The World Trade Organisation Dispute Settlement Body has rejected the EU's claims that Chinese ASIs violate the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS agreement). Anti-suit injunctions (ASIs) are temporary sanctions granted by a court in one country preventing a party from starting or continuing a parallel action in another forum or jurisdiction. In its complaint the EU argued that Chinese courts are deterring European patent holders from bringing actions to enforce their patents in courts outside China through the issuance of ASIs.
Although the final report was not circulated to members by the WTO dispute settlement body panel, the appeal filed by the EU contains details of the decision and thereby made the panel report public. According to the panel, the TRIPS Agreement does not prohibit WTO members from adopting measures that prevent other WTO members from implementing the TRIPS agreement in their own territories. This is the first decision to be made in a series of complaints levied by the EU against Chinese courts, with other complaints focussing on anti-dumping measures and Chinese FRAND determinations. As discussed below, the final determination of these trade-related patent jurisdictional disputes will be significant for those involved in developing and implementing standard-essential technologies.
The Complaint
In its complaint, submitted in February 2022, the Commission argued that Chinese courts, through the issuance of ASIs, are deterring European patent holders from bringing actions in foreign courts to enforce their patents. The Commission believes that those ASIs effectively prevent European rights holders from properly safeguarding their standard-essential patents (SEPs)—patents that underpin technological standards such as 4G or 5G. Further, the Commission contends that China's use of heavy fines (daily charges of upwards of €130,000) against companies that disregard the injunctions exerts unwarranted pressure on European technology developers to accept unfavourable licensing terms. The Commission's position is that, taken together, these measures unlawfully restrict the EU companies' ability to negotiate or litigate on a fair footing.
WTO's findings
In April 2025, the WTO's dispute settlement panel handed down its findings on the matter. While the panel recognised that China has indeed developed an unwritten policy of limiting intellectual property rights by enabling courts to issue ASIs of this nature, it did not find any conclusive violation of the WTO's TRIPS Agreement on the merits of patent rights. Specifically, the panel determined that nothing in the TRIPS agreement expressly forbids a WTO member from adopting measures that may limit the enforcement of patents in other jurisdictions. The result is that, even if the policy impedes European businesses, it is not prohibited under TRIPS.
Nevertheless, the panel did find that China breached its transparency commitments by failing to publish a final judicial decision in a case relating to a Chinese smartphone maker's use of patented wireless technology. This omission means that China has not adhered fully to the requirement that WTO members must publicly disseminate relevant measures affecting trade.
The European Commission has indicated dissatisfaction with the narrower findings regarding intellectual property obligations and has appealed this portion of the panel's decision to the alternative arbitration system.
The Impact
Given the EU's complaint in isolation, you'd be forgiven for thinking that Chinese courts are unfairly wielding their power. However, the Chinese ASIs appear to represent another decision in a jurisdictional arms race between countries wishing to promote their courts as a forum for SEP and FRAND disputes.
The Commission's singling out of China is somewhat questionable, given the similar ASI measures granted by US courts, or the English courts willingness to decide global FRAND licences. On the other hand, the fines levied by Chinese courts are far greater than those implemented in other jurisdictions and the FRAND terms decided by the courts are below (European) market rate. As a result, the Chinese courts are making their bid to be the first port of call for implementors seeking lower licence fees for SEPs. Consequently, there is some bite to the Commission's arguments, even if it is determined that no WTO regulations have been technically violated.
If the EU's appeal were to succeed, the WTO might be prompted to reconsider how its intellectual property rules interact with members' rights to implement policies affecting foreign litigation. However, meaningful consensus on such changes appears unlikely in the near future. In this context, some commentators have argued for the creation of a non-governmental FRAND rate-setting tribunal as a more practical solution to address these issues. Indeed, the UK Supreme Court, in its recent Unwired Planet decision, suggested that a global tribunal could be better suited to resolving SEP disputes than the current approach of country-by-country enforcement. Nevertheless, it is important to recognise that solutions requiring significant international cooperation are likely to be particularly complex and may take considerable time to achieve.
In the meantime, those involved in developing and implementing standard-essential technologies must navigate an international landscape in which multiple courts are vying for jurisdiction. If the Commission's objections lead to reforms or clarifications in WTO rules, there may be wider ramifications for courts outside of China seeking to extend their jurisdiction in SEP matters. It is, undoubtedly, a story that will continue to evolve as further appellate proceedings take shape.
" As to the consistency of the ASI policy with the TRIPS Agreement, the Panel found that the European Union had not demonstrated an inconsistency with: Article 28.1"
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
