Although the law deals primarily with antitrust issues, Article 55 of the new law, due to come into effect on August 1 2008, refers specifically to IP.

According to a translation of the law provided by Lovells, the relevant article says:

"The provisions of this law do not apply to Business Operators exercising their intellectual property rights in accordance with the provisions of relevant laws and administrative regulations relating to intellectual property. However, the provisions of this law are applicable to the case where a Business Operator abuses its intellectual property rights in order to prevent or restrict competition."

Lawyers say that, in theory, this means that a company that has been accused of patent infringement in China could claim that the patent is preventing competition. They could then request the authorities to conduct an anti-monopoly investigation.

"Potentially it gives an infringer the legal right to challenge a patent," said Horace Lam, head of IP in the Beijing office of Lovells.

"We have to wait and see how abuse of IP rights will be defined," said He Fang, a lawyer for Rouse & Co in Beijing. He told MIP Week that implementing regulations will be announced either later this year or at the beginning of next year.

Both the EU Chamber of Commerce and the American Chamber of Commerce have welcomed the new law, but are waiting for further clarification in the implementation.

James Zimmerman, chairman of Am-Cham China said: "We will be observing how the law is put into practice and look forward to continuing to play a supporting role with the new agency as China continues to develop its competition law system."

Neelie Kroes, the EU’s competition commissioner, told journalists in Beijing during a visit on Wednesday that the Commission will closely follow the implementation of the law.