Standard-Essential Patents and the Japanese Competition Law in Comparison with China,the U.S.,and the EU

Despite having committed to FRAND (fair, reasonable and nondiscriminatory) terms, not a few standard essential patent (SEP) owners have engaged in holdup (such as suing for injunction, or levying very high royalty), which has triggered antitrust/competition actions in the U.S., the EU, China, Japan, and Korea. This article focuses on the Japanese situation, highlighting its difference with the Chinese one. The Japanese competition agency (JFTC) as well as the Japanese Intellectual Property (IP) High Court have closely studied the jurisprudence in the U.S. and the EU, coming up with solutions in line with those adopted by the U.S. and EU courts and agencies. By contrast, Chinese agencies and courts have devised unique methods for tackling SEP/FRAND issues. First, a Chinese antimonopoly agency has utilized the exploitative-abuse provision of the Chinese competition law for ordering a SEP owner to reduce its royalties to Chinese licensees, regardless of the SEP owners’ FRAND commitment. Second, a Chinese court utilized “nondiscriminatory” portion of FRAND commitment, for mandating virtually the same royalty to be levied on Chinese licensees as that levied on Apple. These methods either leave too much latitude to the agencies or lack a convincing rationale.