Recently，China's National Development and Reform Commission (NDRC) announced an suspension of the anti-monopoly investigation against InterDigital Group of Campanies (IDC). It is generally believed in the industry that the case has relationship with the royalty dispute between IDC and Huawei Technologies Co.,Ltd. (Huawei).

IDC and Huawei have been negotiating about royalties of 2G and 3G patents since Sep. 2008, but still not reach to an agreement so far. In July 2011, to force Huawei to accept its offer, IDC filed a patent infringement lawsuit to Delaware District Court, claiming that Huawei and some other companies infringed its 7 patents in 3G wireless devices manufacturing. IDC ask the International Trade Commission (ITC) to launch a "337 investigation" to United States  against those defendants on the same day, requesting IDC to release an Exclusion Order and Cease and Desist Order.    

At the end of 2011, Huawei filed a lawsuit against IDC to Shenzhen Intermediate People's court, claiming reparation of 20 million Yuan. Huawei requested an order from the court based on FRAND rules, to stop IDC's price monopoly, including excessive pricing, discriminatory pricing, implementing tie-in sales, imposing unreasonable trading and refusal to deal.

The court held that, IDC did have excessive pricing and discriminatory pricing in the negotiation about exploiting criterion related patents with Huawei; IDC's using its patents market ascendancy to bundle unessential patents, appeared to be abuse market ascendancy. Based on these facts, the court held that IDC should stop its monopoly infringement and pay a loss of 20 million Yuan to Huawei. The case was affirmed by Guangdong Higher People's Court.

In 2013, NDRC began an anti-monopoly investigation against IDC. The investigation showed that IDC was suspected to abuse its ascendancy in wireless communication standard essential patent market, including setting in unfair high price of royalty to Chinese companies, asking for free licenses from Chinese companies' patents, and bundle unessential patents with essential patents, etc.

According to an official of NDRC, during the anti-monopoly investigation, IDC actively cooperated with the investigation, reached to a settlement with Huawei about royalty and other clauses, and promised to negotiate with other Chinese companies according to the settlement with Huawei. In March 2013, IDC submitted an application to suspend the investigation, promising to implement measures to eliminate its suspected monopoly, including stop setting discriminatory charge to Chinese companies, stop bundling unessential patents with essential patents, stop asking for unreasonable free licenses from Chinese companies' patents, and stop using lawsuit to force Chinese companies to accept its unfair clauses, etc. After thoroughly review, NDRC made the decision to suspend the investigation.

According to the official, NDRC made the decision based on the Anti-monopoly Law of China, Article 45, in consideration that the measures IDC promised to implement could eliminate suspended monopoly, enable Chinese companies practice in fair competition, and restore the order of market competition. NDRC would supervise IDC to keep its promises. If IDC withdraw the promises or else, NDRC will restart the investigation.

(China IP News)