https://orcid.org/0009-0006-5439-7092
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ABSTRACT
Standard-essential patents (SEPs) are specific types of patents that protect the technology incorporated in a standard. China has one of the world’s largest telecommunication markets, and its legal policies and practices regarding SEP protection profoundly influence the competitive environment of the Chinese telecommunication market, international economic and trade cooperation, and global telecommunication technology innovation. Recently, frequent disputes in the communication sector surrounding SEPs in China’s judicial practice revolved around the fair, reasonable, and non-discriminatory (FRAND) principles, embodying three key issues: patent hold-up, licence fee rates, and anti-suit injunction. Regarding the patent hold-up and hold-out of SEPs in the telecommunication industry, a balance of interests between SEP holders and implementers in licence negotiations should be achieved under the guidance of the principles of FRAND from the perspective of legislation, administrative management, and the judiciary. Concerning licence fee rates, billing benchmarks should be judged based on individual cases, utilizing a comprehensive approach combining comparable licence agreement methods and top-down methods to determine a fair and reasonable licencing fee acceptable to all parties. In the conflict between anti-suit and anti–anti-suit injunctions, improving the anti-suit injunction rules and international cooperation mechanisms is necessary to achieve fair and non-discriminatory judicial processes and judgment results.
Acknowledgements
The perspectives and conclusions presented in this document reflect solely the authors’ viewpoints and should not be interpreted as representing the opinions of the Chinese government or its research council. Acknowledgment is extended to two anonymous reviewers, whose constructive comments played a crucial role in enhancing the quality of this manuscript. Furthermore, appreciation is expressed for the Asia Pacific Law Review editorial team, whose commitment and outstanding support were invaluable during the submission and publication stages.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
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4 The International Telecommunication Union (ITU) has released the standards and wireless interface technical framework for the sixth-generation mobile communication system (6G), laying the foundation for the development of next-generation mobile communication. <https://www.itu.int/zh/mediacentre/Pages/PR-2023-12-01-IMT-2030-for-6G-mobile-technologies.asp.> accessed 19 May 2023.
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6 For instance, In July 2018, the Ministry of Industry and Information Technology and the National Development and Reform Commission issued the Three-year Action Plan for Expanding and Upgrading Information Consumption (2018–2020), <https://www.miit.gov.cn/jgsj/xxjsfzs/wjfb/art/2020/art_40836e66dc1a4f60ba0d118a0672edba.html>; In March 2020, the Ministry of Industry and Information Technology issued the Notice on Accelerating the Development of 5G,<https://www.miit.gov.cn/jgsj/txs/wjfb/art/2020/art_72744a8f6ad146b6b6336c0e25c029c6.html>.
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9 Jorge L Contreras, ‘A Brief History of FRAND: Analyzing Current Debates in Standard Setting and Antitrust Through a Historical Lens’ (2015) 80 Antitrust Law Journal 42.
10 The data are sourced from the China Judgements Online website, combined with official announcements of the parties involved, court case information disclosure, and relevant news media reports to compile statistics on Chinese court judgements involving SEPs in the telecommunications industry.
11 Jiang Huasheng, ‘Standard Interpretation and Judicial Judgment Study of FRAND Principle’ (2023) 07 Legal applicable 123.
12 Supreme People’s Court Civil, (2008) Min San Ta Zi No.4. The case in question in that reply was not in the telecommunications industry but in the architectural design industry.
13 China included implied licencing in the development of national standards in the Draft Revision of the Patent Law of the People’s Republic of China (Draft for Deliberation) published in 2015, but the revision was deleted from the State Council’s deliberations, and after several iterations during the period, it was deleted from the final draft of the fourth revision of the Patent Law.
14 The Beijing Intellectual Property Court also recognized the amendments to the rejoinder line of thought in Interpretation II when it heard the case of Beijing Aerospace Caesar International Investment Management Co. v Beijing Dongda Haikang Pipe Industry Co. [2017] Beijing 73 Minchu 53.
15 Interpretation II was amended in 2020, but the paragraph was not changed.
16 Henan Western Evergrande Instrument Co., Ltd. v. Henan Nongda Rapid Test Technology Co., Ltd., Supreme People’s Court, (2019) Zui Gao Fa Zhi Min Zhong 382.
17 Royal KPN Co., Ltd. v. Xiaomi Communications Technology Co., Ltd., Shanghai Intellectual Property Court, (2020) Hu 73 Zhi Min Chu 1204 (2020).
18 See C Shapiro, ‘Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting’ (2000) 1 Innovation Policy and the Economy 119.
19 J Wieland, ‘Global Standards as Global Public Goods and Social Safeguards in Governance Ethics: Global Value Creation, Economic Organization and Normativity’ (2014) 48 Ethical Economy.
20 The relevant content about the connotation of FRAND will not be expanded as it is not the focus of this paper’s argumentation. The author will write a separate article to discuss this topic.
21 Shan Lin, ‘Analysing the Information Disclosure Obligation of SEPs’ (2017) 14 China Invention and Patent 70.
22 Ding Yaqi, ‘Research on Antitrust Regulation of Standard-Essential Patent Disclosure’ (2021) 50 Hunan Normal University Social Science Journal 69.
23 Xu Qian and Yan Zhang, ‘Science, Technology, and Innovation: The Next Frontier in Asia-Pacific’s Legal Framework’ (2024) 32 Asia Pacific Law Review 257.
24 The formal release and the effects after implementation are still subject to observation.
25 Peicheng Wu, ‘Bad Faith Litigation of Intellectual Property as a Violation of China’s Anti-Monopoly Law: How Should the Current Approach be Improved?’ (2024) 32 Asia Pacific Law Review 79.
26 Xi’an Xidian Jietong Wireless Network Communication Co., Ltd. V. Sony Mobile Communication Products (China) Co., Ltd., Beijing Intellectual Property Court, (2015) Jing Zhi Min Chu Zi 1194.
27 See Wu Handong, Intellectual Property Law (Law Press, 2014).
28 Huawei Technologies Co., Ltd. v. InterDigital Technology Corporation, InterDigital Communications, Inc., InterDigital, Inc., Guangdong High Court, (2013) Yue Gao Fa Min San Zhong Zi 305 306.
29 Xie Ling, ‘Exploration of Top-Down Methodology in Standard Essential Patent Licence Fees’ [2020] Standard Science 14.
30 See Huawei Technologies Co. v Convison Standard Patent Licensing Fee Dispute [2001] Supreme People’s Court [28 August 2020] (China).
31 See Yue Qiao and Jingjing Guo, ‘Calculation of FRAND Licence Fees for SEPs - Economics Principles and Judicial Practice’ [2021] Research on Financial Issues 47.
32 See e.g. Microsoft Corp v Motorola Inc [2013] C10-1823JLR 1, 1-38; Georgia-Pacific Corp v. United States Plywood Corp [1970] 318 F. Supp. 1116; 166 USP.Q. (BNA) 235.
33 See MA Lemley and C Shapiro, ‘Probabilistic Patents’ [2005] Journal of Economic Perspectives 75.
34 Xi’an Xidian Jietong Wireless Network Communication Co., Ltd. v. SONY Mobile Communication Products (China) Co., Ltd., Beijing Intellectual Property Court, (2015) Jing Zhi Min Chu Zi 1194; SONY Mobile Communication Products (China) Co., Ltd. v. Xi’an Xidian Jietong Wireless Network Communication Co., Ltd., Beijing High People’s Court, (2015) Jing Zhi Min Zhong Zi 454.
35 Ibid 28.
36 Zhu Jianjun, ‘Conflict and Response to Standard Necessary Patent Prohibition Order and Anti-Prohibition Order’ [2021] Intellectual Property Rights 6.
37 Wuhan Intermediate People’s Court, (2020) E 01 Zhi Min Chu 169.
38 See Interdigital Technology Corporation & Ors. v Xiaomi Corporation & Ors. [2020] I.A. 8772/2020 IN CS(COMM) 295/2020.
39 Ibid 36, page 14.
40 According to the Brussels Convention of the European Union, even if the parties are different, if two litigation cases are related and may lead to conflicting judgements, it can constitute parallel litigation, and the court can suspend the trial.
41 Qianxi Wang, ‘Analysis of the Construction of Chinese Anti-Suit Injunctions about SEPs’ [2022] 11.
42 Chaisse Julien, ‘Arbitration of FRAND Disputes in SEP Licensing: Towards Global Substantive and Procedural Rules’ (2021) 4 Intellectual Property Quarterly 273.