Comment of the Global Antitrust Institute, George Mason University School of Law, on the National Development and Reform Commission's Draft Anti-Monopoly Guideline on Intellectual Property Abuse

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This comment is submitted to China's National Development and Reform Commission (NDRC) by the Global Antitrust Institute (GAI) at George Mason University School of Law in response to the NDRC's Draft Anti-Monopoly Guideline on Intellectual Property Abuse. This is the third comment submitted by the GAI to the NDRC on its Draft AML-IP Guidelines. All three of China’s AML agencies are drafting separate guidelines to submit to the State Council of the PRC for consideration. The final guidelines will reportedly apply to all three AML agencies. Overall, we suggested that the NDRC adopt a more compliance-based approach that sets forth basic principles that would allow parties to self-advise. The current Draft Guideline instead sets forth a list of factors that the NDRC will consider when analyzing specific conduct. The Draft Guidelines do not explain the significance of each of the factors or how they will be weighed in the Anti-Monopoly Law (AML) agencies’ overall decision-making process. This approach allows the AML agencies broad discretion in enforcement decision-making without providing the guidance stakeholders need to protect incentives to innovate and transfer technology that could be subject to AML jurisdiction. Lastly, we recommend that the NDRC include throughout the Guidelines examples similar to those found in the U.S. antitrust agencies’ 1995 Antitrust Guidelines for the Licensing of Intellectual Property to illustrate how the AML agencies will apply the basic principles. We also provide specific line-edit proposed edits on four provisions: general analysis, charging “unfairly high” royalties, discriminatory treatment, and injunctive relief.