Tiếng Việt
中文 (中国)
(Vietnam) Article 19 of the IP Guidelines explain how businesses with a dominating market position can impose differing licensing restrictions on transaction counter-parties with virtually equivalent conditions without justifiable reasons, resulting in discriminatory treatment. It also describes how to examine this behavior, including the conditions of the transaction counter-parties, the licensing agreement’s provisions, and the discriminatory treatment.
Grant-back
In contrast to the draft IP Guidelines, which only address exclusive grant-back, Article 9 of the IP Guidelines also addresses sole grant-back, which means that only the licensor or any third party designated by the licensor, as well as the licensee, have the right to implement improvements or new achievements. Grant-back can normally encourage new accomplishments and investments in those accomplishments, but sole and exclusive grant-back might limit licensees’ innovation motivation and have the consequence of eliminating or reducing market competition.
Furthermore, the IP Guidelines state that exclusive grant-back is more likely to remove and restrict competition than sole grant-back. The IP Guidelines include the following elements in determining whether solo grant-back and exclusive grant-back have the effect of eliminating or restricting market competition:
- Whether the licensor offers significant consideration for this grant-back;
- Whether the licensor and licensee require mutual exclusive or sole grant-back in cross-licensing;
- Whether the grant-back results in the concentration of improvements or new accomplishments in a single business in order for it to gain or enhance market domination;
- Whether the grant-back affects the licensee’s desire to develop.
Forbidden of challenges to the validity of IPRs
The IP Guidelines also prohibit challenges to the validity of IPRs. According to Article 10 of the IP Guidelines, a “no-challenge clause” is a condition in an IPR licensing-related agreement in which the licensor compels the licensee not to raise challenges to the validity of its IPRs. In analyzing the competitive exclusion or limitation effect of a no-challenge provision on the relevant market, the following considerations may be taken into account:
- Whether the licensor requires all licensees to refrain from challenging the validity of its IPRs;
- Whether royalties are levied for licensing IPRs associated with the no-challenge clause.;
- Whether the IPRs associated with the no-challenge clause may act as a barrier to entry for the downstream market;
- Whether the no-challenge clause’s IPRs will impede the deployment of other competing IPRs.
- Is the licensing of IPRs that are subject to the no-challenge clause exclusive?
- Is it possible for the licensee to suffer significant damages if it contests the validity of the licensor’s IPRs?
To practice IPRs in which the protection period has ended or it has been ruled invalid
Article 18 of the IP Guidelines forbids businesses with a dominant market position from attaching transaction restrictions that limit transaction counterparties’ ability to claim over expired or invalid IPRs. This viewpoint is also supported by enforcement practice.
Cross-licensing
According to the IP Guidelines, cross-licensing is the mutual licensing of intellectual property rights (IPRs) between businesses. The IP Guidelines have clearly stipulated that while cross-licensing can typically decrease the costs of IPR licensing and enhance IPR implementation, it can also have the consequence of precluding or restricting market competition. Furthermore, the following criteria should be examined in determining if cross-licensing has an exclusionary or restrictive effect on competition in the relevant market:
- Whether the cross-licensing is sole licensing;
- Whether the cross-licensing creates a barrier to third-party entrance into the relevant market;
- Whether the cross-licensing eliminates or limits competition in the relevant downstream market;
- Whether the cost of connected items has increased.
Patent pooling
In the context of China’s antitrust regime, the SAMR IP Provisions define patent pooling as “agreement-based arrangements under which two or more patentees jointly license their respective patents to third parties through an equity joint venture established specifically for this purpose, or by entrusting management to a particular member of the patent pool or an independent third party.”
According to the IP Guidelines, patent pooling can minimize transaction costs, enhance licensing efficiency, and encourage competition. Patent pooling, on the other hand, has the potential to eliminate or limit competition. The IP Guidelines list many elements that should be considered while analyzing a patent pool, including:
- The market share and control of the businesses in the relevant market;
- Whether a patent pool’s patents cover technologies that are interchangeable;
- Whether pool members are prohibited from licensing patents or doing research and development outside of the pool.
- Whether firms use patent pooling to share pricing, production, and other goods-related data;
- Whether businesses engage in cross-licensing, exclusive or exclusive grant-back, execute no-challenge agreements, or impose other limitations, including through patent pooling;
- Whether businesses, among other things, through patent pooling, license patents, perform tying sales, impose excessive transaction restrictions, or apply the discriminatory treatment.
(Source: Zhong Lun Law Firm)
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