General Motors settles 98-million-yuan antitrust lawsuit in Shenzhen

General Motors and its affiliates have settled a lawsuit for abuse of market dominance brought by an automotive after-sales service company in Shenzhen, in which the US carmaker was accused of refusing to license its essential technical information on a fair, reasonable and non-discriminatory, or Frand, basis. The plaintiff claimed compensation of 98 million yuan ($14.2 million), MLex has learned.

The settlement came after a petition filed by General Motors challenging the jurisdiction of the Shenzhen Intermediate People's Court to hear the case was rejected by the Guangdong High People's Court last April, it is understood.

In November 2015, Shenzhen Autel Intelligent Technology Co. and its affiliate filed an abuse of market dominance lawsuit at the Shenzhen Intermediate People's Court.

The plaintiffs claimed that General Motors and its three affiliate companies violated the Antimonopoly Law by imposing strict controls on its trading partners in the after-sales market, and refusing to license its essential technical information in the after-sales market for GM autos on a Frand basis.

In order to eliminate competition and reap high, monopoly profits, General Motors and its affiliates required that business partners only trade with its designated operators, the plaintiffs claimed, according to a judgment issued on April 26, 2016.

They argued that General Motors enjoyed market dominance, and their essential technical information in the after-sales market is irreplaceable and essential to other business operators.

The plaintiffs asked the court to order General Motors to cease its anticompetitive practices and support its damage claims, because it was unable to operate in the after-sales market for General Motor vehicles and suffered large losses as a result.

They also asked the court to require General Motors and its affiliates to license essential technical information for auto communications, diagnosis, repairing, auto parts and other relevant products and services for free, or on a Frand basis.

Subsequently, General Motors filed a jurisdictional challenge, arguing that the case should be handled by the Shanghai Intellectual Property Court.

The jurisdictional challenge was dismissed afterwards by the Shenzhen Intermediate Court, because two General Motors affiliates are based in Shenzhen. In addition, the court ruled that the claim for 98 million yuan was in line with case-handling rules.

The US car maker appealed that ruling, and on April 26, the Guangdong High Court confirmed the first-instance ruling.

According to a statement by the Shenzhen Intermediate Court, the case was closed on June 30, which suggests that the settlement was reached prior to that date.

Founded in 2004, Shenzhen Autel Intelligent Technology Co. is one of the leading manufacturers and suppliers of professional diagnostic tools, equipment and accessories in the automotive after-sales market, according to an introduction to the company on its website.

Chinese antitrust law is become an increasingly important weapon for companies looking to slug it out in such disputes, with global patent-heavy firms taking aggressive action in Chinese courtrooms to protect their intellectual property rights.

China's court system has accepted and handled between 70 and 80 standard-essential patent, or SEP, cases in the past few years, Song Jian, the chief judge on the intellectual property rights tribunal at the Jiangsu High People's Court, said in October.

In October 2013, the Guangdong High Court upheld a first-instance decision by the Shenzhen Intermediate People's Court, ruling that InterDigital had abused its market dominance and failed to comply with Frand terms in the licensing of its IP rights.

InterDigital was ordered to pay Huawei 20 million yuan ($3.2 million) in damages, and the court set a royalty rate for InterDigital's SEPs of no more than 0.019 percent of the actual sales price of each Huawei product. The case is currently the subject of a retrial appeal at the Supreme People's Court.