FTC Chairwoman Ramirez on China’s Approach to Licensing Standards Essential Patents in China

Federal Trade Commission Chairwoman Ramirez recently delivered a speech on  “Standards-Essential Patents and Licensing: An Antitrust Enforcement Perspective at Georgetown University’s Global Antitrust Conference” (Sept. 10, 2014).    Here’s what she said about China:

“In contrast to the FTC’s and EC’s approach, media reports indicate that China’s antitrust authorities may be willing impose liability based solely on the royalty terms that a patent owner demands for a license to its FRAND-encumbered SEPs, as well royalty demands for licenses for other patents that may not be subject to a voluntary FRAND commitment.

I am seriously concerned by these reports, which suggest an enforcement policy focused on reducing royalty payments for local implementers as a matter of industrial policy, rather than protecting competition and long-run consumer welfare.

As I have stated previously, here and elsewhere, I am of the firm belief that consumers are best served when competition enforcement is based solely on sound economic analysis of competitive effects. A contrary approach risks damaging the investment incentives that are critical to continued growth in many of today’s global technology markets, in the ICT sector and beyond. We intend to continue to engage with our counterparts in China and around the world on these issues, in an effort to build consensus on policies that will benefit competition and consumers globally.”

Here is the link to the full text of the speech.

 

In an unrelated development, Deputy FTC Commissioner Marueen Olhausen was reported by the Chinese press as cooperating in a “joint siege” (共商围剿) on “Patent Troll” companies, with the Chinese, European and Korean enforcement agencies, at an antimonopoly law conference in Seoul, Korea on September 4 which focuses on Patent Assertion Entities.  At that conference, NDRC’s Xu Kunlin reportedly discussed  “problems arising from bringing enforcement actions against patent trolls companies” with foreign competition enforcement counterparts.   Xu also reportedly discussed enforcement actions against holders of SEP’s involving bundling of patents, including licensing of expired patents.

Of course, patent trolls have some history in China, as I have previously noted.  The Chinese press noted that Olhausen referred to the FTC’s on-going research into this area.

Xu Kunlin also took the opportunity to respond to criticisms of selective enforcement of China’s AML law against foreign companies. (update posted Sept. 14, 2014)

 

One thought on “FTC Chairwoman Ramirez on China’s Approach to Licensing Standards Essential Patents in China

  1. chinaipr2 says:

    Here’s information on a PAE that media reports as being state-funded and operated: http://ipbiz.blogspot.com/2014/09/how-much-will-chinas-ruichuan-ipr-funds.html

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