The IPR article in China's Anti-Monopoly Law, effective August 1, does not challenge either the possession of an IPR or the legitimate use of an IPR. Instead, it works with the existing IPR legal framework to protect and encourage innovation.
Two experts involved in the legislation of the AML, Prof. Huang Yong from the University of International Business and Economics and Prof. Shi Jianzhong from the China University of Political Science and Law, expressed the same idea in an interview with People's Daily Online.
It is stipulated that the practices of intellectual property rights by undertakings in compliance with the IPR-related laws and regulations are not subject to the Anti-Monopoly Law. It is the abuse of IPR that restricts market competition which triggers this law.
They agreed that the AML and IPR related-laws share a common objective of protecting the drive to innovate. IPR laws, on their part, confer proprietary rights onto IP holders and protect the legal use of the rights. Meanwhile, the AML creates a good competition environment where market players are motivated to pursue profits through innovation.
"It is a misunderstanding to think the AML is in opposition to IPR laws," said Shi. Multinationals need not be worried about legitimate use of their IPR; although understandably so, they pay special attention to the IPR article in the AML because IPR is one of their two most important advantages on the Chinese market. The other is their financial power.
It is also a misunderstanding, noted Prof. Huang, to regard the AML as an opportunity to challenge any legally acquired IPR. Possession of an IPR does not automatically lead to market dominance. And according to China's AML, even market dominance does not indicate a breach in the law.
Both the IPR laws and the AML prevent IPR abuses. "The concept of the abuse of IPR is quite broad. Some of the abuses are not governed by the AML; but by those IPR laws, such as the Patent Law or the Trademark Law," said Huang. The AML is triggered only when an IPR abuse is judged as monopolistic conduct that blocks market competition. Otherwise, the abuse will be subject to IPR laws.
The two experts also make some suggestions for the law's enforcement. They proposed that very specific, special guidelines are needed to define the abuse of IPR under the AML to make sure that the article would be practiced effectively enough to protect both the innovation and the order of market competition.
Hi-tech market giants --- either Chinese or foreign --- have indeed felt pressure from the law. Previously there were no such restrictions in China on the abuse of IPR in a monopolistic way. That has changed due to the enforcement of the AML. But both experts stressed that companies need not get jittered as long as they comply with the law. "The AML tends to protect, rather than exclude your legitimate rights, as long as you do not abuse those rights," said Shi.
They also called for greater innovation-based growth within Chinese companies. There are concerns over foreign multinationals controlling some industries. Huang believes that the pressure can be an incentive for more innovation by domestic companies.
The AML is designed to encourage market competition. "Now Chinese enterprises have to survive in the same market as their strong foreign competitors. They have to improve their competitiveness through competition," said Shi.
By People's Daily Online
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