Bonadio, Kansara & Tayal on the Eu-China WTO Arbitration Panel Decision

Although I (and others) have blogged about the July 2025 WTO arbitration award finding China’s antisuit injunction policy to be in violation of TRIPS (see, e.g., here, here, and here), this is the first (though I know it will not be the last) full-length article on the arbitration award that has come to my attention:  Enrico Bonadio, Mahak Kansara & Vansh Tayal, Litigating Patent Standards:  the EU-China WTO Dispute on Anti-Suit Injunctions, 47 EIPR __ (forthcoming 2025).  Here is a link to the ssrn version, and here is the abstract:

 

This article examines the WTO dispute between the EU and China concerning Chinese courts' use of anti-suit injunctions (ASIs) in standard-essential patents (SEPs) litigation. The Arbitrators' ruling of 21 July 2025 overturned key Panel findings, holding that China's ASIs policy violates Articles 1.1, 28.1, and 28.2 of the TRIPS Agreement by frustrating foreign patent holders' rights to enforce and license SEPs internationally. Significantly, the Arbitrators articulated a new and problematic "anti-frustration" rule, clarifying that measures which systematically undermine substantive IP rights and their cross-border enforcement contravene WTO/TRIPS obligations. The article critically assesses the legal and policy implications of the Arbitrators' interpretations, exploring their impact on global SEPs enforcement and the evolving interface of international IP and the WTO dispute resolution system.

The article does a good job explaining the dispute, and devotes considerable attention to the arbitrators’ conclusion that TRIPS article 1.1 embodies some sort of “anti-frustration” principle, which China’s anti-suit injunction policy breached.  (See Arbitration Award para. 4.74, in which the panel states that the corollary of the obligation set forth in article 1.1 to "give effect to the provisions of th[e] Agreement" in members’ territory “is to do so without frustrating the functioning of the systems of protection and enforcement of IP rights implemented by other Members in their respective territories.”)  Although (for now, at least, and unlike Bonadio et al.) I remain agnostic on whether the arbitrators were correct in inferring some sort of “anti-frustration” principle into article 1.1, I fully agree that the arbitrators articulation of that principle leaves much to be desired.  Taken to its logical conclusion, the anti-frustration principle would not only do away with ASIs altogether (even the more traditional, limited ones that the U.S. and U.K. might occasionally grant), but also would seem to cast many other national practices into doubt—including not only awards of global FRAND royalties as in the U.K. and China, but also the practice of the German courts to routinely grant injunctions in SEP cases (which, as a practical matter, often compel global settlements).  Of course, it would be crazy to say that Germany’s obligation to give effect to the provisions of TRIPS forbids Germany from entering territorially-limited injunctions because doing so frustrates the ability of other member states to adjudicate FRAND disputes pending before their courts, but the fact that the anti-frustration principle would lead to that paradoxical (and clearly wrong) result indicates that there must be something amiss with an unconstrained anti-frustration principle.  Unfortunately, the arbitration panel didn’t spell out the constraints, though as Bonadio et al. suggest, perhaps the other EU-China dispute pending before the WTO (involving China’s willingness to render global FRAND awards) will clarify matters.