Risks of Grant-back Provisions in Licensing Agreements: A warning to Patent–heavy Companies

By Susan Ning [1], Ting Gong, Yuanshan Li

I.  Summary

In recent years, the interplay between intellectual property rights (“IPRs”) and antitrust issues has been on the radar of antitrust authorities in China.[2] Since 2014, the National Development and Reform Commission (“NDRC”) and the State Administration for Industry and Commerce (“SAIC”) have launched a number of investigations relating to the abuse of IPRs, which includes the high-profile investigation into IDC and Qualcomm.[3] From litigation perspectives, in 2013 Guangdong People’s High Court issued a thorough and intriguing verdict on Huawei v. IDC, which is an Anti-monopoly dispute regarding the abuse of IPRs.[4]

Against this backdrop, the article will focus on one of the highly controversial issues of IPRs, the grant-back provision, which is widely used by companies doing businesses in China. We will analyze this provision under the Chinese laws, in particular the Anti-monopoly Law of the People’s Republic of China (“AML”).[1] Lately, this provision has been regarded, by its very nature, as being likely injurious to the proper functioning of normal competition, the article also intends to shed some lights on patent-heavy companies when they do businesses in China.

[1]           Anti-monopoly Law of the People’s Republic of China was adopted at the 29th meeting of the Standing Committee of the 10th National People’s Congress of the People’s Republic of China on August 30, 2007.This …

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