POLICY INSIGHT

Much Ado About Nothing? EU’s WTO Complaints Against China Have Distracted from Useful Dialogue on the Enforcement of IP Rights.

Weinian Hu

Abstract

In December 2022, the EU lodged a complaint against China with the WTO regarding the power of Chinese courts to issue worldwide and prospective anti-suit injunctions (ASIs) that extend beyond its jurisdiction. As a result, standard essential patents (SEP) holders may be prohibited from asserting their patent rights protected by the TRIPS Agreement in non-Chinese jurisdictions. Such ASIs may not be limited to the specific scope, conditions or circumstances related to the concrete cases before a Chinese court, either. The EU substantiated its allegation by taking the examples of ASI orders granted in 2020 by various Chinese courts in four licensing disputes related to SEPs. In the same context, the EU complained that China has not applied and administered its laws, regulations and other measures in a uniform, impartial and reasonable manner.

In each of the four licensing disputes mentioned above, an ASI was sought by the complainant in a Chinese court while being sued by the respondent for patent infringement in non-Chinese jurisdictions in parallel proceedings. However, despite the litigation, the parties continued their negotiations. Licensing agreements were reached, and lawsuits were withdrawn, even before the EU submitted its complaint.

The ASIs granted by the Chinese courts are not without controversy, indeed, in relation to their respective scope. Nonetheless, however unjustifiable, they were all neutralised subsequently by the anti-ASIs issued by non-Chinese courts when adjudicating the patent infringement cases in front of them. Thus, although presently there are no international rules that govern ASI application, courts in different jurisdictions are efficient in preserving judicial sovereignty and protecting patent rights. In other words, judges are competent in fixing unjustifiable ASIs.

It is regrettable that the EU and China were not able to resolve their differences on ASIs through dialogue. This is despite the fact that both sides have succeeded in resolving many IPR issues, including IP legislation, in the past two decades thanks to the comprehensive EU-China IPR Dialogue mechanism. With its robust telecoms innovation landscape, China will emerge as a global IP litigation centre, epitomised by ASI litigation. Meanwhile, Chinese jurisprudence will also gradually influence international IP law-making, which should encourage the EU to cooperate more closely with China on IP protection.