ZWeR 2017, 72

RWS Verlag Kommunikationsforum GmbH, Köln RWS Verlag Kommunikationsforum GmbH, Köln 2199-1723 Zeitschrift für Wettbewerbsrecht ZWeR 2017 AufsätzeXiaoye Wang*

Why SEPs have been involved in Antitrust Cases – From A Chinese Scholar’s Perspective

If patents have been included in a technical standard and thus have become standard essential patents (SEPs), the SEP holders normally have to commit to the Standard Setting Organization (SSO) to license their SEPs on fair, reasonable and non-discriminatory (FRAND) terms. Although the FRAND commitments already put constraints on the patentees, more and more disputes over FRAND licensing fees involving SEPs are reaching antitrust enforcement agencies and courts, perhaps due to the fact that the FRAND commitments are often not workable. As demonstrated in the case Huawei v. IDC in Chinese courts, SEPs have special characteristics compared to non-SEPs, i.e. the licensing of SEPs relates more to the public interest, the holders of the SEPs may be thought to have dominant positions in the licensing market of their SEPs, the holder of the SEPs often have made commitments to license on the FRAND terms, and the holder of the SEPs should be allowed to use the injunctive relief only in limited circumstances. This article also proposes that Article 55 of the Chinese Antimonopoly Law (AML) should be reconsidered because it exempts the undertakings who exercise their IPRs in accordance with the laws and administrative regulations on IPRs from the application of the AML. However, as this article shows, the excessive royalty requested or the injunction sought by the holder of SEPs may not violate the patent law, but nonetheless may violate the antitrust law.

Contents

  • I. Introduction
  • II. SEPs relate to public interest to a greater extent
    • 1. Technology standardization has important implications to public interest
    • 2. SEPs relate to public interest to a greater extent compared with non-SEPs
  • III. The holders of SEPs often have dominant positions in the SEPs’ licensing market
    • 1. Technical standardization may enable each SEP to constitute a separate relevant technology market on its own
    • 2. The holders of SEPs are often considered to have dominant positions in the SEPs’ licensing market in Chinese practice
  • IV. The holder of SEPs commits to FRAND licensing
    • 1. FRAND licensing is an agreement between the SSO and the SEP holder
    • 2. Chinese Practices concerning the FRAND licensing
    • 3. Cases related to FRAND licensing should belong to antitrust, not to contact law
  • V. The holder of SEPs Should be limited from using the injunction relief
    • 1. Probable motivation for “patent hold-up” behind the injunction litigation
    • 2. The conflict between injunction relief and FRAND commitment
    • 3. The practice of Chinese courts
  • VI. Conclusion and a thought
*
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Distinguished Professor at Hunan University and Law Professor at Chinese Academy of Social Sciences. The author expresses her thanks to Mr. Lijie Han, Dr. Xiaojin Huang, Dr. Sun Su and Mr. Callum Weinberg for their contributions to this article.

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