China: Consultation closed on draft Provisions on Intellectual Property Rights Excluding and Restricting Competition

On 27 July 2022, China's State Administration for Market Regulation (SAMR) closed its consultation on the draft Provisions on Intellectual Property Rights Excluding and Restricting Competition, which update its regulations on the use of intellectual property rights in anticompetitive agreements in line with the recently amended Anti-Monopoly Law. The draft Provisions prohibit the use of intellectual property rights to restrict competition or abuse a dominant market position. Further, the draft Provisions lay out the applicable fines for violations of its articles. According to the draft, any entity using its intellectual property rights to limit competition and the regulators determine that its actions represent a monopoly agreement, the entity will be fined with to up to 1% of its turnover from the last financial year and the income obtained through the illegal acts will be confiscated. The entities that abuse their intellectual property rights to illegally acquire or merge with other entities, will face a fine of up to 10% of their turnover.