As an incentive to innovation, intellectual property (IP) should be protected by law. However, as it is a key factor in market competition, it should also be subject to competition law. In most jurisdictions, restriction of competition related to IP rights is not a black and white question, and such rights are challenged only when the IP owners hold market power and when protection of their rights has a serious and unreasonable effect on competition. In assessing IP-related restriction of competition, we need to analyze several elements: we have to define the relevant markets, identify the parties concerned, determine their market share, assess the anti-competitive effects of the controls, etc.. China's existing legislation is not adequate to solve problems arising from IP-related restriction of competition. Nevertheless, the process of China's legislation on this issue shows clearly that the misuse of IP rights for the purpose of excluding or signifi cantly restricting competition is not justifi able under competition law.