On August 14, 2012, the draft Guidelines on Anti-monopoly Law Enforcement in the Intellectual Property Field (version 5) prepared by the State Administration for Industry and Commerce were released at the International Seminar on Cutting-edge Issues in the Enforcement of Anti-monopoly Law. The guidelines prohibit the holder of an intellectual property right (IPR) from eliminating or restricting competition by including any of the following provisions in a licensing agreement: (1) requiring the licensee to grant back exclusive rights to improvements to the technology; (2) prohibiting the licensee from challenging the validity of the IPR; (3) restricting the licensee’s freedom to manufacture, use or sell competing products or adopt competing technology after the expiry of the licensing agreement; and (4) other unreasonable trading conditions. According to the draft guidelines, an agreement between competing companies containing any of the following terms will constitute a monopoly agreement in breach of the Anti-monopoly Law: (1) fixing the royalties or the sale price of commodities using IPR; (2) limiting the number of IP licenses or the quantities of products using the IPR produced or sold; (3) dividing the IP licensing market, sales markets for products using the IPR or raw materials procurement market; (4) restricting the purchase and development of new technology or new equipment or products using the IPR; and (5) jointly refusing to license IPR or sell commodities with IPR to a specific trading party. IPR holders who occupy a dominant position on a particular market are also prohibited from refusing to license IPR on a discriminatory basis or from imposing tied sales.

A summary of the draft Guidelines is available here.