Guideline Against Monopolies Released for Public Comment

The guideline against monopolies resulting from misuse of intellectual property rights, drafted by the National Development and Reform Commission, was released on the last day of 2015 for public review.

The draft edition was finished in late October. The drafters had asked for advice from industry associations, companies, lawyers and scholars before the guidelines were made public, said Zhang Handong, head of the price-supervision and anti-monopoly bureau of the NDRC.

They also sent the draft to some foreign anti-monopoly agencies and international organizations, inviting comment.

The edition will be submitted to the State Council in the first half of this year, Zhang said.

The guideline "talks about protocols between market operators with or without competitive relations", and covers eight possible conditions including cross-licensing, joint research and development and price limits, said Lu Yanchun, deputy director of the price-supervision and anti-monopoly bureau.

"All of the conditions may eliminate or reduce competition and restrain innovation, but may increase efficiency," Lu said. "We need to analyze each case individually to avoid prosecution of just use of IP rights."

Xu Xinyu, an official at the bureau, said the guideline defines whether an IP rights owner has misused market dominance based on international theories and common practice, as well as the experience of domestic law enforcement in recent years. One such case involved the US smartphone chipmaker Qualcomm, which was fined 6 billion yuan ($920 million) last year for violating China's anti-monopoly law.

Shi Jianzhong, deputy president of the China University of Political Science and Law and a member of the drafting team, said that one of the highlights in the guideline is the introduction of market share criteria.

"By setting such criteria, the guideline rules that those protocols that do not greatly exclude competition can be forgiven according to the anti-monopoly law," he said. "The introduction of market share criteria will provide companies with clearer rational expectations and reduce their compliance costs."

The NDRC has the responsibility to draft six books of guidelines related to the anti-monopoly law, which it began in June 2015.

(Source: China Daily)