Executive Summary
The World Trade Organisation (WTO) appeal arbitrator ruled in July 2025 that China's use of anti-suit injunctions (ASI) in standard essential patent (SEP) cases violates its obligations under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. The ruling found that China's ASI policy restricts SEP holders' rights to enforce patents and negotiate licenses internationally, fundamentally altering their negotiating position. The arbitrator reversed earlier panel findings, requiring China to revise its judicial practices within 90 days to comply with WTO rules. This decision represents a major win for European patent holders and reaffirms their ability to defend intellectual property rights across jurisdictions, demonstrating the WTO's ongoing role in resolving global IP disputes despite the Appellate Body's dysfunction.
Background
The WTO dispute DS611 began in 2022 after the European Union (EU) challenged China's practice of issuing anti-suit injunctions (ASIs) in SEP cases. These ASIs restricted EU SEP holders from enforcing patents and negotiating licenses outside China, which the EU argued violated the TRIPS Agreement by frustrating patent holders' rights internationally. The initial WTO panel ruling was mixed, but the case was appealed under the Multi-Party Interim Appeal Arbitration (MPIA). The WTO panel initially sided with China, determining that China's ASI policy was not in violation of international trade rules.
Overview of the WTO Dispute Settlement Process
The WTO dispute settlement process is a step-by-step system for resolving trade disputes between member countries:
Consultation: The complaining member requests consultations with the respondent to try to resolve the issue amicably within 60 days.
Panel: If consultations fail, a panel of experts is established to examine the dispute, hold hearings, and issue a report with findings and recommendations.
Appeal: Parties can appeal the panel's legal rulings to the WTO Appellate Body within 60-90 days. The Appellate Body issues a final, binding decision.
Implementation: The losing party must comply or negotiate compensation. If they fail, the winning party can seek permission to impose trade sanctions.
Currently, because the WTO Appellate Body is non-functional, some members use the Multi-Party Interim Appeal Arbitration (MPIA) for appeals as a temporary mechanism to ensure dispute resolution continues.
Multi-Party Interim Appeal Arbitration (MPIA)
The WTO Appellate Body has been non-functional since 2019 due to the U.S. Blocking judicial appointments, causing appeals to stall indefinitely and weakening the dispute system.
In response, several WTO members, including the EU and China, created the Multi-Party Interim Appeal Arbitration (MPIA) as a temporary appellate mechanism to ensure continued, rules-based dispute resolution.
China's agreement to use MPIA in dispute DS611 likely reflects its interest in maintaining stable EU trade relations, promoted in part by the ongoing US-China trade war.
Initial WTO Arbitration
Background
In August 2020, China's Supreme People's Court held that Chinese courts can prohibit patent holders from going to a non-Chinese court to enforce their patents by putting in place an ASI.
The Dispute
The EU filed a dispute settlement case against China at the WTO on February 18, 2022, for restricting EU companies from going to foreign courts to protect and use their patents.
Core Issue
The dispute centred on SEPs - patents necessary for a product or technology to meet specific industry standards, such as those used in mobile communications. The EU argued that China's use of ASIs prevents EU-based companies from properly protecting their SEPs.
The EU claimed these provisions were inconsistent with various provisions under the WTO's Agreement on TRIPS.
Initial Outcome
The WTO panel initially ruled in China's favour, finding the ASI policy did not violate international trade rules.
Appeal to MPIA
Date and Context
MPIA Arbitrators handed down an award on July 21, 2025. This was the second appeal arbitration conducted under the MPIA to which both China and the EU are participants.
Key Finding
China is required to change its ASI policy, according to the WTO appeal arbitrator in the EU's dispute with China on the enforcement of intellectual property rights (DS611).
The Decision
The MPIA arbitrators reversed the initial panel decision that had favoured China. The arbitrators found that China's ASI policy violates the TRIPS Agreement by restricting SEP holders' rights to enforce their intellectual property in foreign courts.
Procedural Background
The EU and China had agreed to Procedures for Arbitration under Article 25 of the DSU in this dispute to give effect to the MPIA Arrangement, as the WTO Appellate Body was not functioning.
Significance
This represents a significant victory for the EU, requiring China to modify its policy that prevented foreign patent holders from pursuing enforcement actions in courts outside China.
Immediate Next Steps
Implementation Period
China is required to change its ASI policy. China will need to negotiate with the EU or have an arbitrator determine a "reasonable period of time" for implementation. Based on previous China disputes, this typically ranges from 8-15 months (as seen in other WTO cases involving China).
Compliance Monitoring
The EU will monitor whether China actually modifies its ASI policy to comply with the MPIA decision within the agreed timeframe.
Potential Further Steps if China Doesn't Comply
Compliance Panel: If China fails to implement the required changes within the reasonable period, the EU can request a compliance panel to determine whether China has properly brought its measures into conformity with WTO rules.
Retaliation Authorization: If China does not comply, the EU can seek authorization to impose retaliatory trade measures (such as increased tariffs on Chinese goods) equivalent to the trade damage caused by China's ASI policy.
Since the MPIA decision was issued on July 21, 2025, the parties are likely to be in the process of determining the reasonable implementation period. The search results don't show any subsequent developments regarding China's response or implementation timeline for this specific dispute.
Current Situation in China SEP Litigation: Chinese Courts' Evolution from ASI-Backed to Standalone Global Rate-Setting
It does not appear that any Chinese courts have issued any ASIs after the filing of the EU WTO complaint on February 18, 2022.
Historical Approach (Pre-2022)
Chinese courts previously used ASIs as a strategic tool to strengthen and protect their global FRAND rate-setting proceedings. The ASIs served as jurisdictional shields, preventing patent holders from simultaneously pursuing litigation in foreign courts that might challenge or undermine the Chinese court's authority to set worldwide licensing terms.
Post-WTO Complaint Shift (2022 onwards)
Following the EU's WTO complaint in February 2022, Chinese courts have demonstrably pivoted their strategy. They now continue to assert and exercise global rate-setting jurisdiction without relying on traditional ASIs, indicating a more confident and institutionalized approach to international SEP disputes.
Anecdotal evidence suggests that Chinese courts have become reluctant to issue ASIs following the WTO complaint, even though their trend toward global rate-setting continues unabated.
Conclusion and Implications for Clients
The MPIA arbitration decision in DS611 marks a significant milestone in international intellectual property enforcement and creates important opportunities and considerations for patent holders, particularly those with SEP portfolios.
Key Takeaways:
Strategic Considerations: While Chinese courts appear to have already moved away from issuing ASIs since 2022, clients should monitor China's formal implementation of the MPIA decision and any potential changes to judicial practices. The continued evolution of Chinese courts toward standalone global rate-setting suggests that SEP disputes will remain complex, requiring careful jurisdictional strategy.
Looking Forward: Companies with significant SEP portfolios should reassess their global enforcement strategies in light of this decision. The ruling may also influence other jurisdictions' approaches to ASIs and cross-border patent disputes. We will continue to monitor developments in China's implementation timeline and any subsequent compliance measures.
Authors: Kin Wah Chow, Landy Jiang, Evi Triana, Eddie Wang, Daniel Markho Santoso, Terry Lu
