Recent developments in China’s antitrust enforcement highlight the country’s increased focus on standard essential patents (SEPs). The State Administration for Market Regulation (SAMR) recently issued a warning to Avanci, a patent pool, regarding potential antitrust risks in its licensing practices for SEPs related to automotive wireless communication.
While SAMR has not yet taken formal enforcement action or imposed penalties, the warning letter to Avanci serves as a reminder that Chinese antitrust authorities are closely monitoring patent licensing activities, especially those involving SEPs. This is not the first time that Chinese regulators have scrutinized SEPs, as evidenced by past enforcement actions against companies like InterDigital and Qualcomm.
Chinese courts have also demonstrated their willingness to adjudicate disputes over fair, reasonable, and non-discriminatory (FRAND) royalties for SEPs. Recent decisions, such as OPPO v. Sharp and OPPO v. InterDigital, have affirmed the jurisdiction of Chinese courts in determining global licensing rates for SEPs. In a notable case in December 2023, a Chongqing court ruled in favor of a Chinese licensee by establishing global FRAND rates for certain SEPs owned by a multinational licensor.
It is important for licensors to be mindful of Chinese antitrust and intellectual property laws when negotiating licenses involving SEPs, particularly in sectors deemed critical in China. The country’s evolving legal landscape underscores the need for careful consideration of compliance with antitrust regulations and the protection of intellectual property rights in licensing agreements.
In light of these developments, companies engaging in patent licensing activities should seek legal guidance to navigate the complexities of Chinese antitrust and IP laws. Jones Day provides insights on these issues, offering general information and guidance for businesses operating in this rapidly changing regulatory environment. It is crucial for companies to stay informed and proactive in addressing antitrust risks and ensuring compliance with relevant laws and regulations to avoid potential legal challenges in the future.
