Ketian v Hitachi: China's First Compulsory Licence?

On 23 April 2021, the Ningbo Intermediate People's Court handed down a judgment which found that Hitachi Metals Co. ("Hitachi") violated China's Anti-monopoly Law (AML) by refusing to license its patents related to the production of rare earth magnets. In doing so it applied the "essential facilities" doctrine.

Background

Neodynmium-iron-boron (NdFeB) magnets are commonly used in high-tech industries and high-end consumer electronics, such as wind power generation, electric vehicles and mobile phones. China is the world's top producer of rare earths and NdFeB magnets specifically. Japan-based Hitachi owns over 600 patents worldwide related to the production of sintered NdFeB magnets (i.e. magnets created through a powder metallurgical process, where no additional material is mixed with the NdFeB). The Court found that it had announced the licensing of its patents to more than ten companies worldwide, all before 2013. In 2014, Ningbo Ketian Magnet Co. ("Ketian")