WTO Arbitration Panel Finds China's Antisuit Injunction Policy in Violation of TRIPS

On Monday, the WTO Arbitration Panel reversed the initial decision of the WTO panel, and found that China's antisuit injunction policy violated the TRIPS Agreement.  Here is the arbitration award.  Initial stories are on Law360 (by Dani Kass), Kluwer (by Miquel Montañá) and IPKat (by Daniel Gervais).  I will have more to say after I read the award more carefully.  For now, here is the conclusion:

5.1. In this Award, we have reached the following findings:

a. We uphold the Panel's findings in paragraphs 7.197, 7.205, 7.206, and 8.1 of its Report that the European Union provided sufficient evidence and argumentation to demonstrate the existence of the ASI policy as a rule or norm of general and prospective application.

b. We reverse the Panel's findings in paragraph 7.231 of its Report and find that the corollary of the obligation in Article 1.1, first sentence of the TRIPS Agreement to "give effect" to the provisions of that Agreement in a WTO Member's 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.

c. We reverse the Panel's findings in paragraphs 7.240 to 7.242 and 8.2.a of its Report. In completing the legal analysis, we find that the European Union has demonstrated that the ASI policy is inconsistent with Article 28.1, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement.

d. We reverse the Panel's findings in paragraphs 7.247, 7.248, 7.250-7.252 and 8.2.b of its Report. In completing the legal analysis, we find that the European Union has demonstrated that the ASI policy is inconsistent with Article 28.2, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement.

e. We uphold, albeit for different reasons, the Panel's finding in paragraph 8.2.c of its Report that the European Union has not demonstrated that the ASI policy is inconsistent with Article 44.1, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement.

f. We uphold the Panel's findings in paragraphs 7.309 and 8.2.d of its Report that the obligation in the second sentence of Article 41.1 of the TRIPS Agreement is not applicable to the ASI policy, as the ASI policy is not an enforcement procedure as specified in Part III of that Agreement.

g. We uphold the Panel's findings in paragraphs 7.383, 7.388-7.391, 7.394.b, and 8.4.a of its Report that the decision issuing an ASI in Xiaomi v. InterDigital, read together with the reconsideration decision in the same case, is a judicial decision "of general application" within the meaning of Article 63.1 of the TRIPS Agreement.

5.2. Paragraph 9 of the Agreed Procedures provides that the findings of the Panel that have not been appealed in this Arbitration shall be deemed to form an integral part of this Award together with our own findings, and that the Award shall include recommendations where applicable.

Accordingly, we recommend that China bring into conformity with the TRIPS Agreement those measures found in this Award, and in the Panel Report as modified by this Award, to be inconsistent with this Agreement.