Table of Contents
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
Panel Ruling, Appeal and Subsequent Developments
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.
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.
Overview of the World Trade Organization (WTO) Dispute Settlement Mechanism
The WTO dispute settlement mechanism is a multi-stage procedural system for handling trade disputes between Members:
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.
Multi-Party Interim Appeal Arbitration Arrangement (MPIA)
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.
Initial Arbitration Ruling of the World Trade Organization (WTO)
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.
Filing an MPIA Appeal
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.
Recent Follow-up Steps
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).
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.
Subsequent Measures if China Fails to Comply with the Ruling
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.
Current Status of Litigation on Standard-Essential Patents (SEPs) in China: Judicial Evolution from Anti-Suit Injunctions to Independently Determining Global Royalty Rates
Since the EU filed its WTO complaint on 18 February 2022, Chinese courts have not issued any new anti-suit injunctions.
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.
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.
Conclusions and Implications
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.
Key Takeaways
-
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.
-
Patent holders may more freely implement cross-jurisdictional enforcement strategies without fearing obstruction by Chinese anti-suit injunctions.
-
The ruling strengthens the bargaining position of SEP holders in FRAND licensing negotiations with Chinese implementers.
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.
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.
