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19 September 2006
Beijing DongJin Xinda Technology Co. Ltd (DongJin) v. Intel was heard before the Beijing No.1 Intermediate Court on 28 July 2006.
The case involved a software license which DongJin claimed was void because it was an illegal monopoly of technology under the Contract Law.
While the case cannot be argued under competition law, because the Competition Bill has not yet been passed, it has been referred to as China's first competition case.
Case facts DongJin acquired hardware and software from Intel. The software was subject to a licensing agreement, which specified that DongJin could only use the Intel software in combination with the purchased Intel hardware.
DongJin argued that the license created an illegal monopoly in respect of technology and, as a result, was void under the Contract Law. Section 329 of the Contract Law deems contracts to be void where they illegally monopolise technology and impair technological progress
Intel argued the software was merely an extra, with the principal sale being the hardware. Intel's lawyer, Yu Sheng Shi, noted that this case was a response to the dispute last year in which Intel sued DongJin's parent company, Shenzhen DongJin Telecommunication Tech, for software infringement.
Relevant Supreme People's Court interpretation Paragraph 10 of the Interpretation of the Supreme People’s Court concerning Issues on the Application of Law in Disputes over Technology Contracts identifies which licences create monopolies and are consequently void. That interpretation has been in effect since January 2005 and may have some relevance to this case.
Judicial interpretations issued by the Supreme People's Court (SPC) clarify the law and bind all courts. An SPC interpretation may be provided in response to a specific question asked by a lower court, or it may be provided as a general explanation of the law. Once issued, an SPC interpretation becomes part of China's law
Judgment in the case is pending.
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