Essential facilities with Chinese characteristics: a different perspective on the conditional compulsory licensing of intellectual property

Abstract

China has become the world’s fastest growing market for licensed goods and by some estimates, China has found to be emerging d as the world’s largest patent filing nation. China’s State Administration of Industry and Commerce (SAIC) has indicated that it is close to finalizing rules on how to enforce the Anti-Monopoly Law in intellectual property-related fields. These Regulations of the Administration for Industry and Commerce on the Prohibition of Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (‘AML Enforcement Rules in IP’ or ‘the rules’) contain the potential for compulsory licensing. In particular, the rules contain provisions intended to compel access to standard-essential patents and to curtail patent ambushes arising out of standards setting. In general, the rules presume it to be an abuse of a dominant position when a patentee deliberately fails to disclose the existence of a patent knowing it would likely be included in a standard, in violation of the standard-setting organization’s rules. The IP Enforcement Rules may promote a kind of ‘essential facilities with Chinese characteristics’—a result, that while similar to EU approaches, is at great odds with the approach that courts in China’s largest single-nation trading partner, the United States, have taken in the past decade.