Intellectual Property Licensing and Antitrust Law Enforcement from the CNKI Case-Industry News-Shenzhen deep trust patent Agency Co., LTD

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Intellectual Property Licensing and Antitrust Law Enforcement from the CNKI Case

Release Time：

2022-05-31

After the Chinese Academy of Sciences stopped using CNKI due to a subscription fee of tens of millions, UNESCO also paid attention to the incident on its official Weibo and called for "open science", so that scientists and engineers can use the open Permit their works, data, software, and even hardware to be shared more widely, thereby promoting scientific collaboration and advancing scientific development. Subsequently, the State Administration for Market Regulation announced on May 13 that it would investigate CNKI for suspected monopolistic behavior in accordance with the law. Suddenly, the relationship between intellectual property licensing and antitrust has aroused widespread discussion in the legal and academic circles.

Intellectual property rights and antitrust complement each other and do not conflict with each other.

In practice, intellectual property and antitrust are complementary areas. Intellectual property laws encourage and protect important commercial and cultural assets; antitrust laws focus on market monopoly power and restrictive trade practices, and structure and regulate the use of these assets. Both areas of law are concerned with the incentives that create and protect innovation, and both draw on economic and political theory to analyze major policy issues.

Many market participants would argue that there is an inherent tension between these two areas. However, domestic and foreign legal theory and practice circles generally believe that this understanding is too simple and wrong. Looking around the world, major economies such as Europe and the United States are maintaining and strengthening antitrust law enforcement while encouraging innovation, promoting technological development, and actively supporting digital strategies. When the implementation of intellectual property laws may not promote consumer welfare, major economies such as the European Union clearly need to apply antitrust laws to adjust inter-enterprise agreements or improper use of intellectual property that have the purpose or effect of market segmentation.

In order to promote innovation and regulate intellectual property abuse, antitrust law enforcement agencies such as the United States have formulated relevant guidelines to reasonably evaluate intellectual property abuse. The U.S. Department of Justice and the Federal Trade Commission jointly issued the Antitrust Guidelines for Intellectual Property Licensing in January 2017, and clearly stated that “for the purpose of antitrust analysis, antitrust law enforcement agencies treat conduct involving intellectual property rights differently from other forms of The conduct of property is subject to the same analysis, taking into account the specific characteristics of a particular property right”. my country's "Anti-Monopoly Guidelines for the Anti-Monopoly Committee of the State Council in the Field of Intellectual Property" also clearly stipulates that when analyzing whether operators abuse intellectual property rights to exclude or restrict competition, the following basic principles should be followed: adopt the same regulatory standards as other property rights, and follow the "Anti-Monopoly Relevant provisions of the Monopoly Law; consider the characteristics of intellectual property rights; do not presume that an operator has a dominant market position in the relevant market because it owns intellectual property rights; consider the positive impact of relevant behaviors on efficiency and innovation based on individual case circumstances.

The model of indirectly obtaining copyright licenses from academic journals has been challenged

In the 2022 dispute between the "Chinese Academic Journal (CD Version)" electronic magazine Co., Ltd. and Zhou Xiuluan over infringement of the right to disseminate work information online, the two parties once disputed the "CNKI Mobile HowNet" iOS mobile software operated by the academic journal company through it Whether the provision of downloading and reading services for the works involved in the case to an unspecified public infringes Zhou Xiuluan’s right to disseminate information on the works involved in the case on the Internet, he sought relief from the court.

In this case, the Beijing Intellectual Property Court clearly pointed out that obtaining indirect authorization through a magazine requires sufficient evidence to prove that authorization from the copyright owner has been obtained. The Beijing Intellectual Property Court cited Article 35 of the Copyright Law revised in November 2020, which stipulates that “...after the work is published, unless the copyright owner declares that it shall not be reproduced or excerpted, other newspapers and periodicals may reprint it or use it as an abstract or information publication, but remuneration must be paid to the copyright owner in accordance with regulations." At the same time, Article 17 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Copyright Civil Dispute Cases" revised in December 2020 also clearly states that "...reprinting refers to newspapers and periodicals publishing works that have been published by other newspapers and periodicals. Behavior. Anyone who reprints without indicating the author of the reprinted work and the source of the original newspaper or magazine shall bear civil responsibilities such as eliminating the impact and making an apology."

It can be seen from this case that in terms of copyright licensing, our country's laws and courts attach great importance to protecting the legitimate rights of the copyright holder; When there is insufficient evidence to prove that the magazine has obtained legal authorization from the copyright owner and there is insufficient evidence to prove that the commercial organization that manages the copyright license has obtained the legal authorization from the copyright owner through the magazine, the commercial organization that manages the copyright license uses the copyright owner's works to make profits. The behavior is an infringement and should bear infringement liability.

Antitrust investigations are conducive to promoting fair competition and innovation in relevant markets

First of all, this antitrust investigation will help to better understand CNKI’s business models such as copyright licensing and pricing, as well as the competition in related markets.

On the one hand, surveys can provide insights into a business's trading and pricing patterns. By understanding the licensing agreements with newspapers, journals and other media, the licensing agreements with copyright owners, and the licensing agreements with universities and scientific research institutes, etc., the State Administration for Market Regulation can further understand CNKI’s pricing model for copyright licensing. and business strategies; on the other hand, the investigation can conduct a demand substitution analysis from the user's perspective based on factors such as the characteristics, uses, and prices of copyright licenses. If necessary, a supply substitution analysis can be conducted from the operator's perspective. While considering the particularity of intellectual property rights, Scientifically define the relevant market in which CNKI is located.

Considering that defining relevant markets is usually the starting point for analyzing corporate competitive behavior, it is of great significance for the State Administration for Market Regulation to define the relevant markets where CNKI is located. The wider the market definition, the smaller the company's market share and market power; the narrower the market definition, the greater the company's market share and market power. The relevant market referred to in the Anti-Monopoly Law is different from the market concept understood by business people. It refers to the scope of goods and geographical scope in which operators compete for specific goods or services (hereinafter collectively referred to as goods) within a certain period of time. Ultimately, the State Administration for Market Regulation will accurately outline the market scope of enterprise competition by defining relevant markets, identify competitors and potential competitors, determine the enterprise's market share and market concentration, and then determine the enterprise's market position and analyze the enterprise's market position. The impact of their behavior on market competition, etc.

Secondly, antitrust investigations help to better assess whether CNKI has a dominant market position in the relevant market.

The market dominance here refers to a market position in which an enterprise has the ability to control prices, quantities or other trading conditions in the relevant market, or which can hinder or affect the ability of other enterprises to enter the relevant market. Among them, other transaction conditions involve the type of goods or services, payment terms and technical constraints, etc.

Generally speaking, just because a company owns intellectual property rights does not necessarily mean that it has a dominant market position. To determine whether an enterprise with intellectual property rights has a dominant position in the relevant market, while conducting an analysis based on the Anti-Monopoly Law, it is also necessary to take into account the characteristics of intellectual property rights. Including specific considerations: the possibility and switching costs of the counterparty to switch to substituting technologies or goods; the dependence of the downstream market on the goods provided by using intellectual property rights; the counterparty's ability to check and balance the enterprise.

There is a lot of basic work that needs to be done to analyze whether an enterprise that owns intellectual property rights or manages intellectual property rights has a dominant market position. It cannot be arbitrarily determined that an enterprise has a dominant market position just because it has a certain market share.

Third, antitrust investigations can help better assess whether CNKI has abuses.

The legal acquisition of a dominant market position by an enterprise does not mean a violation of the Anti-Monopoly Law. Only companies that abuse their dominant market position should be held liable for violating the law.

This antitrust investigation will focus on whether there are unfair high prices, whether there is no justified refusal to trade with counterparties, and whether there are other unreasonable trading conditions attached to transactions.

Factors that need to be considered when analyzing whether a company with a dominant market position excludes or restricts competition by licensing intellectual property at unfairly high prices include: the calculation method of licensing fees and the contribution of intellectual property to the value of related goods; the company's commitment to intellectual property licensing; The licensing history of intellectual property rights or comparable licensing fee standards; licensing conditions that lead to unfairly high prices, including charging license fees beyond the geographical scope of the intellectual property rights or the scope of covered products; whether expired or invalid intellectual property rights are included in the blanket license Charge a license fee.

When analyzing whether an enterprise with a dominant market position refuses to license intellectual property without justifiable reasons to eliminate or restrict competition, factors to be considered include: the enterprise's commitment to licensing the intellectual property; whether other enterprises must obtain a license for the intellectual property to enter the relevant market. ; The impact and extent of the refusal to license relevant intellectual property rights on market competition and enterprise innovation; whether the rejected party lacks the willingness and ability to pay reasonable license fees, etc.; whether the enterprise has made a reasonable offer to the rejected party; the refusal to license relevant intellectual property rights Whether it will harm the interests of consumers or the public interests of society.

Fourth, antitrust investigations can help understand the impact on innovation and efficiency of the behavior of commercial organizations that manage copyright licensing.

Generally speaking, the business activities of commercial organizations that manage copyright licensing may have a positive impact on innovation and efficiency, including promoting the dissemination and utilization of technology and improving the efficiency of resource utilization. However, when considering the conditions that need to be met for the positive impact of competition, the State Administration for Market Regulation requires that the positive impact of corporate behavior on innovation and efficiency must meet the following conditions, including: the behavior has a causal relationship with promoting innovation and improving efficiency; relative to other promotions Behaviors that innovate and improve efficiency, within the scope of reasonable business choices of enterprises, have less impact on excluding or restricting market competition; this behavior will not seriously exclude or restrict market competition; this behavior will not seriously hinder the innovation of other enterprises ;Consumers can share in the benefits generated by promoting innovation and improving efficiency. In other words, the positive impacts recognized by the State Administration for Market Regulation need to be considered at the same time: there is a causal relationship between behavior and innovation and efficiency improvement; the enterprise does not exclude market competition under the existing business model, and there are alternative behaviors with less restrictive effects; behavioral exclusion The seriousness of restricting competition and hindering innovation is low; there is a high probability that consumers will obtain innovation and efficiency.

Antitrust analysis in the field of intellectual property is not a generalization. It needs to be combined with individual case circumstances and specific analysis of specific issues. Only by more accurately understanding and grasping the competition situation in the relevant market can we more actively and effectively maintain fair competition and promote innovation, and then promote More open, transparent, collaborative and inclusive development practices in the field.

Source: Economic Information Daily

Author: Huang Jin

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