1 April 2016
A number of national competition agencies have recently been reviewing their IPR guidelines giving rise to some interesting trends and developments… On 31 March 2016 the Canadian Competition Bureau released updated IPR Enforcement Guidelines (the “Canadian IPR Guidelines”) (see here for a press release and here for the Enforcement Guidelines themselves). The main revisions to the Canadian IPR Guidelines focus on the Bureau’s position on patent settlements and product switching in the pharma sector as well as the conduct of patent assertion entities and conduct involving SEP owners.
This followed hot on the heels of an announcement by the Korea Trade Commission (“KFTC”) on 30 March 2016 that the Guidelines regarding the Unfair Exercise of Intellectual Property Rights (“the Korean IPR Guidelines”), which have recently been amended, became effective on 23 March 2016 (the revised Guidelines do not yet appear to be publically available in English at least). The primary purpose of the Korean IPR Guidelines is to provide a framework for the KFTC to regulate abuse of IPRs by holders of SEPs (including in particular NPEs). The Korean IPR Guidelines were previously amended in December 2014. The most interesting changes at that time included de facto SEPs being included within the definition of SEPs, and the introduction of examples of abusive or unreasonable acts, including the filing for injunctive relief against willing licensees by an SEP holder that has committed to grant a license on fair reasonable and non-discriminatory (FRAND) terms.
The most notable changes to the Korean IPR Guidelines this time around are:
- carving out de facto SEPs from the IPR Guidelines (stakeholders argued that the previous change to include them led to over-regulation of the exercise of IPRs);
- removing the reference to the choice of governing law and dispute resolution mechanism which is unilaterally unfavourable to one party as a factor in determining whether an exercise of patent rights in unfair; and
- including a standard for determining unfair refusals to license which focuses on the intent of the SEP holder, the surrounding economic circumstances and the effects of the refusal to license.
Similar developments have taken place not that far from South Korea, with China also drafting IPR Guidelines. China’s top antitrust authority, the Anti-monopoly Commission (“AMC”) of the State Council has instructed four Chinese antitrust enforcement agencies: the National Development and Reform Commission (“NDRC”); the State Administration of Industry and Commerce (“SAIC”); the Ministry of Commerce (“MOFCOM”); and the State Intellectual Property Office (“SIPO”) to draft antitrust guidelines on IPRs. It has reported that these agencies are finalizing their respective drafts and that they were due to submit them to the AMC by the end of March 2016. The AMC coordinates antitrust policies in China, so it will be responsible for consolidating the drafts and issuing an integrated policy.
The purpose of the Chinese Guidelines will be to provide guidance on when the enforcement of IPRs, and in particular patents, would contravene China’s Antimonopoly law. China’s IPR Policy is still very much under development. However, these latest developments correlate with a growing international view that the Chinese antitrust authorities are increasingly treating IPR as an enforcement priority (although I think it is still agreed that China has some way to go before it becomes a major jurisdiction for the enforcement of IPR). One recent example from 2014 was the Chinese Authorities’ investigation into Qualcomm for anticompetitive conduct involving its licensing of 4G SEPs (see our previous blog post here). It is unsurprising that telecoms and pharma both come under the spotlight in all these new IPR Guidelines given the competition law issues afoot globally in both sectors. The EU Commission’s TTBE Guidelines were also updated in 2014 to include new sections relevant to pharma and telecoms (see our previous blog post here). It is also interesting to see such a detailed approach to IP and antitrust issues being taken in other jurisdictions and that these new Guidelines are in places going further than their EU counterparts, for example in their discussion of PAEs/NPEs, SEPs and injunctions and refusal to license IPRs.