EU appeal against WTO panel decision in proceedings against China confirmed, Chinese government responds

Context: 

In January, the European Commission’s (EC) Directorate-General for Trade (DG TRADE) brought a second World Trade Organization (WTO) complaint against China over its standard-essential patent (SEP) case law (January 20, 2025 ip fray article). The first one started with a so-called request for consultations in February 2022 (PDF). Earlier this month, we broke the news that the EC lost the first case (April 10, 2025 ip fray article). The decision was issued in February but the EC had made a request on March 31, 2025 to keep it under wraps with a view to an appeal (PDF).

What’s new: 

The EC yesterday announced that it has filed an appeal against the WTO panel report (April 22, 2025 EU notice of appeal). China’s Ministry of Commerce has already issued a response to the EC’s appeal, noting that it “welcomes” the WTO’s decision but will address the appeal under the framework of the Multi-Party Interim Appeal Arbitration Agreement (MPIA).

Direct impact and wider ramifications: In its panel report, the WTO upheld the EU’s case by acknowledging that China has developed a policy of limiting IP rights, but it has not required China to refrain from adopting measures that undermine other WTO members’ implementation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement in their jurisdictions. The EC’s appeal aims to reverse the panel’s latter findings, meaning it is seeking to allow European companies to defend their IP in European courts. The outcome of this appeal is expected in the latter half of July, 2025.

The EC’s first case, filed in February 2022, alleged China was restricting EU companies from going to a foreign court to protect and use their patents (EC case summary). It claimed that Chinese anti-suit injunctions restrained high-tech patent holders by fining or sanctioning them if they sought to enforce their IP through a non-Chinese court.

As well as acknowledging that China has developed a policy of limiting IP rights, the WTO’s panel decision, handed down on February 21, 2025, upheld the EC’s case by finding China must be more transparent by transmitting to the EU and other WTO members information on IP matters, including court judgments. The WTO noted that the guidelines of the Supreme People’s Court, supported by the political level and implemented by the judiciary through several court judgments, are particularly limiting.

However, the panel found that the TRIPS Agreement does not contain an obligation for WTO members to abstain from adopting measures that prevent other WTO members from implementing them in their own territories. This is the part that the EC is seeking to appeal.

Meanwhile, China’s Ministry of Commerce has already responded:

“China welcomes the WTO panel’s support for its positions in this case. We have received the EU’s appeal request and will address it in accordance with the MPIA rules to safeguard our legitimate rights and interests. Additionally, we emphasize that the MPIA, as an institutional arrangement by WTO members to maintain the functioning of the dispute settlement mechanism, plays a vital role in preserving the stability and predictability of the multilateral trading system. China will work with other MPIA participants to ensure its effective implementation and firmly uphold the rules-based multilateral trade framework.”