On March 13, 2025, China’s State Council enacted the “Regulations of the State Council on the Resolving Foreign-Related Intellectual Property Disputes” (National Decree no. 801) 《国务院关于涉外知识产权纠纷处理的规定》 (the “Regulation”).  The Ministry of Justice released an earlier draft for public comment on July 29, 2024.

Many individuals have already commented on the Regulation. Among them, Trivium characterized the new regulations as China “preparing for IP lawfare.”   Michael Ma highlighted Arts. 14, 15, and 17 are the most concerning. Aaron Wininger has translated the whole text and also focused on Arts. 15-17.

This new enactment is literally a “regulation” of the State Council under China’s Law on Legislation.  It, therefore, binds both the administrative agencies under the State Council and the courts and procuracy. One of the overarching issues is what constitutes “foreign-related” IP disputes. In domestic Chinese IP litigation, that question is also not easy to answer.   In an overseas context, the meaning can be ambiguous. For example, does it refer to a Chinese entity involved in litigation, or does it concern an IP right owned by a Chinese entity? Most likely, the drafters wished to keep this key term unclear to afford maximum flexibility.

Articles 1 – 11 focus on how national and local governments will help companies protect their IP rights overseas and help support a variety of educational and outreach efforts.  These provisions build on efforts over the past two decades to construct foreign IP “early warning systems” in China. China had established these systems to assist Chinese companies in addressing foreign-related IP risks. Language regarding early warning systems is found, for example, as early as the 2008 National IP Strategy. I remember visiting these government offices when I served in the US Embassy in Beijing (2004-2008).

The key provisions of the Regulations are in Articles 12 – 17. They potentially indicate a stronger response from China to perceived IP discrimination in the future. These latter articles also did not appear in the Ministry of Justice draft of 2024 of the Regulations. A Chinese comparison of the final text with the draft released by the Ministry of Justice for public comment is available here. 

This is a summary:

Article 12 discusses (non) cooperation with foreign requests to gather evidence or service of process, except in accordance with relevant Chinese law and obligations.

Article 13 discusses obligations to follow Chinese law in responding to foreign court case requests for evidence, including laws regarding technology transfer, government secrecy, data protection, and privacy.

Article 14 authorizes investigations of certain foreign unfair trade practices in IP according to China’s Foreign Trade Law (FTL). These unfair trade practices include “preventing the licensee from questioning the validity of the intellectual property rights in the licensing contract, conducting compulsory package licensing, and stipulating exclusive grant back conditions in the licensing contract, which endangers the fair competition order in foreign trade.”  The Regulations carry forward Article 30 of the FTL, which has similar language.  They also overlap with recent rules and guidance of SAMR on IP and licensing, including licensing of standards-essential patents. However, the SAMR language may present a more “rule of reason” type approach. For example, the 2024 SAMR rule on SEPS appears to state that package licensing “may” result in an abuse of a dominant market position (“通常情况下，在标准必要专利许可时进行一揽子许可，可以降低整体交易成本，提高标准实施效率。但是，标准必要专利权人等经营者可能滥用其市场支配地位，没有正当理由”). These earlier enactments by SAMR and its predecessors present a complex legislative mix that must be reviewed with the Regulations. Significantly, however, the Regulations bind both agencies and courts.

Article 14 also carries foreign Article 29 of the FTL, which authorizes MofCOM to conduct investigations when “imported goods infringe intellectual property rights and impair foreign trade order.” This is China’s “Section 337” authorizing provision. To my knowledge, MofCOM has never conducted a Section 337–type investigation as Chinese Customs and the Courts already had the authority to exclude foreign infringing products from entering China.

Article 15 authorizes actions against foreign countries that use discriminatory procedures involving intellectual property as an “excuse” to “contain or suppress China.”

Article 16 prohibits Chinese organizations and individuals from assisting foreign governments in discriminatory procedures.

 The Regulations contain a rehash of prior practices, laws, and regulations.  Nonetheless, these Articles may have been written in response to concerns regarding the Trump Administration’s stance on IP and potential actions by European courts, the US, and the UK to extend their authority over litigation involving Chinese parties. Over the years, there have been an increasing number of parallel lawsuits, including but not limited to cases involving standards-essential patents and anti-suit injunctions. Micron’s litigation with UMC is an example of a non-SEP litigation involving several jurisdictions and raising concerns over trade secret theft.  There have also been increasing concerns over Chinese companies obtaining patents in defense-oriented technologies.  In my view, however, Chinese companies’ disclosure of defense-oriented technologies through the patent system may also benefit the United States.

Congress has also been considering legislation that targets China’s IP practices. In 2023, Senator Marco Rubio (now Secretary of State) introduced legislation that would have “prohibit[ed] the export to the People’s Republic of China of any national security sensitive technology or intellectual property subject to the jurisdiction of the United States or exported by any person subject to the jurisdiction of the United States.”  Rubio was also placed on China’s sanctions list in 2020. There have also been discussions regarding changes to USPTO procedures that would deny Chinese parties discretionary review of patents under the proposed “PREVAIL ACT.”   A draft of the PREVAIL Act also called out China’s “leveraging and exploiting intellectual property as a critical tool within its national strategies for emerging technologies.” 

The bottom line: we will need to wait and see what next steps the Trump Administration may take on Chinese IP and the role, that the Regulations will play in crafting China’s response to new U.S. policies.