ESSENTIAL FACILITIES DOCTRINE AND ITS APPLICATION IN INTELLECTUAL PROPERTY SPACE UNDER CHINA'S ANTI-MONOPOLY LAW

Introduction Intellectual property rights ("IPRs") 1 are the cornerstone of the modern economy. 2 Questions regarding the use of another's IPRs have long been a part of antitrust and innovation policy in the United States, Europe, and at the World Trade Organization level. With a six-year-old Anti-Monopoly Law (antitrust law) ("AML"), China has been confronting these issues since the AML's drafting stages. Because of the significant size of China's economy, Chinese antitrust legal remedies related to IPRs will have global effects. Recent drafts of the enforcement guidelines and rules for China's AML with respect to IPRs contain provisions extending the essential facilities doctrine to IPRs. It is unclear, however, whether China's antitrust community properly understands and applies Western antitrust/intellectual property concepts like the "essential facilities doctrine." Recently, FTC Commissioner Ohlhausen pointed out that some in China misunderstand the essential facilities doctrine in the United States and its use in a recent FTC decision, and, as a result, have suggested a wide application of compulsory licensing as an antitrust remedy. 3 This Article argues that applying the essential facilities doctrine to IPRs in China would have a significant chilling impact on innovation and harm consumers in the long run. The essential facilities doctrine has its roots in decisions issued by the U.S. Supreme Court more than one hundred years ago. 4 Through extensive debate in case law and through the development of modern economic theories, U.S. legal and economic scholars have since largely rejected this doctrine. 5