| Patent system is an important mechanism to incentivize innovation but it also creates a legal monopoly, while the purpose of Anti-Monopoly Law (AML) is getting rid of the behaviors that restrict competition therefore promote free competition in the market. These two laws although govern different domains, interact closely and have some conflicts, which need to be well balanced to guarantee the well-functioning of the market and the protection of the consumers. The characteristics of patent system determine its monopolistic feature, especially in the standard-setting process, the negative effects of the monopolistic feature is enlarged. Therefore, the rights of holders’of the Standard-Essential Patents (SEPs), as the special kind of patent, need to be limited.The modern specialization of industries brings the problem of incompatibility among products produced by different manufacturers, which has led to the establishments of standard-setting organizations who are responsible of setting unified "industry standards" while the monopoly issue brought by the patents involved in such standards, Standard-Essential Patents, induced the creation of the Fair, Reasonable And Non-Discriminatory (FRAND) terms. China now is still an infant in utilizing the Anti-Monopoly Law to limit the protection provided by the patent system. Comparatively, the patent law system in China is more established and effective practical rules have already been developed; while the Anti-Monopoly Law is relatively new and less-experienced. Currently, the judicial experiences we have focus more on retail price maintenance, horizontal agreements and cartels, while less on cases elated to intellectual property, especially those concerning patent monopoly. The adjudication process is not very systematic and scientific, and there is a big gap in utilizing the economic theories and data.In recent years, big cases concerning FRAND license emerge frequently in China, such as Huawei v. IDC alleging IDC’s abuse of dominant position and the NDRC (National Development and Reform Commission)’s resolution on Qualcomm. Other jurisdictions like US and EU also have certain researches and gains on how to implement FRAND terms in cases, such as using patent pool to tackle the problem of royalty stacking. This thesis will focus on the calculation of royalties of Standard Essential Patentson Fair, Reasonable and Non-discriminatory terms with considerations of the proportional contribution of the patents in the standard, the bargaining power of the licensee and licensor, and the cost and expected benefits of the patent holder in order to achieve the goals of encouraging research and development in the market and well-functioning of the market competition. Comparative study of major cases on this topic in US, EU and China will be conducted to give suggestions to future management of FRAND cases in China.This thesis is divided into three major parts:Part Ⅰ:Introduction of Standard Essential Patents and FRAND terms. Describing the impact of the decisions on disputes rising from licensing of Standard Essential Patents to the relevant market globally, and analyzing the theoretical underpinnings and practical issues in applying the FRAND terms in the SEPs licensing process.Part Ⅱ:The legal systems of SEPs FRAND licensing in US and EU and its relevant case study. For US, the analysis will focus on the case law by US courts together with some of the practices by Federal Trade Commission (FTC) and Department of Justice (DOJ). For EU, the description of the European Competition law and its interaction with the patent laws of different member states, the analysis of the cases managed by European Commission (EC) and European Court of Justice (ECJ) on SEPs FRAND licensing. The focus will be on the nature of FRAND terms defined by the court, the attitudes towards injunctions on FRAND patents, the calculation of royalties under FRAND terms, etc.China’s legal system in SEPs FRAND licensing with regard to patent law and Anti-Monopoly Law. Analyzing relevant cases conducted by courts and NDRC in order to have an understanding of the current legal practices, most encountered problems, and available solutions of China in this area. Identifying the limitations of the current solutions and methods, such as the patent pool and patent-licensing arbitration, etc.Part Ⅲ：The comparative study of the experiences from US and EU with that of China in SEPs FRAND licensing. Summarizing the problems and gaps, such as the oversimplified calculation methods of royalties under FRAND terms, and lack of economic analysis in processing the case; possible "FRAND hold-up" which may result in protectionism that can harm the legitimate rights of the patent holders;and also the potential wrong use of the AML in litigation on abuse of dominant position when the patent holder does not threat the SEP user by injunction. Providing suggestions on how to manage the application of FRAND terms in SEPs licensing so that the protection provided to the SEP holder will not lead to an abuse of dominant position. |
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