Comments on Order No. 74 issued by SAIC

  • Monday April 20, 2015, 19:00
  • Anti-trust, Patent, FRAND

On April 7, 2015, SAIC issued Order No. 74 “Provision for prohibition of activity of excluding and limiting competition by way of abuse of intellectual property” which shall be effective on August 1, 2015. Article 55 of the Antitrust Law mentions “activity of excluding and limiting competition by way of abuse of intellectual property” and Order No. 74 seems to explain this “activity”. At the almost same time, SIPO also suggested adding the following provision into the Patent Law: practice of the patent right should not improperly exclude and limit competition. China now has sufficient experience regarding antitrust just after Qualcomm case. A reference was established after this case. This provision was drafted accordingly. In the form of this provision, the spirit of Qualcomm case will last, which will have continuous effect on development of China’s IP system, particularly patent system, by aiming at elimination of activity of excluding and limiting competition by way of abuse of intellectual property. Patent practitioners should also pay attention to patent pool, Standard Essential Patent (SEP), and FRAND principle. Those concepts were initially introduced into the provision. Especially, how to develop patent pool while avoiding violation of the Antitrust Law will be a hot topic, which is worth further discussing in the practice.