CHINA Trends and Developments Contributed by: Li Ren (Roy), Beijing DHH Law Firm
Article 18 clarifies the allocation of the burden of proof between plaintiffs and defendants in cartel (monopoly agreement) litigation. It innovatively treats market structure, competitive conditions, and market changes as factors that can be alter - natively proven alongside communication or exchange of information, thereby reducing the plaintiff’s burden of proof. New provisions on pharmaceutical patent reverse payment agreements Article 20 of the Interpretation states: “If the plaintiff has evidence proving that an agreement between a generic drug applicant and the pat - ent holder of the original drug meets the follow - ing conditions and claims that the agreement constitutes a monopoly agreement prohibited by Article 17 of the Anti-Monopoly Law, the Peo - ple’s Court may support such claim. The patent holder of the original drug provides or promises to provide the generic drug appli - cant with clearly unreasonable monetary or other forms of compensation. The generic drug applicant agrees not to chal - lenge the validity of the patent or delays entry into the relevant market [of] the original drug. If the defendant provides evidence proving that the compensation mentioned in the preceding paragraph is solely intended to cover the costs of resolving patent-related disputes or has other legitimate reasons, or that the agreement com - plies with Article 20 of the Anti-Monopoly Law, and claims that it does not constitute a monopo - ly agreement prohibited by Article 17 of the Anti- Monopoly Law, the People’s Court shall support such claim.” Article 20 of the Interpretation focuses on the typical forms of pharmaceutical reverse payment
agreements that have the effect of excluding or restricting competition. It specifies the criteria for determining whether such agreements con - stitute monopoly agreements prohibited by the Anti-Monopoly Law, namely providing or promis - ing unreasonable compensation to the generic drug applicant and the latter’s agreement not to challenge the patent’s validity or to delay market entry. Further clarification of the scope of “substantial assistance” Article 26 of the Interpretation states: “Substan- tial assistance, as referred to in the preceding paragraph, includes acts that directly and sig- nificantly facilitate the conclusion or implementa - tion of a monopoly agreement, such as inducing unlawful intent, providing conveniences, acting as an information channel, or assisting in enforc- ing penalties.” Article 19 of the Anti-Monopoly Law stipulates that “undertakings shall not organise other undertakings to reach a monopoly agreement or provide substantial assistance to other undertak- ings in reaching a monopoly agreement” . How - ever, the scope of “substantial assistance” was not previously clarified. Article 26 of the Interpre - tation further defines this term, providing clearer guidance for judicial practice. Cartel enforcement Overview of administrative enforcement In 2024, China’s antitrust enforcement was rela - tively lenient, with a decrease in the number of cartel-related administrative penalty cases com - pared to 2023. A total of nine cartel cases were penalised (as of 31 December 2024), as sum- marised in the linked table . Remarks:
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