As I noted on this blog a few weeks ago, the European Union has two matters pending before the WTO against China. The first of these, which started with a request for consultations in 2022, argues, among other things, that China's policy regarding antisuit injunctions (ASIs) violates articles 1, 41, and 63 of the TRIPS Agreement. See WT/DS611—China—Enforcement of Intellectual Property Rights. In the second, more recent, matter, the EU principally contends that China’s practices with regard to establishing the terms of global FRAND licenses violates Paris Convention article 4bis, as incorporated under TRIPS article 2.1, as well as TRIPS articles 1, 28, and 63. See WT/DS632-1—China—Measures Concerning Patent Licensing Terms: Request for Consultations by the European Union, Jan. 22, 2025. Anyway, as I noted last month, the panel released to the parties its report in the first case in February, but as of the date of my post the report had not yet been made publicly available; and the parties had agreed to arbitrate the appeal, because there has been no functioning WTO appellate body for at least the last five years.
The report is now publicly available. And as it turns out, both the EU and China are appealing, but the EU lost the principal issue, regarding the legality of China's ASI policy. Here is a link to the EU’s notification of appeal, which appends the Panel Report, and here is China’s notification of appeal. I have not read very much of this material myself yet, though I plan to do so over the next few weeks in between finishing up my book projects; but I thought readers who haven’t seen these yet may as well have a look now, if they wish. And, to bring everyone up to speed, here is the conclusion of the WTO's "Summary of 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.
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