WTO Panel on Dispute Settlement released the panel report on case DS611.

On April 24, 2025, the WTO Panel on Dispute Settlement released the panel report on case DS611——China-enforcement of intellectual property rights,which was a ruling on the first round of consultation requests made by the European Union in 2022 regarding the injunction.

Factual background:

If a technical standard requires the use of a patent-protected product or process (i.e. a standard essential patent (SEP)), a producer implementing that standard will need to obtain a licence for its use or risk infringing upon patent owners' rights and the attendant legal consequences of doing so. As part of a SEP holder's patent being included in a standard, the SEP holder typically commits to license the subject matter of the patent to implementers of the standard on fair, reasonable, and non-discriminatory (FRAND) terms. This is known as a FRAND undertaking.

Legal disputes may arise between patent holders and implementers as to whether a particular royalty rate paid by the implementer to the patent holder is FRAND. This may result in domestic litigation in the territories in which the product or process is protected by a patent. As patents are territorial, multiple jurisdictions may be implicated in disputes between parties on the FRAND rate.

Several implementers filed lawsuits in China asking Chinese courts to set the FRAND licensing rate for certain patents required to produce mobile telecommunications products and requesting anti-suit injunctions (ASIs) prohibiting the other party from taking certain legal actions in other jurisdictions. Beginning in August 2020 with a decision from the Supreme People's Court of China (SPC), ASIs were issued in five cases before Chinese courts (and denied in one).

Before the Panel, the European Union challenged the five court decisions granting an ASI, as well as an alleged unwritten ASI policy in SEP litigation. The European Union claimed that China's measures were inconsistent with certain of China's obligations under the TRIPS Agreement and that China failed to comply with the transparency obligations in the TRIPS Agreement. Additionally, the European Union claimed that the five Chinese court decisions granting ASIs were also inconsistent with China's obligation under its Accession Protocol to apply its laws, regulations, and other measures in a uniform, impartial, and reasonable manner.

The Panel's key findings:

With respect to the unwritten ASI policy, the Panel found that (1) it was properly within its terms of reference, and that (2) the European Union had proved its existence. 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, whether or not read in conjunction with Article 1.1, first sentence (concerning certain exclusive rights of patent holders); Article 28.2 read in conjunction with Article 1.1, first sentence (concerning patent holders' right to licence their patents); Article 41.1 (concerning intellectual property enforcement procedures); and Article 44.1, first sentence, read in conjunction with Article 1.1, first sentence (concerning injunctions). In particular, the Panel found that the obligation in Article 1.1, first sentence stating that Members must “give effect” to the provisions of the TRIPS Agreement requires Members to implement the provisions of the TRIPS Agreement within their own domestic legal systems. The Panel concluded that Article 1.1, first sentence contains no additional obligation relating to frustrating the object and purpose of the TRIPS Agreement or other WTO Members' implementation of the TRIPS Agreement.

With respect to the consistency of the five individual Chinese court decisions granting ASIs with the TRIPS Agreement, the European Union had advanced identical claims and arguments as those raised with respect to the ASI policy. The Panel therefore declined to make findings on these claims concerning the five individual decisions, as any findings would be duplicative of the findings on the ASI policy.

With respect to the transparency obligations under the TRIPS Agreement, the Panel found that China had acted inconsistently with the publication obligation in Article 63.1 of the TRIPS Agreement by failing to publish the decision issuing an ASI in Xiaomi v. InterDigital, read together with the reconsideration decision in the same case. The Panel found that China was not prepared to supply information requested by the European Union and had thus acted inconsistently with Article 63.3, first sentence. The Panel found that the European Union's claim with respect to the provision of specific judicial decisions under Article 63.3, second sentence was outside its terms of reference.

Finally, with respect to the European Union's claims that the five ASI decisions by Chinese courts were inconsistent with Section 2(A)(2) of China's Accession Protocol, the Panel found that the European Union had not demonstrated that Chinese courts had applied China's laws, regulations, or other measures in a non-uniform, not impartial, or unreasonable manner.

Original link: REPORT OF THE PANEL