The refusal to license intellectual property as an antitrust violation in China: how should the current approach be improved?

Abstract

The holder of intellectual property is entitled to exploit its intellectual property in principle. However, China’s Anti-monopoly Law prohibits the anti-competitive refusal to deal, including the refusal to license intellectual property, which might constitute an abuse of market dominance. Existing anti-monopoly rules related to the refusal to license intellectual property in China are rather general and lack a definite test for the assessment, leaving too much discretion for Chinese competition authorities to interpret the law. As the two main antitrust jurisdictions globally, the US and the EU have different approaches to the refusal to license intellectual property. By reviewing comparative experience, the EU approach is more appropriate for China. It is suggested that China should establish a clear-up test to analyse the refusal to license intellectual property cases under the Anti-monopoly Law, considering the indispensability of intellectual property and its influences on innovation. Meanwhile, Chinese law should include provisions on the remedy of a refusal to license. In this regard, China can make its anti-monopoly enforcement as to the refusal to license more transparent and build up a stable expectation for both domestic and foreign high-tech undertakings.