On March 13, 2025, a set of regulations on tackling foreign-related intellectual property (“IP”) cases were issued by the State Council (the “New IP Regulations”). The New IP Regulations will take effect on May 1, 2025.
The New IP Regulations include 18 articles, which clarify that relevant government departments should (i) strengthen overseas IP information inquiry and warning services, (ii) offer guidance and IP right protection assistance to individuals and organizations in key areas of foreign-related IP disputes, and (iii) share experiences and practices through typical case studies.
In addition, the New IP Regulations emphasize the role of enterprises, calling for enterprises to (i) enhance their awareness of the rule of law, (ii) establish their internal rules, and (iii) step up efforts on educating IP talent and building the IP talent pool, so as to reinforce their IP application and give stronger protection to their own IP rights.
Furthermore, the New IP Regulations underscore the importance of easy and efficient services in handling such cases, encouraging commercial mediation organizations, arbitration institutions and law firms to join the effort to expand the channels for dispute resolution.
- Background & Purposes
In recent years, China has witnessed a significant surge in foreign-related IP disputes, which also reflects its growing integration into the global economy and the increasing complexity of international trade. According to a 2024 survey by the China Intellectual Property Research Society, by the end of 2023, Chinese enterprises, as the defendant, were involved in 364 overseas IP litigation cases, affecting 2,452 companies. Notably, Guangdong Province led with 896 cases, followed by Zhejiang, Fujian, and Jiangsu, highlighting the challenges faced by China’s most economically active regions. For instance, one of the key trends is the rise of non-practicing entities (NPEs), which have become major plaintiffs in patent infringement cases against Chinese companies. These entities often exploit legal loopholes to file lawsuits, putting pressure on Chinese enterprises to settle out of court.
To address ongoing risks posed by the increasing complexity of international IP litigation like the rise of NPEs, China has taken proactive measures to strengthen its IP protection framework. On July 29, 2024, the Ministry of Justice issued a circular to solicit public opinions on the Provisions of the State Council on the Handling of Foreign-related IP Disputes (Draft for Public Consultation) (the “Draft Version”). The New IP Regulations were finalized upon the Draft Version, regarded as China’s first administrative document that systematically standardizes the handling of foreign-related IP disputes, which reflect China’s continuous efforts in handling foreign-related IP disputes, which will serve as a robust backbone for domestic enterprises going global.
- Main Contents
- Various Parties’ Role & Responsibility
As noted in part 1 of this article, the New IP Regulations focus on specifying the roles and responsibilities of both governmental authorities and private parties such as enterprises and individuals. The details on this front are presented below:
| Parties | Role | Responsibilities |
| IP administrative departments | Coordinate and manage the IP matters nationwide; offer guidance and relevant services to enterprises and citizens involved in foreign-related IP disputes | collect and release information regarding overseas IP legal systems in a timely fashion, improve the public service system for IP information and provide the services of overseas IP information inquiry for the public |
| optimize the services of overseas IP information inquiry by keeping track on changes of foreign IP legal systems as well as conducting analyze and study on typical cases, so as to offer early warning for the public | ||
| streamline the workflow of handling such cases and provide guidance for dispute settlement | ||
| Enterprises, organizations & Individuals | actively or passively involved in foreign-related IP disputes when conducting business overseas | Enterprises: (i) strengthen awareness of rule of law, (ii) set up and improve internal rules and regulations, (iii) strengthen the reserve of IP talent, (iv) intensify the IP protection and application and (v) set up overseas IP dispute funds to protect foreign-related IP rights and reduce enterprises’ costs for maintaining IP rights |
| Other organizations: encouraged to conduct public services like establishing foreign-related IP right protection and assistance platforms and service hotlines and offering consulting and training services | ||
| Enterprises, other organizations and individuals: making efforts to resolve foreign-related IP disputes through expedient and efficient channels like reconciliation, meditation, and arbitration |
- Newly added provisions
As mentioned in part 1 of this article, compared to the Draft Version, several articles in relation to technical issues on handling foreign-related IP cases have been added in the finalized version of the New IP Regulation, details of which are summarized below:
- Service of documents and collection of evidence: pursuant to the New IP Regulation, the service of documents, as well as investigation and evidence collection in China, should be carried out in accordance with (i) the international treaties to which China is a party or has acceded and (ii) the Civil Procedure Law of the PRC and the Law of the PRC on International Judicial Assistance in Criminal Matters.
- Offering evidence/materials to foreign parties: where organizations or individuals in China are (i) engaged in overseas IP-related litigation, or (ii) subject to relevant investigations by foreign judicial or law enforcement authorities, needing to provide evidence or relevant materials to foreign parties, such party shall comply with laws and administrative regulations on the protection of state secrets, data security, personal information protection, technology export control, and judicial assistance. Where an approval from the competent authorities is required by law, the relevant legal procedures shall be followed.
- Investigation by commerce department: The competent commerce department may initiate investigation into and take necessary measures against the following matters: (i) where any import of goods infringes upon IP rights and disrupts the order of foreign trade, (ii) where an IP rights holder prevents the licensee from challenging the validity of the IP right in a license agreement, or imposes mandatory package licensing, or includes an exclusive grant-back clause in the license agreement, thereby disrupting the fair competition order of foreign trade, and/or (iii) where other countries or regions fail to grant national treatment to Chinese citizens or organizations in IP protection, or fail to provide adequate and effective IP protection for goods, technology, or services originating from China.
- Countermeasures against unfair treatment: If any foreign entities fail to grant national treatment to Chinese citizens and organizations or fail to provide adequate and effective IP protection, the commercial departments under the State Council can conduct investigations and take necessary measures in accordance with the relevant laws such as the Law on Foreign Relations of the PRC, the Law of the PRC on Countering Foreign Sanctions and so forth. Also, when foreign countries use IP disputes as a pretext to (i) constrain or suppress China, or (ii) impose discriminatory and restrictive measures on Chinese citizens and organizations, the relevant departments of the State Council can take appropriate countermeasures and restrictive measures in response.
- Discriminatory restrictive measures forbidden: No organization or individual can implement or assist in implementing any discriminatory restrictive measures imposed by foreign countries against Chinese citizens or organizations on the pretext of IP disputes. Where an organization or individual violates the preceding paragraph and infringes upon the legitimate rights and interests of Chinese citizens or organizations, the said Chinese citizens or organizations may file a lawsuit with the people’s court to request cessation of such infringement as well as compensation for losses.
- Other measures for protection of national interests: Relevant governmental departments under the State Council shall (i) strengthen coordination and cooperation, and (ii) take corresponding measures against those who utilize IP disputes to endanger China’s sovereignty, security, or development interests in accordance with relevant laws such as the National Security Law of the PRC, the Law on Foreign Relations of the PRC, the Law of the PRC on Countering Foreign Sanctions and so forth. Any party abusing IP rights to exclude or restrict competition or engage in unfair competition shall be subject to measures in accordance with relevant laws such as the Anti-Monopoly Law of the PRC, the Anti-Unfair Competition Law of the PRC, and so forth.
Based upon the summary above, it is noted that the New IP Regulation will be conducive to safeguarding national security and development interests, particularly reflected by the countermeasures to be taken by relevant governmental authorities when foreign countries use IP disputes as a pretext to constrain or suppress China or impose discriminatory and restrictive measures on Chinese citizens or organizations.
- Prospects & Suggestions
Notably, the Chinese government unveiled the New IP Regulations aiming to handle cases for protection of IP rights related to foreign matters in a move to provide efficient and convenient resolution mechanisms and services for citizens and organizations involved in such disputes. Meanwhile, China is building up its international image and the credibility of its judicial system through dealing with high-profile foreign-related IP cases and by upholding equal protections while hearing foreign-related IP disputes no matter where litigants are from.
As more and more Chinese enterprises are expanding their business abroad, it is critically important to proactively adjust their IP application plans, so as to mitigate potential dispute risks when competing with foreign business partners and reduce losses they may have to suffer from overseas IP disputes. Facing challenges brought by the current global IP landscape and governance, to avoid potential risks posed by foreign-related IP disputes and to further reduce costs associated with cross-border IP rights protection, the domestic enterprises could consider:
- formulate compliance plans in relation to technology exports and cross-border data transfer,
- keep track of local IP laws in real time by directly cooperating with overseas partners or with the assistance from legal expertise,
- put efforts into IP talent education while working with relevant authorities in providing legal training for and introducing IP laws to enterprises going global by sharing experiences and practices through case studies, and
- work with law firms and legal expertise having a deep understanding of the technical background and commercial demands of domestic enterprises as well as capacity of drawing on the resources of overseas cooperation platforms to avoid strategic mistakes caused by cultural or judicial differences.
Looking ahead, while foreign-related IP disputes remain a significant hurdle for Chinese enterprises when they operate business worldwide, the country’s evolving legal and strategic responses are trying to offer a promising path forward. By continuing to enhance its IP protection mechanisms and fostering international cooperation, China is well-positioned to navigate the complexities of the global IP landscape and will continue to secure its place as a leader in innovation and trade. The enterprises, individuals and related organizations, on the one hand, shall pay attention to the updated requirements in newly issued regulations when dealing with foreign-related IP cases. On the other hand, each of them shall keep track of IP regimes and policies in various jurisdictions through information platforms established by relevant governmental authorities and organizations in accordance with the New IP Regulations.
For further information, please contact:
Xiangxiang MA, Partner, Anjie Broad
maxiangxiang@anjielaw.com
Notes:
[1] The full name of the New IP Regulations is the Provisions of the State Council on the Handling of Foreign-related IP Disputes.
[2] See article 2, 4, 5 and 6 of the New IP Regulations.
[3] See article 11 of the New IP Regulations.
[4] See article 7 and 8 of the New IP Regulations.
[5] See China Intellectual Property Society, National Center for Guidance on Overseas Intellectual Property Dispute Resolution: 2024 Investigation of Overseas Intellectual Property Disputes involving Chinese Enterprises, June 2024.
[6] See supra note 5.
[7] See article 4 of the New IP Regulations.
[8] See article 5 of the New IP Regulations.
[9] See article 6 of the New IP Regulations.
[10] See paragraph 1 of article 11 of the New IP Regulations.
[11] See article 9 of the New IP Regulations.
[12] See article 10 of the New IP Regulations.
[13] See article 7 of the New IP Regulations.
[14] See article 12 of the New IP Regulations.
[15] See article 13 of the New IP Regulations.
[16] See article 14 of the New IP Regulations.
[17] See article 15 of the New IP Regulations.
[18] See article 16 of the New IP Regulations.
[19] See article 17 of the New IP Regulations.
