive abuse of IPRs will be issued by Antimonopoly Commission. Atnational level, there are three antimonopoly enforcement authorities in China:(1) the State Administration for Industry and Commerce is responsible fornon-price related anti-competitive behaviours (including non- price relatedanti-competitive agreements, non-price related abuses of dominance andnon-price related abuses of administrative power; (2) the National Developmentand Reform Commission is responsible for price related anti-competitivebehaviours (including price related anti-competitive agreements, price relatedabuses of dominance and price related abuses of administrative power; and (3) theMinistry of Commerce is responsible for merger control. 7

Figure 1 Chinese Antitrust Authorities at National Level

Although the power division between the National Development andReform Commission and the State Administration for Industry and Commerceseem clear, in practice, price-related and non-price related anti-competitive

6 Under Art. 9 of the AML, AMC is responsible for organizing, coordinating, and guiding antitrustworks, and perform the following duties: (1) study and draft competition policies; (2) study andassess the general competition situations in the market and issuing an assessment report;(3) formulate and issue antitrust guidelines; (4) coordinate antitrust enforcement; and (5) any otherduties stipulated by the State Council.

7 For more explanation on the structure of the enforcement authorities of China’s antimonopoly law,please see Nathan Bush & Zhaofeng Zhou, “Chinese Antitrust—Act II, Scene I”, The AntitrustSource 1, 8(1) (2008), available at http://www.americanbar.org/content/dam/aba/publishing/antitrust_source/Oct08_Bush10_24f.pdf.

Anti-Monopoly Commission

National Development andReform Commission

State Administration forIndustry and Commerce

Ministry of CommerceMerger review

Policy making

Coordination in enforcement

Handling price related abuses

Handling price related anti-

competitive agreements

Handling price relevant cases

regarding anti-competitive

activities led by local governments

Handling non-price related abuses

Handling no-price related anti-

competitive agreements

Handling non-price relevant cases

regarding anti-competitive

activities led by local

governments

NEW CHINESE RULES ON ABUSING IPRs 599

behaviours normally co-exist in one case. In practice, therefore, these twoauthorities have dealt with anti-competitive behaviours beyond their ownenforcement power as long as some of the anti-competitive behaviours theyinvestigated fall into the scope of their enforcement power. In the Qualcomm case,for example, except the excessive pricing issue, the National Development andReform Commission also deals with non-price related issues, such imposingunreasonable transaction conditions and tying in.8

During the process of drafting the guidance, the State Administration forIndustry and Commerce took the leading role. Neither the National Developmentand Reform Commission nor the Ministry of Commerce actively participated inthe process. Because of this, the State Administration for Industry and Commercehad to change the original plan and has started to draft rules/measures under itsown power rather than guidance on behalf of the Antimonopoly Commission.9

Consequently, the scope of application of the State Administration for Industryand Commerce’s rules on anti-competitive abuse of IPRs will be narrowed due tothe limitation of the State Administration for Industry and Commerce’sresponsibility under the AML. Another key consequence is that the forthcomingdetailed rules will be binding instead of non-binding guidelines because theoriginal guidelines were drafted by the State Administration for Industry andCommerce on behalf of the Antimonopoly Commission. In addition, much of thecontextual provisions and analytical framework of the draft guidelines weredeleted.

During the drafting process, the State Administration for Industry andCommerce has conducted on-site studies in 10 different cities in China and helddiscussions and seminars with antitrust enforcement agencies in the US, EU, andother countries. On 10 June 2014, the State Administration for Industry andCommerce issued its last draft rules on anti-competitive abuse of IPRs (The June2014 Draft) for soliciting opinions.10 It held discussions and seminars with variousagencies, companies, and experts, during which concerns and comments wereraised. Ten months later, the State Administration for Industry and Commerceformally adopted the Abusing IPR Rules.

As the State Administration for Industry and Commerce is only responsiblefor non-price related anti-competitive behaviours, the Abusing IPR Rules only

8 For more discussions of the Qualcomm case, please see the section 1.2 The Qualcomm case of thisarticle.

9 Under the AML, Antimonopoly Commission can only issue non-binding guidance, makingcompetition policy and coordinate enforcement. It does not, however, have the power of issuingbinding antitrust enforcement rules.

10 See the State Administration for Industry and Commerce’s notice on soliciting opinions in regard toanti-competitive IPRs, available at http://www.chinalaw.gov.cn/article/cazjgg/201406/20140600396223.shtml.


apply to non-price related abuses of IPRs which eliminate or restrict competition.The National Development and Reform Commission has not issued any specificrules or guidance on price related anti-competitive abuses of IPRs,11 although itscurrent general rules on price related anti-competitive agreements and pricerelated abuses of dominance are applicable to price related abuses of IPRs if theyeliminate or restrict competition. The National Development and ReformCommission’s recent decision against Qualcomm’s abuses of dominance is anexample. In this case, the National Development and Reform Commission’sgeneral rules are applicable to price related abuses of IPRs.

Although the National Development and Reform Commission did notparticipate in the process of formulating the new IPR rules, both the NationalDevelopment and Reform Commission and the State Administration for Industryand Commerce became increasingly active in enforcing the AML with regard tothe interface between IPRs and antitrust, as shown by the National Developmentand Reform Commission’s Qualcomm case and the on-going Microsoft case beforethe State Administration for Industry and Commerce.12 The Qualcomm case is amilestone in the enforcement history of China’s antimonopoly law since the fine isthe highest in China’s antitrust enforcement history.

1.2 THE QUALCOMM CASE

Before analysing the Abusing IPR Rules, it is worth mentioning the Qualcommcase since it involves the anti-competitive exercise of IPRs. In February 2015, theNational Development and Reform Commission imposed a fine of RMB 6,088billion (nearly USD 1 billion) on Qualcomm for abusing its dominant positionwith regard to its standard-essential patents (‘SEPs’). In its decision, the NationalDevelopment and Reform Commission found that Qualcomm holds a dominantposition in several markets, namely the license of SEPs for the CDMA,WCDMAand LTE wireless communication standards, as well as the supply of basebandchipsets. Qualcomm was found to have abused its dominant position in three ways:

11 In June 2015, some officials of the National Development and Reform Commission announced atseveral occasions that their department will start to draft a guidance on anti-competitive IPRs whicheven include non-price related anti-competitive IPRs. So far, we have not seen any draft availablefor comments. See “Zhongguo Zhengshi Qichao Lanyong Zhishi Chanquan Fanlongduan GuizhiZhinan” (China is going to formally draft guidance on anti-competitive IPR), Jingji Cankao, 4 Jun.2015, available at http://tech.sina.com.cn/it/2015-06-04/doc-icrvvrak2684841.shtml (in Chinese). Itremains to see how the proposed abusing IPR guidance will be drafted and whether the StateAdministration for Industry and Commerce will participate the drafting process.

12 For more details of the on-going Microsoft case, please see Reuters, China anti-trust regulator conductsnew raids on Microsoft, Accenture, 6 Aug. 2014, available at:http://www.reuters.com/article/2014/08/06/us-microsoft-china-idUSKBN0G60GR20140806.


(1) Excessive pricing: charging unreasonable royalties on Chinese mobiledevice manufacturers. This finding is further split into three claims:(a) charging licensees for patents that had already expired by refusing toprovide a list of all Qualcomm’s patents included in its comprehensivelicensing package; (b) imposing unfair cross-licensing conditions byforcing licensees to grant Qualcomm free licenses for their own patentswhilst refusing to lower the royalties it imposed in consideration of thevalue of the patents licensed to it; and (c) the royalty rate was set at a highlevel and applied to the net wholesale price of the mobile devicesconcerned.

(2) Bundling: forcing licensees to accept the licensing of Qualcomm’snon-SEPs in order to obtain a license for its SEPs.

(3) Unfair conditions of sale: imposing unreasonable conditions on the saleof baseband chipsets because Chinese licensees were forced to accept anon-challenge clause prohibiting them from challenging the validity ofQualcomm’s patents.

Based on the above abuses, the National Development and ReformCommission fined Qualcomm nearly USD 1 billion. In addition, Qualcommundertook to make changes to the licensing of its wireless SEPs, which include:(1) charging royalties for its patents in China (3.5 or 5 per cent, depending on thetechnology) on 65 per cent of the net selling price of each device rather than thefull price as previously; (2) providing lists of all its patents when licensing and notcharging licence fees for expired licences; (3) not requesting cross-licences fromChinese licensees without payment; (4) not bundling licences of wirelesscommunication SEPs with non-SEPs without any justification; and (5) promising,in relation to its baseband chips, not to force Chinese licensees to agree to anylicence that imposes unreasonable conditions, and not to prohibit prospectivelicensees from challenging the terms of their agreements.

Currently, there are some disagreements between Qualcomm and theNational Development and Reform Commission in regard to the legal effect ofQualcomm’s commitments. Qualcomm claimed that now they were allowed tocharge Chinese licensees according to the rates they committed under theirsettlement commitments gave to the National Development and ReformCommission (which are mentioned above). The National Development andReform Commission, however, claimed that they did not approve Qualcomm’scommitments (they were only proposed by Qualcomm) and their decision doesnot involve deciding the royalty rates that Qualcomm can charge. So far,Qualcomm has not disclosed a full version of their commitments.


Two months after the Qualcomm case, the State Administration for Industryand Commerce adopted the Abusing IPR Rules.

2 GOALS, PRINCIPLES AND SCOPE

2.1 GOALS

Article 1 of the Abusing IPR Rules provides that the purpose of these rules is toprotect market competition and encourage innovation. Specifically, the rulesprohibit the abuse of IPRs by undertakings that eliminate or restrict competition.Article 2 of the Abusing IPR provides that anti-monopoly rules and the protectionof IPRs share common aims: to promote innovation and competition, enhanceefficiency, and protect the interests of consumers and the public interest.

In general, these objectives are consistent with the current internationalpractice with regard to the interface between antitrust and IPRs. For example, theUS Antitrust Guidelines for the Licensing of Intellectual Property state: ‘Theintellectual property laws and the antitrust laws share the common purpose of promotinginnovation and enhancing consumer welfare ‘.13

2.2 THE RELEVANT PRODUCT MARKET

Under Article 3 of the Abusing IPR Rules, the relevant product market can beeither technology markets or goods markets which incorporate the technologyconcerned. The technology market consists of the IPR that is licensed (the‘licensed technology’) and its close substitutes—that is, the technologies or goodsthat are close enough substitutes to significantly constrain the exercise of marketpower with respect to the IPR that is licensed. Such definitions are consistent withthe relevant EU and US guidance.

Unlike the US Antitrust Guidelines for the Licensing of Intellectual Property,however, the Abusing IPR Rules do not mention the so-called innovation markets(markets for research and development). According to the US Guidelines, aninnovation market consists of the research and development directed to particularnew or improved goods or processes, and the close substitutes for that research anddevelopment. The innovation market was mentioned in some of the previousdrafts but was dropped in the June 2014 Draft.

13 See 1.0 of the US Antitrust Guidelines for the Licensing of Intellectual Property, available athttp://www.justice.gov/atr/public/guidelines/0558.htm.


2.3 SCOPE

The Abusing IPR Rules also repeat Article 55 of the AML and emphasise thatthey only apply to abuses of IPRs which eliminate or restrict competition.Article 55 of the AML applies to all three types of anti-competitive behaviour:anti-competitive agreements, abuse of dominance, and mergers/acquisitions whichmight eliminate or restrict competition. Article 3 of the Abusing IPR Rulesprovides that the phrase ‘abuse of intellectual property rights to eliminate or restrictcompetition’ refers to the implementation of monopolistic agreements or the abuseof market dominance in the exercise of intellectual property rights in breach of theAML. The Abusing IPR Rules apply to all forms of intellectual property rights,such as patent, copyright, and trademarks. This scope is broader than that of theAntitrust Guidelines for the Licensing of Intellectual Property by the USDepartment of Justice (‘DOJ’) and the US Federal Trade Commission (‘FTC’),which does not cover the antitrust infringement of trademarks.

Unlike Commission Regulation (EU) No 316/2014 of 21 March 2014 onthe application of Article 101(3) of the Treaty on the Functioning of the EuropeanUnion to categories of technology transfer agreements (‘EU Regulation316/2014’), which applies only to anti-competitive agreements, the Abusing IPRRules apply to non-price related abuses of dominance under Article 17 of theAML.

Unlike the US Antitrust Guidelines for the Licensing of Intellectual Property,the Abusing IPR Rules only apply to non-price related anticompetitive IPRs.China has not adopted such rules/guidelines for price related abuses and mergers.

3 ANTI-COMPETITIVE AGREEMENTS AND SAFE HARBOURS

3.1 THE DISTINCTION BETWEEN COMPETITORS AND NON-COMPETITORS

The relationship between the undertakings concerned is key to deciding whichprovisions are applicable under the Abusing IPR Rules. Such relationships in theIPR sector are not always straight-forward when compared to more traditionalsectors. For example, licensors and licensees can be competitors at the productmarket level and at the same time be in a vertical relationship in the technologymarket. Article 15 of the Abusing IPR Rules clarifies this by providing that theagreement concerned will not be considered as an agreement betweencompetitors if the companies concerned were not competitors when they signedtheir agreement, but only became competitors after the signing.

This article is similar to the relevant provision in the EU Guidelines on theapplication of Article 101 of the Treaty on the Functioning of the European


Union to technology transfer agreements (2014/C 89/03), which states: ‘In order todetermine the competitive relationship between the parties it is necessary to examine whetherthe parties would have been actual or potential competitors in the absence of the agreement. Ifwithout the agreement the parties would not have been actual or potential competitors in anyrelevant market affected by the agreement they are deemed to be non-competitors.’

The reason that defining the term ‘competitor’ is very important is that beingcompetitors means Article 13 of the AML (dealing with anti-competitiveagreements between competitors) is applicable, while anti-competitive agreementsbetween non-competitors might subject to Article 14 of the AML which dealswith vertical relationship such as the relationship between manufactures anddistributors.

3.2 SAFE HARBOUR FOR ANTICOMPETITIVE AGREEMENTS

IPR agreements, such as IPR licensing agreements, are sometimespro-competitive, and antitrust concerns may not arise. Thus, Article 5 of theAbusing IPR Rules provides a safe harbour for certain types of IPR relatedagreements. Under this article, the exercise of IPRs will not fall under Article13.1.6 and Article 14.3 of the AML if the relevant companies fulfil one of thefollowing conditions (unless their action has been proven to significantly eliminateor restriction competition by means of other evidence):

(a) the combined market share of the parties in the relevant market is nomore than 20%, or no less than four other independent, interchangeabletechnologies exist in the relevant market and can be licensed atreasonable costs; or

(b) neither of the parties has a market share of more than 30%, or no lessthan two other independent, interchangeable technologies exist in therelevant market and can be licensed at reasonable costs.

The market share thresholds of 20% and 30% are in line with Article 3 of EURegulation 316/2014. However, EU Regulation 316/2014 does not provide forthe number of independent, interchangeable technologies as an alternative to themarket share threshold. This method is used in Article 4.3 of the US AntitrustGuidelines for the Licensing of Intellectual Property. Under Article 4.3, the USAntitrust Agencies ‘will not challenge a restraint in an intellectual propertylicensing arrangement that may affect competition in a technology marketif . . . there are four or more independently controlled technologies in addition tothe technologies controlled by the parties to the licensing arrangement that maybe substitutable for the licensed technology at a comparable cost to the user’.


Article 5 of the Abusing IPR Rules combines the approaches adopted inArticle 3 of EU Regulation 316/2014 and Article 4.3 of the US AntitrustGuidelines for the Licensing of Intellectual Property. Thus, it is an excellentexample of how China develops its antitrust rules by combining the best practiceglobally. The wider scope of the exemptions under the Abusing IPR Rules isuseful since it is often difficult to calculate market shares.

This is the first time under the AML and related rules that safe harbourprovisions have been used. The safe harbour rules are not applicable to conductwhich is explicitly mentioned in Articles 13 and 14 of the AML – i.e., on thehorizontal level, cartels fixing prices, limiting outputs, dividing markets, limitingnew technologies, and collective boycott, and on the vertical level, resale pricemaintenance.

The interesting question is how the NDRC will treat price-relatedagreements that fulfil the conditions above. Most (if not all) price-relatedanticompetitive agreements are listed in Article 13.1.1-13.1.5 and Article14.1-14.2 of the AML and thus will not fall under the safe harbour rules underArticle 5 of the Abusing IPR Rules (even if such rules were also adopted by theNDRC). Article 13.1.1-13.1.5 of the AML lists prohibited horizontalanti-competitive agreements including cartels fixing prices, limiting outputs,dividing markets, limiting new technologies and collective boycott. Article14.1-14.2 of the AML prohibits resale price fixing and the setting of minimumresale prices.

3.3 DIFFERENTIATING HARD-CORE RESTRICTIONS AND OTHER ANTICOMPETITIVE

AGREEMENTS?

Article 13.1.1-5 of the AML explicitly prohibits fixing prices, limiting outputs,dividing markets, limiting new technologies and collective boycotts. Article 13.1.6prohibits other types of anti-competitive horizontal agreements. Currently,however, no guidance or rules clarify what ‘other types of anti-competitivehorizontal agreements’ exist. No cases have involved Article 13.1.6 of the AML.

Article 14.1-14.2 of the AML explicitly prohibits resale price maintenance.Article 14.3 of the AML also prohibits other types of anti-competitive verticalagreements. Like Article 13.1.6 of the AML, no guidance or rules clarify the ‘othertypes of anti-competitive vertical agreements’. The AML itself and the relevantimplementation rules have never differentiated between anti-competitiveagreements. Unlike in the EU, the term ‘hard-core restrictions’ has not beenadopted in China.

For the first time in the Chinese competition legislation history, however, theAbusing IPR Rules clearly differentiate anti-competitive agreements by providing


safe habours for certain types of them. This differentiation is of significantimportance since it is always arguable when the effects on competition need to beexamined when analysing an agreement. Some experts argue that de minimis rulesshould be developed in China in order to take into account the effects of differentanti-competitive agreements. Does the adoption of Article 5 of the Abusing IPRRules mean that the Chinese competition enforcement authorities, or at least theState Administration for Industry and Commerce, will follow the differentiationapproach (similar to the EU de minimis approach) for all anti-competitiveagreements in the future? Although it is too early to draw any conclusions, thiswill be an interesting point to follow.

3.4 PATENT POOL: ANTI-COMPETITIVE AGREEMENTS

Under Article 12 of the Abusing IPR Rules, the term ‘patent pool’ refers to thearrangements or agreements under which two or more patentees jointly licensetheir individually held patents to other third parties in certain ways. They mayform a specific joint venture for this purpose or entrust a certain member of thepatent pool or an independent third party to manage the patent pool. Patent poolcould raise competition concerns under Articles 13 and 14 of the AML. Thus,Article 12 of the Abusing IPR Rules provides that no member of a patent poolmay use the patent pool to exchange sensitive information in relation tocompetition such as price, production volume, and market segmentation to enterinto anticompetitive agreements which are prohibited under Article 13 or Article14 of the AML.

This is the first time that the exchange of sensitive information is clearlyprohibited under the Chinese antitrust rules. However, this provision applies onlyto information exchanged in the IPR sector. Nevertheless, such a provision willstrengthen the view held by many practitioners that, like in the EU and the US,the exchange of competitively sensitive information is prohibited under the AML,although the AML itself does not explicitly provide this.

4 ABUSES OF DOMINANCE

4.1 DOMINANT MARKET POSITION AND ABUSES OF DOMINANCE

Article 6 of the Abusing IPR Rules provides that a dominant company shall notabuse their dominant position to eliminate or restrict competition when exercisingits IPRs. It then refers to Article 18 and Article 19 of the AML for decidingwhether a company has a dominant market position. Under Article 18 of the


AML, a company’s dominant market position shall be determined on the basis ofthe following factors:

(a) its market share on a relevant market and the competitiveness on themarket;

(b) its ability to control the sales market or the purchasing marker for rawand semi-finished materials;

(c) its financial strength and technical conditions;(d) the extent to which other companies depend on it in transactions; and(e) the difficulty of entering the relevant market.

Among the above factors, market share is a key benchmark for decidingwhether a company has a dominant position. Article 19 of the AML provides thata company will be presumed to have a dominant position if its market sharereaches the following criteria:

(a) its market share is more than 50%;(b) its combined market share with another company is more than two

thirds; or(c) its combined market share with another two companies is more than

75%.

The exception is that a company with less than 10% market share will not beconsider to have a dominant position even if its combined market share withanother company is more than two thirds (or with another two companies is morethan 75%).

Article 6 of the Abusing IPR Rules clarifies that merely owning an IPRcannot be presumed to translate into a dominant position. It provides that anyundertaking’s IPRs may be one of the relevant factors for determining whether itis dominant, but an undertaking is not presumed to be dominant in the relevantmarket solely based on the fact that it owns IPRs.The Abusing IPR Rules do notprovide further detailed rules on under what circumstances companies will beconsidered to have a dominant position.

Article 17 of the AML lists abuses prohibited under the AML including:excessive pricing, selling products at very low price, refuse to deal, exclusive dealing,tying, and differential treatment. Based on Article 17 of the AML, the Abusing IPRRules prohibit the following abuses of dominance: (a) refuse to deal (Article 7);(b) limit transaction conditions (Article 8); (c) tie in (Article 9); (d) imposeunreasonable conditions (Article 10); and (e) differential treatment (Article 11).Since the Abusing IPR Rules only deal with non-price related anti-competitiveIPRs, the Abusing IPR Rules do not apply to price-related abuses of dominance.Due to the lack of detailed implementation rules, the antitrust enforcement


authorities have to rely on the general rules under the AML to deal withprice-related abuses. In both the Qualcomm case and the IDC case,excessive pricingis one of the key findings by the National Development and Reform Commissionfor violating the AML.

Among these rules on abuses of dominant under the Abusing IPR Rules,Article 7, Article 10, Article 12 and Article 13 need to pay attention to since theyprovide very detailed rules on assessing whether exercising IPRs is considered asan abuse.Thus, the following sections will focus on these two articles.

4.2 ESSENTIAL FACILITY

As a general rule, the AML does not oblige a dominant IP holder to license hisIPR, and the refusal to license does not, in itself, constitute an abuse. For an abuseto exist, there must be additional abusive behaviour, and exceptional circumstancesmust prevail. Essential facility creates such exceptional circumstances.The essentialfacilities doctrine imposes on owners of essential facilities a duty to deal withcompetitors. The roots of this doctrine originate in the Terminal RailroadCombination case of 1912.14

Article 7 of the Abusing IPR Rules provides that without any justification, adominant undertaking is prohibited from refusing to license an IPR if this IP isconsidered as an essential facility. It further lays down the conditions under whichan IPR could be considered as an essential facility.Those conditions include:

(a) the IPR concerned is not reasonably interchangeable with other IPRsand is essential for other competitors to participate in competition in therelevant market;

(b) refusing to license the IPR concerned will have a negative impact oncompetition or innovation in the relevant market or will damageconsumers’ interests or the public interest; and

(c) licensing the IPR concerned will not cause unreasonable damage to thelicensors.

In IMS Health v. NDC Health15 case, the European Court of Justice confirmedthat the mere refusal to license an IPR is not in itself an abuse and that such arefusal will only amount to an abuse in ‘exceptional circumstances’.The judgementconfirmed that in order to constitute the ‘exceptional circumstances’ amounting toabuse, a refusal to license must (in addition to a finding that the IP holder has a

14 United States v.Terminal Railroad Ass’n, 224 U.S. 383 (1912).15 IMS Health v. NDC Health, Case C-418/01.


dominant position and the IPR is indispensable for carrying on a particularbusiness) fulfil the following three conditions:

– the undertaking which requested the licence must intend to offer, on themarket for the supply of the data in question, new products or services notoffered by the copyright owner and for which there is a potentialconsumer demand;

– the refusal is not justified by objective considerations; and– the refusal is such as to reserve to the copyright owner the market for the

supply of data on sales of pharmaceutical products in the Member Stateconcerned by eliminating all competition on that market.

Although the wordings are not identical, we can still see that the conditionsunder Article 7 of the Abusing IPR Rules in general incorporate the conditions laiddown in IMS Health v. NDC Health case. For detailed comparisons (see Table 1).

Table 1 Comparing the Conditions for Essential Facility

Conditions Provided under Article 7 of theAbusing IPR Rules

Conditions Laid Down in IMS Health v. NDCHealth Case

Having a dominant market position Having a dominant market position

Without any justification The refusal is not justified by objectiveconsiderations

The IPR concerned is not reasonablyinterchangeable with other IPRs and isessential for other competitors to participatein competition in the relevant market

The involved IPR is indispensable

The refusal will have a negative impact oncompetition or innovation in the relevantmarket

Eliminating all competition

The refusal will damage consumers’ interests The undertaking which requested thelicence must intend to offer, on the marketfor the supply of the data in question, newproducts or services not offered by thecopyright owner and for which there is apotential consumer demand

Licensing the IPR concerned will not causeunreasonable damage to the licensors

Not required


This is the first time that Chinese antitrust rules clearly regulate essentialfacility issues. During the process of formulating the Abusing IPR Rules, theessential facility clause raised significant concerns by IPR holders, in particularseveral international companies in the telecommunications sector. The provisionsthat were ultimately adopted show that the State Administration for Industry andCommerce has tried very hard to resolve these concerns by defining theconditions under which an IPR could be considered as an essential facility. Inparticular, one of the conditions is that the interests of the licensor shall not beunreasonably damaged. So far, there are no cases in China involved in essentialfacility doctrine, not mention in the IPR sector. It remains to be seen how theseconditions will be applied and to what extent such conditions will remove theconcerns of licensors due to the vague terms used in this provision, such as‘unreasonably damaged’.

4.3 IMPOSING UNREASONABLE CONDITIONS

Article 17 of the AML only generally prohibits a dominant company fromimposing unreasonable transaction conditions. It does not list what type ofactivities could be considered as unreasonable conditions. Because of this, it wasnot clear what business activities could be considered as unreasonable conditionsin particularly respect of the IPRs.The Abusing IPR Rules clarify this and list theactivities which could be considered as ‘unreasonable restrictive conditions’ inregard to IPRs, which include:

(a) requiring the other party to exclusively license back technologyimproved by them;

(b) prohibiting the other party from challenging the validity of the IPRs;(c) restricting the other party’s production, use and sale of competing

products or research, development and use of competing technologyupon the expiry of the relevant license, where this does not involve anyinfringement of IPRs;

(d) requiring the other party to continue to pay royalties after the expiry ofthe protection period or for IPRs which have been held invalid;

(e) prohibiting the other party from dealing with any third party; or(f) imposing other unreasonable restrictive conditions on the other party.16

Currently, there are several investigations and decisions against companies thatare being viewed as abusing their dominant position via imposing unreasonableconditions when exercising their IPRs. In the recent Qualcomm case, for instance,

16 See Art. 10 of the Abusing IPR Rules.


the National Development and Reform Commission found that one of theconditions that Qualcomm grants a licence for baseband chipsets is that thelicensee shall not challenge the validity of Qualcomm’s relevant patents.The National Development and Reform Commission concluded that suchnon-challenge clause constituted ‘the unreasonable transaction conditions’ and wasprohibited by Article 17 of the AML.17

Article 10 of the Abusing IPR Rules provides useful guidance on whatactivities could be considered as an abuse of dominance by imposing unreasonableconditions and thus in violation of the AML. Since some of these cases are beinginvestigated by the National Development and Reform Commission, however, it isunlikely that the National Development and Reform Commission will clearlyrefer to Article 10 of the Abusing IPR Rules when dealing with IPR relatedabuses by imposing unreasonable conditions. Nevertheless, it is inevitable that theofficials of the National Development and Reform Commission will have this rulein mind when they decide whether such actions constitute abuses.

4.4 PATENT POOL: ABUSE OF DOMINANCE

Except its competition concerns raised under Articles 13 and 14 of the AML,patent pool could also have abusive effects under circumstances. If themanagement organisation of a patent pool has a dominant market position, forexample, it could eliminate or restrict competition through restricting membersnot to grant license to a third party. Thus, Article 12 of the Abusing IPR Rulesprohibits abuses of dominance with regard to patent pools by providing that nodominant undertaking or patent pool management agency may, without justifiablereasons, use patent pools to engage in the following behaviour which wouldconstitute an abuse of dominance:

(a) restricting patent pool members’ ability to license a patent as independentlicensor outside the patent pool;

(b) restricting patent pool members’ or licensees’ ability to independently orjointly with any third party engage in research and development of othertechnology which competes with the patents of such patent pool;

(c) forcing licensees to exclusively license back the technology which thelicensees have improved or researched and developed to patent poolmanagement agencies or members of such patent pools;

17 As discussed early in this article, the National Development and Reform Commission haveinvestigated antitrust cases which involved both price-related and non-price related anti-competitivebehaviours, although their enforcement power does not include non-price related anti-competitivebehaviours.


(d) prohibiting licensees from challenging the validity of the patents of suchpatent pools;

(e) applying discriminatory transaction terms to equivalent members ofpatent pools or licensees of the same relevant market; or

(f) other abuses of dominance deemed by the State Administration forIndustry and Commerce.

The above provision is different with EU Regulation 316/2014, which doesnot address the abusive issues by patent pools. It needs to point out that the abovebehaviour will not be prohibited if the management organisation of a patent pooldoes not have a dominant position in the relevant technology market or therelevant product market which incorporates the relevant technology.

4.5 SEPS

Under Article 13 of the Abusing IPR Rules, the term ‘SEPs’ refers to patents thatare essential to implement a certain standard. The Abusing IPR Rules addressanticompetitive issues during the standard setting process.Article 13 provides that adominant company shall not, without justifiable reasons, conduct the followingactions when formulating and implementing standards:

(a) deliberately not disclose its patent information to standard settingorganizations during the standard setting process, or explicitly waive itsright during the standard setting process, but then claim its patent rightsafterwards;

(b) after such patents have become SEPs, refusing to licence them on fair,reasonable, and non-discriminatory (‘FRAND’) terms, tying products orimposing unreasonable trading conditions which eliminate or restrictcompetition.

The EU Commission and US Federal Trade Commission have over the lastten years pursued complaints against the DRAM chip developer Rambus forallegedly wilfully withholding patent applications from the JEDEC standardssetting process and later asserting those patents against operators of the standard.18

There is no doubt that the State Administration for Industry and Commerceofficials had the above cases in mind when they drafted Article 13 of the Abusing

18 Both the EU and U.S. proceedings were eventually closed without any finding of infringement onthe part of Rambus on the facts of those cases. Please see Commission Decision of 9 December2009 in Case COMP/38.636 – Rambus, OJ [2010] C 30/17, full text available at http://ec.europa.eu/competition/antitrust/cases/decisions/38636/en.pdf; and FTC Order dismissing thecomplaint, 12 May 2009, http://www.ftc.gov/os/adjpro/d9302/090512orderdismisscomplaint.pdf.


IPR Rules with regard to patent ambushes. Thus, Article 13 is in line with theinternational practice regarding SEPs.

However, since the wording used in Article 13 is still very vague, it remains tobe seen how this principle will be applied in practice. There are already severalantitrust cases with regard to SEPs. Unfortunately, the Chinese enforcementauthorities have not published as many details as possible.Thus, it is very hard foroutsiders to understand how the authorities reach their conclusions. In theQualcomm case, for instance, although the National Development and ReformCommission has published their decision, the relevant analysis is notcomprehensive. One of the key findings is expressive price. But the evidencementioned by the authority in their decision is not very convincing since it nevercalculate the relevant costs in order to prove the price is very high. Currently, mostof the investigated companies in SEP-related cases are foreign companies and thecomplainants are mainly Chinese companies. Because of this, how Chineseantitrust authorities enforce AML with regard to SEPs will be watched closely byglobal companies and antitrust experts.

5 ANALYTICAL APPROACH AND PUNISHMENT FOR VIOLATINGTHE ABUSING IPR RULES

5.1 ANALYTICAL APPROACH

In order to guide enforcement authorities, the Abusing IPR Rules put forward afive-step analytical approach for deciding whether an action is anticompetitive. Inan investigation, the State Administration for Industry and Commerce and theircounterparts at provincial level need to:

1) Identify the characteristics and form of the conduct;2) Identify the type of relationship (i.e., horizontal or vertical) between the

companies involved;3) Define the relevant market;4) Examine the market positions of the parties concerned; and5) Analyse the impact of the conduct on competition in the relevant

market.19

The above analytical approach is useful for both the enforcement authoritiesand companies to decide whether an anti-competitive IPR exist. Neither theAML nor other AML related implementation rules/guidance has provided suchanalytical approach before.

19 See Art. 15 of the Abusing IPR Rules.


5.2 PUNISHMENT FOR VIOLATING THE ABUSING IPR RULES

Article 17 of the Abusing IPR Rules merely repeats the content of Article 46 andArticle 47 of the AML. It provides that where the abuse of IPRs eliminates orrestricts competition and constitutes a monopolistic agreement or abuse ofdominance, the State Administration for Industry and Commerce may order suchundertakings to cease their illegal acts, confiscate their illegal earnings, and imposea fine ranging from 1% to 10% of their turnover from the preceding year.However, neither the AML nor the antitrust rules/guidance clearly defines thescope of the previous year turnover. In theory, it could be the involved company’sgroup global turnover, similar to the turnover scope adopted by the EuropeanCommission. In practice, however, the Chinese antitrust authorities interpret thescope of turnover as the so-called ‘relevant turnover’, which means the turnovergenerated from the relevant product in the relevant geographic market. In theQualcomm case, for example, the relevant turnover of Qualcomm is Qualcomm’sturnover in China and not its global turnover. In the Daimler case,20 Daimler’sfines were calculated based on its turnover in the Jiangsu Province rather than thewhole of China, not mention globally.

6 CONCLUSION: WHAT DO THE ABUSING IPR RULES MEAN FORDOING BUSINESS IN CHINA?

As the second biggest economy after the US, China is a huge market for IPRs.Indeed, most key IPRs are not held by Chinese companies. Recent antitrust casesinvolving IPRs, such as the Qualcomm case and the IDC case, also demonstrate this.International companies are concerned about whether the AML will be enforcedin a way as to protect Chinese companies, since the majority of them are licenseesrather than licensors.

Moreover, access to technology and the development of domestic, indigenoustechnology are key factors in China’s development strategy. China is trying tomove up the ladder and develop a new technology economy in order to transformits economic development model.

Against this background, the adoption of the Abusing IPR Rights attractshuge interest from global companies. How the Chinese antitrust authoritiesenforce the AML with regard to IPRs will have a profound impact on companies’

20 In April 2015, Daimler was fined RMB 350 million for resale price maintenance in the JiangsuProvince. See China Fines Mercedes & 57 Million in Price-Fixing Probe, Rapid News Network, 23 Apr.2015, available at http://www.google.com.hk/url?sa=t&rct=j&q=&esrc=s&frm=1&source=newssearch&cd=2&ved=0CCIQqQIoADAB&url=http%3A%2F%2Frapidnewsnetwork.com%2F800-jobs-go-in-sainsbury-s-shake-up%2F11800%2F&ei=nP9CVeuNIMG5mwW554DADw&usg=AFQjCNHIEMkbRjs2N3lOoGtqWazSQyuMEA.


profit levels and business models, including their willingness to invest in China.Thus, it is very significant for China to strike the right balance in order to meet itsdevelopment goals.

In general, the Abusing IPR Rules are much shorter than the relevantrules/guidelines in the EU and the US.As this article shows, however, the AbusingIPR Rules have not deviated a lot from the international practice in the IP andantitrust area.Thus, the issue is not whether the Abusing IPR Rules are consistentwith international practice but how the Abusing IPR Rules will be enforced bythe State Administration for Industry and Commerce and their counterparts atprovincial level, since the rules are still very general.

For some years now, businesses have been aware that their mergers andacquisitions may attract close scrutiny by the Chinese authorities. Many businesses,however, have not appreciated the speed with which the Chinese authorities haveembraced the enforcement of other areas of antitrust law, namely the prohibitionsof IPR related anti-competitive agreements and abuses of dominance. It issignificant that both the National Development and Reform Commission and theState Administration for Industry and Commerce have not limited theirenforcement activities to traditional manufacturing and service sectors, but haverapidly turned their attention to the complex IP/antitrust interface, an area thatthe European Commission, for example, is investigating only cautiously even 50years after the adoption of the EU competition rules.

It will be the eighth anniversary of the AML when the Abusing IPR Rulescome into effect. Due to the complexity of IPR related competition law issues, theState Administration for Industry and Commerce has come a long way to adoptthese rules. The Abusing IPR Rules are an important milestone in thedevelopment of Chinese antitrust law, although further improvement and moredetailed guidance are needed.

Given the fact that Qualcomm was fined nearly 1 billion US dollars forabusing its IPRs, it is time for companies to take the AML seriously and re-assesstheir antitrust compliance in consideration of the Abusing IPR Rules. Given theincreasing enforcement against anti-competitive IPRs in China, the Abusing IPRRules were adopted at the right time for companies since the rules at least reassurethat the Chinese authorities will pursue anti-competitive abuses of IPRs in amanner consistent with the prevailing international practice.


Editor José Rivas

Associate Editor Layla BakkerBook Review Editor Valentine Korah

Publisher Simon BellamyUS Review Editors Spencer Weber Waller & Maurice E. StuckeEconomics Review

Editor Doris Hildebrand

Advisory Board

Editorial Board

All correspondence should World Competition be addressed to: Bird & Bird, Avenue Louise 235 box 1, 1050 Brussels, Belgium. Tel.: +32 (0)2 282 6070 Fax: +32 (0)2 282 6011 E-mail: [email protected]

© 2015 Kluwer Law International BV, The Netherlands, All Rights Reserved.

Robert Anderson, World Trade OrganizationSir Christopher Bellamy, President, Appeals Tribunal, United Kingdom Competition CommissionManuel Conthe, Former Chairman of Spain’s Securities CommissionSir David Edward, Professor, University of Edinburgh; former Judge, Court of Justice of the European Union.Claus-Dieter Ehlermann, Senior Counsel at Wilmer Cutler Pickering Hale & Dorr LLPJonathan Faull, Director General, Internal Market and Services,European Commission, Professor of Law, Vrije Universiteit BrusselsEleanor M. Fox, Walter J. Derenberg Professor of Trade Regulation, New York University School of LawAllan Fels, Professor at the Australia and New Zealand School of GovernmentNicholas Forwood, Judge, General Court of the European UnionRafael García-Valdecasas y Fernández, Former Judge, General Court of the European UnionFrancisco Enrique González Díaz, Cleary Gottlieb, Steen and Hamilton, BrusselsBarry E. Hawk, Director, Fordham Corporate Law Institute and Partner, Skadden, Arps, Slate, Meagher & Flom LLPHerbert Hovenkamp, Ben V. & Dorothy Willie Professor of Law and History, University of Iowa, USARafael Illescas Ortiz, Professor of Commercial Law, University Carlos III, MadridFrédéric Jenny, Professor of Economics at ESSEC, Chair of the OECD Competition CommitteeValentine Korah, Emeritus Professor, University College London, Honorary Professor of the College of EuropeKoen Lenaerts, Judge, Court of Justice of the European UnionIgnacio de León, Professor, Department of Economics, New York UniversityPatrick McNutt, Visiting Fellow, Manchester Business School, UK and former Chairman, Competition Authority, Dublin and former Chairman, Jersey Competition & Regulatory Authority, UK.John L. Murray, Chief Justice of Ireland; former Judge, Court of Justice of the European Union and Visiting Professor, l’Université Catholique de LouvainDavid O’Keeffe, Professor, University College London and Visiting Professor, College of Europe, BrugesGiuseppe Tesauro, Judge, Corte Constituzionale della Repubblica italianaSpencer Weber Waller, Professor and Director, Institute for Consumer Antitrust Studies, Loyola University Chicago School of LawWouter P.J. Wils, Hearing Officer, European Commission, and Visiting Professor, King’s College London

Ralf Boscheck, Marie Demetriou, Pablo Figueroa, Romain Galante, Juan Gutiérrez,Donogh Hardiman, Benoît Keane, Pablo Muñiz, Ali Nikpay, Morten Nissen, Kletia Noti, Laura Olza-Moreno, Dimosthenis Papakrivopoulos, Rudolph Peritz, Tom Pick, Azza Raslan, J. Matthew Strader, Nicoleta Tuominen, Marta Andrés Vaquero, Michael Weiner, Peter Whelan

Mode of citation: 38 W.Comp. 4 8454-1101 NSSI

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