China publishes SEP antitrust guidelines
China has published new guidelines on antitrust issues associated with patent pooling and the licensing of standard-essential patents (SEPs).
The guidelines, published September 28 the State Administration for Market Regulation (SAMR), avoid precise definitions of anti-competitive behaviour, but outline key factors to be considered when assessing antitrust risks.
While patent pooling can reduce transaction costs, “it may also exclude or restrict competition,” said a translated version of the guidelines published by the National Law Review.
This depends on factors including the patent owners’ market share, and whether they license the IP at “unfairly high prices”.
The guidelines also highlighted the risk of SEP owners using a dominant market position to extract inflated licensing fees.
The SAMR said authorities should take the “behaviour of the negotiating parties in the negotiation process and their true wishes” into account. This should include the licensing offers made by both parties during negotiations.
A landmark ruling from Germany’s top court in July stipulated that companies seeking access to SEP-protected IP must demonstrate themselves to be a “willing licensee” in negotiations.
The judgment came after SEP patent pool operator Sisvel accused Chinese smartphone maker Haier of frustrating negotiations with so-called “hold-out” tactics.
Haier, meanwhile, accused Sisvel of failing to offer its IP on fair, reasonable, and non-discriminatory (FRAND) terms.
The German court endorsed the view of Justice Colin Birss of the English Court of Appeal, who wrote in his 2017 decision in Unwired Planet v Huawei that a “willing licensee must be one willing to take a FRAND licence on whatever terms are in fact FRAND”.
The Chinese company failed to meet this obligation during negotiations with Sisvel, the court concluded, but Haier has challenged the ruling at the country’s Constitutional Court.
Birss discussed the fall out from the influential Unwired Planet decision during a recent interview with LSPN Connect.
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