China’s Ministry of Commerce said it will carefully evaluate the ruling to address the issue as per WTO rules.
The EU had first brought the case against China at the WTO in 2022, accusing China of blocking European tech companies from using foreign courts to defend their patents. For instance, if a European company believes a Chinese entity is infringing its patent and wants to sue them, a Chinese court could stop them from doing that.
Two different bodies — a panel of WTO experts and an alternate arbitration body — have examined the case since then.
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The latest ruling published by the arbitration body this week reversed the April 2024 ruling that said China did violate the global trade organisation’s rules on intellectual property.
The WTO arbitrators “found that the main measure at issue – which empowered Chinese courts to prohibit patent holders from enforcing their patent rights in jurisdictions outside of China in the context of patent litigation in China – was inconsistent with TRIPS obligations concerning those patent rights,” an official told AFP.
WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) sets minimum standards for IP protection among member states.
The Chinese commerce ministry is contesting this ruling. “The panel wrongly concluded that WTO members should avoid affecting the ability of patent holders to exercise their rights in other members’ territories,” the ministry’s spokesperson said.
The European Commission welcomed the ruling, saying it ensures innovators are properly rewarded for their research and development. “This is an important win for EU-based high-tech companies whose research outcomes were undermined by the Chinese policies in question,” the commission said.
