Analysis of the WTO’s Ruling on the China-EU Patent Dispute

The recent WTO arbitration decision on the China-EU dispute over anti-suit injunctions (ASIs) in standard essential patent (SEP) cases has drawn significant attention in international trade and intellectual property circles. This article examines the full trajectory of case DS611, analyzing the arbitration panel’s key determinations, the legal reasoning behind the judgment, and the potential ramifications for China’s patent enforcement system and international IP strategy.

Background of the China-EU Standard Essential Patent Dispute

The WTO case DS611 arose from growing tensions between China and the European Union over how courts handle disputes involving standard essential patents (SEPs). SEPs are patents covering technologies that are necessary for widely used industry standards, such as 5G, Wi-Fi, or Bluetooth. Because everyone needs access to these technologies, patent holders must license them on Fair, Reasonable, and Non-Discriminatory (FRAND) terms. In practice, however, companies often disagree on what counts as “fair and reasonable” which regularly leads to litigation.

A key point of contention has been the use of anti-suit injunctions (ASIs) in China. An ASI is a court order that prevents one party from pursuing or enforcing legal proceedings in another country while the case is being heard domestically. In other words, if a Chinese court issues an ASI, it can stop a European company from suing in Europe (or from enforcing a European judgment) until the Chinese proceedings are finished. To ensure compliance, courts often attach very high daily fines.

Between 2020 and 2022, Chinese courts issued at least five high-profile ASIs in cases involving global technology companies. These injunctions not only blocked parallel foreign litigation but also imposed severe financial penalties—sometimes reaching hundreds of thousands of dollars per day. From the EU’s perspective, this seemed to protect Chinese companies against foreign patent holders.

Concerns grew stronger when the President of China’s Supreme People’s Court publicly called for the development of “an anti-suit injunction system with Chinese characteristics” linking it directly to national interests. The Chinese judiciary also promoted ASI decisions as “model cases” signaling that this was not just isolated case law but part of a broader policy.

As a result, the EU formally brought the matter to the WTO. On 22 February 2022, it requested consultations with China. When talks failed to resolve the issue, the EU moved forward with a request for a WTO panel on 27 December 2022. The panel was established on 27 January 2023, marking the official start of WTO dispute case DS611.

WTO Panel Proceedings and Initial Findings

The WTO panel spent much of 2023 and 2024 considering the EU’s challenge to China’s use of anti-suit injunctions (ASIs). The EU framed its case around three central allegations. First, it argued that the practice conflicted with several provisions of the TRIPS Agreement, since ASIs restricted SEP holders from enforcing their rights abroad. Second, it claimed that China had breached its transparency obligations under TRIPS Article 63 by failing to publish important ASI rulings, most notably the Xiaomi v. InterDigital decision, which introduced new principles on the global effects of ASIs. Finally, the EU contended that China’s approach was inconsistent with its WTO Accession Protocol, which requires members to apply laws and regulations uniformly, impartially, and reasonably.

China defended itself by insisting that ASIs were legitimate procedural instruments available under its civil law, used by judges in specific circumstances rather than applied as part of a blanket policy. Officials stressed that these injunctions only bound the parties before Chinese courts and did not interfere directly with the operation of foreign courts. To support this view, China pointed to the Lenovo v. Nokia case, where a court had declined to grant an ASI, as evidence that there was no systemic bias in favor of such measures.

On 24 April 2025, the panel issued its final report, which delivered a mixed outcome. On one hand, it accepted the EU’s argument that China did maintain an “unwritten” policy of encouraging ASIs in standard-essential patent disputes. The panel reached this conclusion by pointing to the similarities in reasoning, timing, and legal basis across several cases, as well as the repeated use of cumulative daily fines that went beyond earlier practice. On the other hand, the panel largely dismissed the EU’s substantive claims under TRIPS. It ruled that the Agreement does not extend to controlling the extraterritorial effects of injunctions, that patent rights are territorial in nature, and that ASIs do not fall under the enforcement procedures or injunction provisions set out in TRIPS.

The panel did, however, agree with the EU on one important point: transparency. It found that China had violated its obligations by failing to publish the Xiaomi v. InterDigital judgment, which established new principles on the global scope of ASIs. At the same time, the panel rejected the EU’s claims under the Accession Protocol, concluding that there was insufficient evidence to show that China applied ASIs in a systematically biased or unfair manner.

These findings gave partial victories to both sides. While the EU succeeded in demonstrating the existence of a Chinese policy on ASIs and in securing a ruling on transparency, it failed to persuade the panel that such practices violated TRIPS or China’s accession commitments. The outcome set the stage for the EU’s appeal, driven by frustration with what it saw as the panel’s overly narrow reading of TRIPS obligations.

The MPIA Appeal and Arbitration Decision

After the panel’s report, the EU decided to appeal under the Multi-party Interim Appeal Arbitration Arrangement (MPIA), a system created by several WTO members after the Appellate Body became inoperative in 2019. Unlike a full rehearing, the appeal concentrated on legal interpretation rather than factual findings, with the EU arguing that the panel had read the TRIPS provisions too narrowly.

The MPIA arbitration was conducted by a three-member tribunal chaired by Penelope Ridings, with Claudia Orozco and Mateo Diego-Fernández Andrade as co-arbitrators. Hearings took place on 4–5 June 2025, and the case attracted significant international attention: thirteen third parties, including the United States, Japan, and the United Kingdom, intervened, many stressing that the outcome would set an important precedent for global SEP disputes.

On 21 July 2025, the arbitrators delivered their award. Their reasoning gave the EU some important, though not complete, victories. Most notably, they overturned the panel’s restrictive interpretation of TRIPS Article 1.1, holding that while TRIPS does not create a supranational IP enforcement regime, members must implement their obligations in a way that does not undermine other countries’ ability to protect IP within their own territories. This broadened the perceived scope of TRIPS by recognizing cross-border implications.

The tribunal also took a wider view of patent licensing rights, finding that TRIPS safeguards not only the right to hold and enforce patents domestically but also the ability of patent holders to negotiate and conclude licensing contracts. In this light, they accepted that ASIs could interfere with rights TRIPS intends to protect. Furthermore, the arbitrators agreed with the panel that China’s use of ASIs amounted to a coherent policy, rather than merely a collection of isolated judicial decisions, making it subject to WTO scrutiny.

At the same time, the arbitration left in place several findings favorable to China. It confirmed that ASIs did not directly breach the specific TRIPS provisions on patent rights; that China’s practices did not violate its WTO accession commitments; and that the territorial nature of patents under TRIPS remained intact.

The outcome was therefore mixed. China’s Ministry of Commerce publicly welcomed the parts of the ruling that supported its position, while expressing dissatisfaction with what it called an over-expansive reading of TRIPS. The EU, though more restrained in its public reaction, could claim progress: it had secured a broader interpretation of TRIPS and a recognition that China’s ASI practices represented a challengeable policy, even if it had not prevailed on all counts.

Implications and Conclusion

The WTO arbitration decision in DS611 delivers a balanced outcome with consequences both for China and the global IP system. It clarifies how anti-suit injunctions may be used under international trade rules, signaling that Chinese courts will need to exercise greater caution and transparency, particularly when measures have extraterritorial effects. For standard-essential patent licensing, the ruling modestly rebalances negotiations by giving foreign rights holders some additional leverage while leaving intact much of China’s existing practice. At the same time, the case illustrates China’s constructive engagement with the MPIA process and its continued support for multilateral dispute settlement, even amid mixed results. More broadly, the decision underscores how intellectual property law is now central to global technology governance. By upholding claims on both sides, it validates key aspects of China’s enforcement framework while setting boundaries on the cross-border reach of domestic legal tools. As disputes over 5G, IoT, and other advanced technologies expand, the principles established here are likely to influence the evolution of global IP governance for years to come, showing that even in an era of geopolitical tension, institutions like the WTO remain relevant for managing complex international disputes.

The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D’Andrea & Partners and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.