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Commercially essential patents recognised as essential facility in China

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27 May 2021

On 23 April 2021, the Ningbo Intermediate Court handed down the long-awaited decision in Ningbo Ketian Magnet Co., Ltd. v. Hitachi Metals, Ltd. 
Hitachi Metals holds a significant portfolio of rare earth magnet patents and was accused of abusing its dominant position by refusing to license its patents to a local Chinese company. In a case involving novel antitrust and IP issues, the court agreed with the plaintiff and found that Hitachi Metals’ patents were commercially essential and therefore constituted an “essential facility” within the meaning of antitrust law. The court went on to hold that Hitachi Metals’ refusal to license without objective justification was anti-competitive and ordered damages of RMB4.9 million (approximately USD756,800). Significantly, the court in effect required Hitachi Metals to license its patents to the plaintiff.

This article was first published on IAM.