1. Anti-trust Practice in China concerning SEP and FRAND China Patent Agent (H.K.) Ltd.

2. 2 Why do we care? 2015-9-172 © CHINA PATENT AGENT (H.K.) LTD.

3. 3 USD 3,000,000 (2013) -IDC compensates Huawei as result of a global licensing negotiation USD 975,000,000 (2015) -Qualcomm is fined for not licensing “right” in China. 2015-9-173 © CHINA PATENT AGENT (H.K.) LTD.

4. 4 Who is in charge? 2015-9-174 © CHINA PATENT AGENT (H.K.) LTD.

5. 5 Anti-trust authorities in China -National Development and Reform Commission (NDRC ，发改委 ) -State Administration for Industry and Commerce of the People‘s Republic of China (SAIC ，工商局 ) -Ministry of Commerce (MOFCOM ，商务部 ) 2015-9-175 © CHINA PATENT AGENT (H.K.) LTD.

6. 6 Anti-Monopoly Law (2008) Chapter III Abuse of market power Unfair pricing Dumping Refusing to deal Conditional deals Tie in Discriminations 2015-9-176 © CHINA PATENT AGENT (H.K.) LTD.

7. 7 Anti-Monopoly Law (2008) Chapter IV Merge of competitors Report for approval (by MOFCOM) 2015-9-177 © CHINA PATENT AGENT (H.K.) LTD.

8. 8 What is hot? 2015-9-178 © CHINA PATENT AGENT (H.K.) LTD.

9. 9 Huawei v. IDC (2011-2013) NDRC’s Investigation on IDC and Qualcomm (2013-2015) Regulations on the Administration of National Standards involving Patents, 2013 (provisional) New SAIC Draft of IP Abuse Rules (public comment version) 2015-9-179 © CHINA PATENT AGENT (H.K.) LTD.

10. 10 Huawei v. IDC 2015-9-1710 © CHINA PATENT AGENT (H.K.) LTD.

11. 11 Huawei v. IDC Jul., 2011, IDC filed complaints at ITC and Delaware Dec., 2011, Huawei filed lawsuit in China Feb., 2013, ruled by Shenzhen Intermediate Court May, 2013, Huawei filed complaint at NDRC Jun., 2013, ITC preliminary decision Oct. 2013, upheld by Guangdong High Court Dec. 19, 2013, ITC final decision 2015-9-1711 © CHINA PATENT AGENT (H.K.) LTD.

12. 12 Huawei v. IDC Allegations: Discriminatory over-pricing Tying non-essential patents to SEPs Seeking injunction in U.S. during the negotiation Key issues: Chinese courts’ jurisdiction Market power 2015-9-1712 © CHINA PATENT AGENT (H.K.) LTD.

13. 13 Huawei v. IDC Chinese decision USD 3 million compensation to Huawei 0.019% royalty rate* (*Apple’s rate:0.0187%) U.S. decision All patents invalid or not infringed 2015-9-1713 © CHINA PATENT AGENT (H.K.) LTD.

14. 14 Huawei v. IDC 2013-2014, NDRC’s investigation on IDC May 2014, investigation suspended based on IDC’s commitments: NO discriminatory overpricing NO tying NO free grant back NO lawsuit for forcing 2015-9-1714 © CHINA PATENT AGENT (H.K.) LTD.

15. 15 NDRC’s decision on Qualcomm 2015-9-1715 © CHINA PATENT AGENT (H.K.) LTD.

16. 16 In November 2013, NDRC’s dawn raid at Qualcomm’s Beijing and Shanghai offices In February 2015, NDRC ordered a fine of RMB 6.088 billion (USD 975 million). NDRC’s decision on Qualcomm

17. 17 NDRC’s decision on Qualcomm 2015-9-1717 © CHINA PATENT AGENT (H.K.) LTD. royalty based on cellphones not chips inclusion of expired SEPs (no patent list) mandatory, free grant-back tying non-essential patents/chips refusing to license other chip makers

18. 18 NDRC’s on Qualcomm 2015-9-1718 © CHINA PATENT AGENT (H.K.) LTD. Unilateral commitment 65% sale price as royalty basis submission of patent list exclusion of expired patents no free grant back no tying no unfair restrictions

19. 19 Regulations on the Administration of National Standards involving Patents, 2013 (provisional) 2015-9-1719 © CHINA PATENT AGENT (H.K.) LTD.

20. 20 2015-9-1720 © CHINA PATENT AGENT (H.K.) LTD. Article 5. Reveal patents during standardization Article 9. Announcement on License Term choosing 1 from 3 terms Article 10. NOT included in standards, if refusing to license Article 18. License announcements included in international standards are applicable to national standards

21. 21 New SAIC Draft of IP Abuse Rules 2015-9-1721 © CHINA PATENT AGENT (H.K.) LTD.

22. 22 2015-9-1722 © CHINA PATENT AGENT (H.K.) LTD. Article 9. No tying in Article 10. No unfair restrictions exclusive grant back licensee estoppels forbidding competitive solutions after the license terminates charge on expired or invalid patents forbidding deals with 3rd party Article 13. Anti-competition involving standards submarine standard-related patents violation of FRAND

23. 23 Anti-trust in mergers 2015-9-1723 © CHINA PATENT AGENT (H.K.) LTD.

24. 24 2015-9-1724 © CHINA PATENT AGENT (H.K.) LTD. Google and Motorola (2012) Google’s commitments ： FRAND Android platform Motorola Mobile patents

25. 25 2015-9-1725 © CHINA PATENT AGENT (H.K.) LTD. Microsoft and Nokia (2013-2014) Microsoft’s commitments SEP: FRAND/no injunctions/no grant back non-essential patents: rate and other terms unchanged Nokia’s commitments ： FRAND no injunctions (unless lack of good faith)

26. Thanks for your attention. Yanfeng XIONG Legal Affair Department China Patent Agent (H.K.) Ltd Tel.: (86-10) 82202269 E-mail: xyanfeng@cpahkltd.com 2015-9-1726 © CHINA PATENT AGENT (H.K.) LTD.