Article 20 of the draft stipulates that patent rights shall not be abused to damage public interests or the legitimate rights and interests of others.  Abuse of patent rights to exclude or restrict competition, which constitutes monopolistic behavior, shall be dealt with in accordance with the anti-monopoly law.

How to regulate the abuse of patent rights? Chinese current intellectual property-related laws already have relevant provisions, such as the compulsory licensing system of the Patent Law and the anti-monopoly law stipulating that operators must not abuse intellectual property provisions.

To a certain extent, compulsory patent licensing can effectively avoid the monopoly behavior of patentees.  Articles 48 to 58 of Chinese current patent law are the compulsory license clauses for patent exploitation, which stipulate the circumstances of compulsory license for patent exploitation, how to pay the license fee, and how to resolve disputes between the two parties about the license fee.

In addition to the patent law, the anti-monopoly law has more specific provisions on the monopoly of intellectual property rights.  For example, Article 55 of the Anti-Monopoly Law stipulates that this law does not apply to the conduct of business operators in exercising intellectual property rights in accordance with relevant laws and administrative regulations on intellectual property rights; however, this law applies to operators’ abuse of intellectual property rights to eliminate or restrict competition.

The newly-added provisions of the draft regulation on the abuse of patent rights clarify the relationship between the patent law and the anti-monopoly law.  It is a further improvement of the patent law and can prevent patentees from abusing patent rights to hinder market competition.

"Patent right is a legal monopoly right, but it has a right boundary.  If the patentee goes beyond the boundary, it may constitute an abuse of the patent right.  This may cause two consequences: one is that it constitutes a monopolistic behavior prohibited by the Anti-Monopoly Law; the other is that the behavior does not constitute a monopoly, but it damages the public interests of society or the legitimate rights and interests of others.  The latter is a common patent infringement and should be adjusted by the patent law.  "A typical case of abuse of patent rights that damages the public interest or the legitimate rights and interests of others is the "Rogue", their behavior usually does not constitute a monopoly and is not subject to the anti-monopoly law.  Victims can only seek other legal remedies.  The new provisions of the draft play an important role in regulating such behaviors.

The Chinese Civil Code stipulates the infringer’s liability for infringement, but Chinese current patent law only stipulates that "the patentee is infringed by exploiting its patent without the patentee’s permission", but does not provide for the abuse of patent rights by the patentee to harm the public interest or the legal rights of others, therefore, the victim cannot pursue the infringement liability of the abuser..  If this clause is implemented, relevant Chinese regulations or judicial interpretations can stipulate the infringement liability of the patentee who abuses the patent right in accordance with the relevant provisions of the Civil Code and the Patent Law, and put the abuse of patent right into the cage of the system.

From CNIPA

August 23rd, 2020