It was informed from SAIC on June 10 that to promote innovation and competition, the State Administration for Industry and Commerce elaborates on Clause 55 of Anti-monopoly Law, and formulated the Regulation of Industrial and Commercial Administrative Authorities Prohibit Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (draft) (hereinafter referred to as the Regulation), which regulates prohibition of abuse from five aspects.

First, it specifies "stopping the operator’s abuse of intellectual property right to eliminate or restrict competition, in order to protect competition and encourage innovation".

Second, it prohibits business parties from reaching monopoly agreement in the exercise of intellectual property.

Third, in addition to the principle prohibition of business parties’ abusing dominant market position in exercising intellectual property rights, it specifies specific circumstances of refusing licensing of intellectual property rights, the tied sale related to intellectual property rights and unreasonable restrictions related to intellectual property rights and so on.

Fourth, it specifies whether certain specific types of exercising intellectual property constitute the relevant monopoly, such as patent pools, patent exercise in the formulation and implementation of standards, behavior of copyright collective management organizations and abuse of warning letters of intellectual property infringement. These acts may constitute monopoly agreements and abuse of dominant market position, respectively or simultaneously, but mainly refers to the latter.

Fifth, it regulates the basis, principle and specific penalties for the industry and commerce authorities to enforce survey and punishment on the business parties’ exercise of intellectual property rights which constitutes elimination or restriction of competition.

The Regulation seeks public comment from June 11.