Terry Lu

New rules on administrative protection of trade secrets: interpretation of the Regulation

Mi Li

<h2>This article was first published on IAM. Please contact us for any reprint.</h2>
Patent specifications and drawings are important carriers of technical information. Once they are published by the China National Intellectual Property Administration (CNIPA), they become publicly available knowledge resources. With the rapid development of generative artificial intelligence, a key question has emerged: May published patent specifications and drawings be used as training data for AI models? In China, what legal and compliance risks would such use entail?
&nbsp;
<h2>The copyright nature of patent specifications and drawings and the requirements for publication</h2>
According to the Copyright Law, a work must possess originality and be expressed in a tangible form. Although the drafting of patent specifications and drawings is subject to formal requirements under the Patent Law and they must be examined by the patent administrative authority and published by way of announcement, in essence they are not administrative documents but technical literature created by the applicant. As long as they meet the constitutive elements of a work, they should be protected by the Copyright Law.
There remains room for creativity in the wording, sentence arrangement and design of drawings in patent specifications and drawings, which can reflect the author’s individualized choices and the “beauty of science”. Therefore, patent specifications and drawings that meet the minimum standard of creativity may well constitute works within the meaning of the Copyright Law.
Judicial practice has already provided clear recognition in this regard. For example, in (2021) Jing 73 Min Zhong No. 4384, the Beijing Intellectual Property Court held that patent specifications and drawings do not fall within the category of administrative documents, and that examination and publication by the national patent administrative authority do not alter their nature. The court found that the drawings in the specification demonstrate originality in their structural arrangement and choice of lines and should be protected as graphic works. Similarly, in (2022) Shan Zhi Min Zhong No. 112, the Shaanxi High People’s Court emphasized that the patent specification possesses originality in the expression of the technical solution, the choice of wording and the arrangement of sentences, and constitutes a literary work; its copyright nature cannot be denied on the ground of formal requirements.
These cases indicate that courts generally recognize that patent specifications and drawings should be protected by copyright when they satisfy the requirement of originality, rather than being regarded merely as technical literature. However, the purpose of publishing patent specifications and drawings is to disseminate technical knowledge, and this function naturally limits the exercise of copyright. The acts of the national patent administrative authority in the course of examination and publication, as well as those of the public in reproducing and disseminating these documents to obtain technical information, are generally regarded as reasonable conduct, provided that they do not affect the normal exploitation of the works by the copyright holder or cause unreasonable prejudice. The academic community has also pointed out that the technical disclosure nature of patent specifications and drawings determines that the scope of their copyright protection should be appropriately narrowed so as to avoid impeding the circulation and utilization of knowledge.
&nbsp;
<h2>Legal risks and compliance framework for AI training</h2>
In the development of artificial intelligence, the lawfulness of training data has always been one of the core issues. Including published patent specifications and drawings in training data reflects the reuse of technical resources, but also raises complex considerations under the Copyright Law. Where patent specifications and drawings possess originality and are thus protected as works under the Copyright Law, training activities may involve the right of reproduction or the right of communication through information networks, thereby giving rise to potential infringement risks.
How to strike a balance between copyright protection and technological innovation remains a challenge jointly faced by the judiciary and policymakers. The “three-step test” established under China’s Copyright Law requires that the use must fall within statutory circumstances, must not conflict with the normal exploitation of the work, and must not unreasonably prejudice the legitimate interests of the copyright holder. Whether AI training satisfies this framework has yet to see a uniform conclusion. Although the training process is essentially an analytical use of works rather than a direct substitute for the originals, the delineation of “normal exploitation” and “unreasonable prejudice” still requires further clarification by the judiciary.
In judicial practice, the Shanghai Intellectual Property Court, in the 2023 LoRA/Altman case, introduced the concept of “analytical use”, holding that the purpose of generative AI training is to analyze the ideological elements and patterns of expression of works rather than to reproduce the originals, and that such use may therefore be recognized as fair use. However, the court also stressed that AI service providers must take measures to prevent users from generating infringing content, and that fair use does not equate to exemption from liability. This judicial practice provides an important reference for AI training, while also highlighting the responsibility requirements under the compliance framework.
Meanwhile, policy-level regulations are being continuously refined. The Interim Measures for the Administration of Generative Artificial Intelligence Services explicitly require AI service providers to use training data from lawful sources during the training process, to respect intellectual property rights, to enhance the authenticity and diversity of data, and to establish transparent mechanisms to prevent the generation of infringing content. These provisions not only provide enterprises with a compliance framework, but also mean that even if judicial practice adopts a tolerant attitude toward training activities, enterprises must still assume compliance responsibilities at the institutional level.
In industry practice, some developers of AI patent tools have indicated that their products are based on large models (such as those of Google and OpenAI), and that their training data cover a large amount of publicly available information. Whether patent specifications and drawings are included often depends on data collection strategies and copyright compliance measures. This shows that while industry practice is exploring technological possibilities, it is also continuously adjusting compliance pathways. Although copyright risks cannot be completely eliminated, if the use is limited to internal analysis and model optimization, and does not affect the normal exploitation of patent specifications and drawings or cause unreasonable prejudice to the rights holders, it may meet the requirements of fair use. To this end, enterprises should adopt multiple measures in practice: retain records of the sources of training data and compliance, establish internal review mechanisms, and clearly define the scope of data use and allocation of responsibilities in cooperation agreements.
&nbsp;
<h2>Conclusion and international comparison</h2>
Published patent specifications and drawings provide an important data resource for the development of artificial intelligence. In China, their use for AI training lies at the intersection of the Copyright Law, the doctrine of fair use, and emerging regulatory requirements. Future developments may lie in, on the one hand, gradually clarifying the boundaries of fair use through judicial precedents, and on the other hand, establishing an operable compliance framework through policies and industry norms, thereby promoting innovation while maintaining the order of intellectual property protection.
In international comparison, the U.S. Copyright Office’s third policy report on artificial intelligence, issued in May 2025, focuses on the training of generative AI models. The United States relies on the doctrine of “fair use”, and courts, in multiple cases involving search engines and data mining, tend to find that analytical use rather than substitutive use may constitute fair use.
The European Union, through the Copyright Directive (2019/790/EU), has established a “text and data mining exception”, allowing research institutions and certain commercial entities to use protected works under specific conditions, while granting rights holders the option of “reservation of rights” to exclude their works from being used for data mining or AI training.
This institutional divergence indicates that, in its future institutional design, China may draw on the case-law approach of the United States as well as the legislative model of the European Union, and, in light of its own needs for intellectual property protection and industrial development, explore an appropriate balancing mechanism.
&nbsp;
<h4>[1] https://wenshu.court.gov.cn/</h4>
<h4>[2] https://wenshu.court.gov.cn/</h4>
<h4>[3]https://www.copyright.gov/ai/Copyright-and-Artificial-Intelligence-Part-3-Generative-AI-Training-Re…</h4>
<h4>[4]https://eur-lex.europa.eu/eli/dir/2019/790/oj/eng</h4>
<h4>[5]https://wenshu.court.gov.cn/ https://wenshu.court.gov.cn/</h4>
<h4>[6]https://www.copyright.gov/ai/Copyright-and-Artificial-Intelligence-Part-3-Generative-AI-Training-Re…</h4>
<h4>[7]https://eur-lex.europa.eu/eli/dir/2019/790/oj/eng</h4>

From patent disclosure to AI training: legal challenges and institutional responses

Landy Jiang

Eddie Wang

<h2 style="text-align: left;">Table of Contents</h2>
I. Panel Ruling, Appeal and Subsequent Developments
II. Overview of the World Trade Organization (WTO) Dispute Settlement Mechanism
III. Multi-Party Interim Appeal Arbitration Arrangement (MPIA)
IV. Initial Arbitration Ruling of the World Trade Organization (WTO)
V. Filing an MPIA Appeal
VI. Recent Follow-up Steps
VII. Subsequent Measures if China Fails to Comply with the Ruling
VIII. Current Status of Litigation on Standard-Essential Patents (SEPs) in China: Judicial Evolution from Anti-Suit Injunctions to Independently Determining Global Royalty Rates
IX. Conclusions and Implications
&nbsp;
<h2 style="text-align: left;">Panel Ruling, Appeal and Subsequent Developments</h2>
Executive Summary
In July 2025, the appellate arbitration tribunal of the World Trade Organization (WTO) ruled that China’s practice of issuing anti-suit injunctions (ASIs) in standard-essential patent (SEP) cases violates its obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The ruling found that China’s anti-suit injunction policy restricts the rights of SEP holders to enforce their patents and conduct licensing negotiations on a global basis, fundamentally altering their bargaining position. The tribunal overturned the previous findings of the panel and required China to bring its relevant judicial practices into conformity with WTO rules within 90 days. This ruling marks a major victory for European patent holders, reaffirms their ability to protect intellectual property across jurisdictions, and demonstrates that the WTO continues to play a role in resolving global intellectual property disputes even during the paralysis of its Appellate Body.
&nbsp;
Background
WTO dispute case DS611 originated in 2022, when the European Union challenged China’s practice of issuing anti-suit injunctions (ASIs) in SEP cases. The EU argued that these anti-suit injunctions restricted the rights of EU SEP holders to enforce their patents and conduct licensing negotiations outside China, and that this practice violated TRIPS by weakening the protection of patent holders’ rights at the international level. Although the initial ruling of the WTO panel was mixed, the case subsequently entered the appeal stage under the Multi-Party Interim Appeal Arbitration Arrangement (MPIA). It should be specifically noted that the panel’s initial ruling in fact supported China’s position, finding that China’s anti-suit injunction policy did not violate international trade rules.
&nbsp;
<h2 style="text-align: left;">Overview of the World Trade Organization (WTO) Dispute Settlement Mechanism</h2>
The WTO dispute settlement mechanism is a multi-stage procedural system for handling trade disputes between Members:
&nbsp;
Consultation Stage: The complaining party shall request consultations with the respondent, seeking to reach an amicable solution within 60 days.
Panel Stage: If consultations fail, a panel shall be established to examine the dispute. The panel shall hold hearings and ultimately submit a report containing findings of fact and recommendations.
Appeal Stage: The parties may appeal the panel’s legal findings to the WTO Appellate Body within 60 to 90 days. The rulings of the Appellate Body are final and binding.
Implementation Stage: The losing party must comply with the ruling or agree on a compensation arrangement. If it fails to do so, the prevailing party may request authorization to impose trade sanctions.
Special Note: As the WTO Appellate Body is currently non-functional, some Members have adopted the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary appeal mechanism to ensure the continuity of the dispute settlement process.
&nbsp;
<h2 style="text-align: left;">Multi-Party Interim Appeal Arbitration Arrangement (MPIA)</h2>
Since 2019, due to the United States’ continued obstruction of the appointment of Appellate Body members, the WTO Appellate Body has been unable to function properly, resulting in appeals being indefinitely stalled and weakening the dispute settlement mechanism.
In response, a number of WTO Members, including the European Union and China, jointly established the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary appeal mechanism to ensure the continued operation of rules-based dispute settlement procedures.
China agreed to use the MPIA procedure in the DS611 case, reflecting its strategic consideration of maintaining stable trade relations with the EU, a consideration that is to some extent influenced by the ongoing China–US trade war.
&nbsp;
<h2 style="text-align: left;">Initial Arbitration Ruling of the World Trade Organization (WTO)</h2>
Background
In August 2020, the Supreme People’s Court of China ruled that Chinese courts may issue anti-suit injunctions (ASIs) to prohibit patent holders from bringing patent actions before non-Chinese courts.
Overview of the Dispute
On 18 February 2022, the European Union initiated WTO dispute settlement proceedings, alleging that China restricted EU companies from seeking patent judicial protection before foreign courts.
Core Issues in Dispute
The dispute in this case focuses on standard-essential patents (SEPs), namely patents that are indispensable for implementing specific industry standards (such as in the field of mobile communications). The EU argued that anti-suit injunctions (ASIs) issued by Chinese courts impeded EU companies from legitimately exercising their SEP rights.
The EU alleged that these measures violated multiple provisions of TRIPS.
Initial Ruling
The WTO panel’s initial ruling supported China’s position and found that the anti-suit injunction policy did not violate international trade rules.
&nbsp;
<h2 style="text-align: left;">Filing an MPIA Appeal</h2>
Time and Background of the Ruling
On 21 July 2025, the MPIA arbitration tribunal issued its ruling. This ruling constitutes the second appeal arbitration case conducted under the MPIA framework in which both China and the EU are participating parties.
Core Findings
According to the ruling of the WTO appellate arbitration tribunal in the EU–China intellectual property enforcement dispute (DS611), China must adjust its anti-suit injunction policy.
Arbitral Decision
The MPIA arbitration tribunal overturned the original panel ruling that had been favorable to China. The tribunal found that China’s anti-suit injunction policy restricted SEP holders from exercising their intellectual property rights before foreign courts, in violation of relevant provisions of TRIPS.
Procedural Background
As the WTO Appellate Body is currently non-functional, the EU and China, pursuant to Article 25 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), jointly agreed to resort to arbitration under the MPIA arrangement in this case.
Significance of the Case
The ruling marks a major victory for the EU and requires China to adjust its policy measures that hinder foreign patent holders from seeking judicial patent protection outside the Chinese jurisdiction.
&nbsp;
<h2 style="text-align: left;">Recent Follow-up Steps</h2>
Implementation Period
China must revise its anti-suit injunction policy. China is required to consult with the EU to determine a “reasonable period of time” for implementation, or have a specific time limit determined by arbitration. By reference to China’s past WTO dispute cases, such implementation periods are typically between 8 and 15 months (see other WTO cases involving China).
&nbsp;
Compliance Review
The EU will monitor whether China actually revises its anti-suit injunction policy within the agreed time limit to ensure compliance with the MPIA ruling.
&nbsp;
<h2 style="text-align: left;">Subsequent Measures if China Fails to Comply with the Ruling</h2>
Compliance Review Procedure: If China fails to complete the policy revisions within the reasonable period of time, the EU may request the establishment of a compliance panel to determine whether China’s measures are consistent with WTO rules.
Authorization of Trade Retaliation: If China fails to comply with the ruling, the EU may seek authorization to implement equivalent trade countermeasures (such as increasing tariffs on Chinese goods), with an intensity commensurate with the trade losses caused by China’s anti-suit injunction policy.
Given that the MPIA ruling was issued on 21 July 2025, the parties should currently be in the stage of agreeing on a reasonable period of time for implementation. Available information has not yet indicated any subsequent developments after the ruling concerning China’s response measures or implementation timetable in this case.
&nbsp;
<h2 style="text-align: left;">Current Status of Litigation on Standard-Essential Patents (SEPs) in China: Judicial Evolution from Anti-Suit Injunctions to Independently Determining Global Royalty Rates</h2>
Since the EU filed its WTO complaint on 18 February 2022, Chinese courts have not issued any new anti-suit injunctions.
&nbsp;
Historical Practice (Before 2022)
Chinese courts had used anti-suit injunctions as a strategic tool to consolidate their judicial authority in setting global FRAND royalty rates. Such anti-suit injunctions created jurisdictional barriers, preventing patent holders from pursuing parallel litigation before foreign courts. Such parallel proceedings could challenge or undermine the authority of Chinese courts in determining global licensing terms.
&nbsp;
Post-WTO Complaint Period (2022 to Present)
Since the EU initiated the WTO complaint in 2022, Chinese courts have significantly adjusted their judicial strategy. Without relying on traditional anti-suit injunctions, Chinese courts have continued to exercise jurisdiction to determine global royalty rates, which marks a more institutionally confident approach in handling international SEP disputes.
Evidence currently observed indicates that, although Chinese courts continue to advance the practice of determining global licensing rates, they have shown clear restraint in issuing anti-suit injunctions since the initiation of the WTO complaint.
&nbsp;
<h2 style="text-align: left;">Conclusions and Implications</h2>
The MPIA arbitral ruling in case DS611 is an important milestone in international enforcement of intellectual property rights and presents key opportunities and considerations for patent holders, particularly enterprises holding SEP portfolios.
&nbsp;
Key Takeaways
<ul class="list-paddingleft-2">
<li>
The ruling reaffirms that the WTO dispute settlement mechanism remains an effective tool for addressing restrictions on cross-border enforcement of intellectual property rights, even during the paralysis of the Appellate Body.
</li>
<li>
Patent holders may more freely implement cross-jurisdictional enforcement strategies without fearing obstruction by Chinese anti-suit injunctions.
</li>
<li>
The ruling strengthens the bargaining position of SEP holders in FRAND licensing negotiations with Chinese implementers.
</li>
</ul>
&nbsp;
Strategic Considerations: Although Chinese courts have in practice ceased issuing anti-suit injunctions since 2022, clients should continue to closely monitor China’s formal implementation of the MPIA ruling and any resulting changes in judicial practice. The continued evolution of Chinese courts toward independently determining global royalty rates indicates that SEP disputes will remain complex and that jurisdictional strategies must be formulated with caution.
&nbsp;
Forward-Looking Outlook: Enterprises holding significant SEP portfolios should reassess their global enforcement strategies in light of this ruling. The ruling may also influence how other jurisdictions approach anti-suit injunctions and cross-border patent disputes. We will continue to track developments in China’s implementation timetable and subsequent compliance measures.

China’s SEP practice faces challenges under WTO rules

Sophia Hou

<h2 style="text-align: left;">What is Patent administrative protection? Why is it important?</h2>
Patent administrative protection serves as a vital mechanism for safeguarding patent rights through administrative enforcement channels. Organizations like the China National Intellectual Property Administration utilize this system to enable patent owners to swiftly address issues such as infringement and counterfeiting. By leveraging administrative procedures, rights holders can quickly halt unauthorized use of their inventions, making this approach an effective tool for promoting innovation. However, for cases that require compensation or involve complex disputes, a combined strategy of administrative and judicial avenues is often recommended.
&nbsp;
<h2 style="text-align: left;">How Patent Administration Enforcement Service Works</h2>
<h2 style="text-align: left;">Scope of Patent Administrative Protection</h2>
The scope of patent administrative protection encompasses several key areas.
First, patent owners can handle infringement disputes by filing complaints with administrative agencies, requesting that infringers cease their actions. This process allows for a prompt response to unauthorized use of patented inventions.
Additionally, administrative penalties can be imposed on counterfeit behavior, including the production of products counterfeiting a patent (e.g. Labeling the product with a patent number that does not exist,&nbsp; counterfeiting other’s patent number) and false patent labeling. This serves as a deterrent against infringement and ensures that violators face consequences for their actions.
Mediation of patent disputes is another crucial aspect of administrative protection, addressing issues related to patent ownership and licensing agreements. This mediation process helps resolve conflicts amicably and efficiently.
Finally, other administrative measures include customs filing of patent rights for border protection and the protection of intellectual property at exhibitions. These measures are essential for safeguarding patent rights in various contexts and ensuring compliance with patent laws.
&nbsp;
<h2 style="text-align: left;">Process of Administrative Protection (Infringement Disputes Example)</h2>
<ol>
<li> Complaint:The patentee submits a request and relevant evidence (e.g., patent certificate, proof of infringement).</li>
<li> Filing Review:The administrative authority decides within 15 days whether to accept the case.</li>
<li> Investigation and Evidence Collection:Agencies may conduct inspections and inquiries.</li>
<li> Decision Making:If infringement is confirmed, an order to cease the activity may be issued; dissatisfied parties can file an appeal to the upper level administrative authority or file a lawsuit.</li>
<li> Execution:If the infringer refuses compliance, the authority may seek court-enforced action.</li>
</ol>
&nbsp;
<h2 style="text-align: left;">Advantages and limitations</h2>
Benefits
<ul>
<li>High Efficiency:&nbsp;The process is typically faster than judicial litigation, often concluding within 3 months.</li>
<li>Low Cost:&nbsp;No court fees are required, making it accessible for small and medium-sized enterprises and individuals.</li>
<li>Specialized Expertise:&nbsp;Administrative agencies possess specialized knowledge in patent examination , suitable for complex cases.</li>
<li>Proactive Measures:&nbsp;Agencies can investigate counterfeit acts without needing complaints from rights holders.</li>
</ul>
Limitations
<ul>
<li>Compensation Requires Judicial Procedures:&nbsp;Administrative agencies cannot impose a fine as administrative penalty,&nbsp; or &nbsp;rule on compensation to the right owner, necessitating separate civil litigation.</li>
<li>Limited Coercive Power:&nbsp;Enforcement may require court involvement, and some cases could shift to judicial proceedings.</li>
<li>International Differences:&nbsp;Some countries, like the United States, rely primarily on judicial protection and have fewer administrative options.</li>
</ul>
&nbsp;
<h2 style="text-align: left;">Practice in China</h2>
Compared to the international landscape, China has established a robust administrative protection system that forms a “dual track” approach alongside judicial protection. This integrated framework enhances the effectiveness of intellectual property rights enforcement.
The legal basis for this system is grounded in the Patent Law, the Implementing Regulations of Patent Law, and the Administrative Enforcement Measures for Intellectual Property Rights and relevant local laws and regulations. These regulations provide a comprehensive structure for managing patent-related issues and ensuring compliance.
Market supervision bureaus in China regularly publish cases of penalties for counterfeit patents, demonstrating the active enforcement of these laws. Additionally, the system facilitates the rapid removal of infringing products from e-commerce platforms through administrative complaints, allowing for swift action against violations and protecting the interests of patent holders.
&nbsp;
<h2 style="text-align: left;">Conclusion</h2>
In conclusion, patent administrative enforcement in China is essential for protecting IP rights and promoting innovation. The dual-track approach, combining administrative and judicial mechanisms, enhances enforcement effectiveness. Understanding these processes is vital for rights holders.

Navigating patent administrative enforcement in China – Part 1

Jensen Li

Decoding DeepSeek’s patent technology and layout

The trends shaping Chinese pharma patent litigation

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