China: SAIC's New IPR Regulation To Take Effect On 1 August 2015

Last Updated: 16 June 2015
Article by Hannah C. L. Ha and John M. Hickin

Keywords: SAIC, China, IPR regulation

The past decade has seen a significant shift in the competitive landscape of China's science and technology sector. From the manufacturing floor to a major contributor to scientific advances and technological innovation, spending on R&D continues to increase and Chinese companies are emerging as genuine contenders to worldwide brands and renowned research facilities.

Against this backdrop, on 13 April 2015, the State Administration for Industry and Commerce (SAIC) released the final version of the Provisions on Prohibition of Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (IPR Regulation) which will take effect on 1 August 2015.

The IPR Regulation comes at an opportune time, and reflects the growing recognition of intellectual property rights (IPR) protection in China. In fact the IPR Regulation was first conceived in 2008 pursuant to the government issued National Intellectual Property Strategy Outline (Outline)1. Its enactment this year represents the fruits of a 7-year-long legislative process, including numerous rounds of public consultation during which issues on the interface between IPRs and competition law were debated and explored.

Another Piece in the IPR-related Antitrust Legal Framework

The IPR Regulation supplements Article 55 of the Anti-monopoly Law (AML) which is the principal rule for IPR-related conduct. Article 55 states that the AML does not apply to companies which exercise their IPRs in accordance with applicable laws and administrative regulations on IPRs, unless the companies abuse their IPRs to eliminate or restrict competition.

The IPR Regulation is the first IPR-dedicated piece of antitrust regulation. However, it will only apply to enforcement action taken by the SAIC, not the National Development and Reform Commission (NDRC) or the Ministry of Commerce (MOFCOM). Notably, the exclusion of provisions regulating pricerelated abuses in the final version of the IPR Regulation means that price-related abuses will remain the NDRC's exclusive jurisdiction.

More recently, towards the end of May 2015, the State Council's Anti-Monopoly Commission announced that the NDRC has been tasked with developing a set of antitrust guidelines, in consultation with the SAIC and MOFCOM. One of the guidelines will address specific issues relating to abuses of IPR which eliminate or restrict competition. It will be interesting to see, in due course, how the new guideline will interact with the IPR Regulation.

Introduction of Safe Harbours

Article 5 of the IPR Regulation introduces the following safe harbours to determine whether an IP-related agreement is likely to restrict competition:

The safe harbours are a key feature of the IPR Regulation. They stipulate conditions which act as proxies for measuring the impact of an agreement on competition, which, when met, raise a presumption that the IPR agreement is unlikely to be anticompetitive. The presumption is rebuttable, and parties to an agreement may lose the protection of the safe harbour if there is evidence showing an IPR agreement has the effect of eliminating or restricting competition.

The safe harbours are modelled upon the European Commission block exemption for technology transfer agreements (TTBER), but differ in an important respect. Whilst the TTBER safe harbour2 exempts certain agreements on the presumption they fulfil Article 101(3) of the Treaty on the Functioning of the European Union (the equivalent of Article 15 of the AML), i.e., their benefits outweigh their harm, the IPR Regulation safe harbours fall short of providing justification for negative effects on competition, and accords more limited protection.

IPR-related Abuses of a Dominant Market Position

Articles 7 – 11 of the IPR Regulation prohibit members of patent pools in a dominant market position from abusing their dominance and provide a list of IPRrelated abuses, including, but not limited to, forcible bundling, exclusive dealing, imposing unreasonable restrictive conditions and discriminatory treatment.

Additionally and despite objections, the SAIC has adopted the essential facilities doctrine. Article 7 sets out three factors that will be considered in determining what constitutes an "essential" IPR:

  • The IPR has no reasonable substitute and is essential for other undertakings to compete in the relevant market;
  • Refusal to license the IPR will cause an adverse impact on competition or innovation in the relevant market, leading to the impairment of consumer or public interest; and
  • Licensing the IPR will not cause unreasonable damage to the licensor.

These factors define and limit the scope of essentiality to an extent, but Article 7 nonetheless augments legal uncertainty around how the tension between IPR protection and competition will be resolved, and when companies will find themselves at the tipping point where the objectives of competition law overtake an essential IPR.

Two Special IPR-related Activities

The IPR Regulation also provides guidance on patent pools and standard setting. Specifically, Articles 12 and 13 provide that:

There are issues that remain unclear and it is necessary to cross-reference other IPR-related rules for clarification. For example, with regards to regulation of national standards, the Administrative Regulation on the National Standards involving Patents (Tentative) provides the procedures for disclosure and publication of standard essential patents.

Final Remarks

Local and international observers have, in recent years, witnessed a clear and inevitable trend towards a more pro-active approach to IPR-related antitrust enforcement in China. China's developing regime has come under scrutiny as a result of high-profile IPR-related antitrust investigations, civil suits and merger control cases involving foreign companies.

Despite concerns expressed by international IP practitioners, the IPR Regulation is just one of many indications that China will no longer be tolerant of IPR infringements. As China is a key market for multi-national corporations, foreign companies operating in China that hold key assets in IPRs should be wary of the impact of the IPR Regulation and ensure early compliance before the IPR Regulation takes effect on 1 August 2015.


1 The National Intellectual Property Strategy Outline was a high level government strategy issued in 2008. It recognised that there were, at the time, IPR-related abusive practices which impeded fair competition and recommended issuance of specific legislation to regulate the market and protect public interest.

2 See Paragraph 41 of the Guidelines on the application of Article 101 of the Treaty on the Functioning of the European Union to technology transfer agreements.

3 "Patent Pool" refers to an agreement by which two or more patentees jointly license their patents to a third party.

Originally published 11 June 2015

Visit us at

Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2015. The Mayer Brown Practices. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.