Antitrust Mercantilism: The Strategic Devaluation of Intellectual Property Rights in Wireless Markets


Policy approaches to the enforcement and licensing of standard-essential patents in wireless communications markets reflect the competing interests of entities that specialize in the innovation or implementation segments of the technology supply chain. This same principle can anticipate the policy preferences of national jurisdictions that specialize in the chip-design or device-production segments of the global technology supply chain. Consistent with this principle, legal treatment of the licensing and enforcement of standard-essential patents by courts and regulators in the People’s Republic of China reflects a strategic effort to deploy competition and patent law to reduce input costs for domestic device producers that rely on wireless communications technology held by foreign chip suppliers. This mercantilist use of antitrust law has derived its intellectual foundation from patent holdup and royalty stacking models of market failure adopted by EU and US competition regulators and has borrowed excessive pricing, essential facility, and other doctrines from EU and US competition law, which have then been applied expansively by China’s regulators and courts to weaken intellectual property rights over wireless communications technologies in service of industrial trade and geopolitical policy objectives. These legal actions can in turn distort the pricing of wireless technologies in global supply chains in communications, computing, automotive and other wireless-enabled markets.