The China Intellectual Property Research Society (中国知识产权研究会) (“CIPRS”), a national-level professional and academic organization that does not itself issue binding law, has released a new policy report titled An Empirical Study of Patent Injunction Rules in Chinese Judicial Practice and Recommendations for Institutional Improvement（《专利禁令规则在中国司法实践中的实证研究及制度完善建议》）(December 2025) (the “Report”).  The Report was authored by CIPRS together with representatives of China’s automotive industry, thereby reflecting both academic and patent implementers’ perspectives.

The Report addresses a familiar problem: automatic patent injunctions can be abused by non-practicing entities, licensors of method patents, and participants in complex technology markets, especially for standard-essential patents (SEPs).

The Report cites U.S. and other foreign experience, including eBay v. MercExchange (2006), and pre-eBay congressional testimony criticizing automatic injunctions in complex technology markets, as well as U.K.,  European practices (Huawei v. ZTE), including German case law.  Chinese cases such as Fujian Jinhua v. Micron, and Wuhan Jingyuan v. Fuji Kasei, are also discussed. The basic lesson that the Report draws from eBay is narrow but clear: a finding of infringement does not, by itself, justify injunctive relief.  Rather than adopting U.S. equitable relief doctrine, the Report reframes the solution to this purported problem in operational terms: if money can adequately solve the problem, do not shut down the product.  In the FRAND context, if monetary compensation (payment of a FRAND licensing fee) is feasible, an injunction should not be granted（原则上，若金钱补偿 [支付 FRAND 许可费] 可行，则不予支持禁令）.  Injunctions would only remain available when a party refuses to pay a court-determined rate or acts in clear bad faith. 

The Report discusses congressional testimony by Prof Mark Lemley and others in  2005 on limiting injunctive relief, but fails to discuss impact of these changes on U.S. patent practice, including more recent hearings and proposed legislation under the Restore Patent Rights Act that would create a rebuttable presumption of entitlement to permanent injunctions after a finding of infringement (S.708, 119^th Cong., 2025-2026 and H.R. 1574).   I was personally asked questions by Congressman Darrell Issa on the impact of declining availability of injunctive relief in the U.S. on the competitiveness of the U.S. legal system in testimony before the House of Representatives IP Subcommittee on December 18, 2024.  I noted that the data suggested that foreigners were awarded injunctive relief more frequently than Chinese entities, and that state-owned entities were awarded less than either group.  Additional data also demonstrated a higher grant rate of injunctive relief in China.  However, automaticity of injunctive relief was only part of the story.  Speed, predictability, and enforceability play important roles.  I stated:

“Focusing only on automaticity of injunctive relief only partially explains the influence of Chinese courts on rightsholders and foreign courts.  Chinese courts also award injunctions on a faster timetable.  Generally, first instance cases in China are decided in six months.  A preliminary injunction can be granted sooner than that. One relatively well-known example:  a Chinese court in Fuzhou, China was the first court to issue a preliminary injunction in a global patent dispute between Apple and Qualcomm. A German court awarded an injunction after the Chinese court.

The efficacy of China’s court-ordered injunctions and damage awards, among other remedies, has been supplemented in recent years through China’s social credit system and the creation of blacklists against companies or individuals that fail to comply with court orders.  An adverse listing on the social credit system can affect the operation of a business and its employees.” [footnotes omitted]

Importantly, the Report also does not consider the impact on overall deterrence of the Chinese courts.  Other factors, including the length of time to a final decision, the level of damages, and the transparency of the legal system, also contribute to a system’s effectiveness and fairness.   For many years, it has appeared to me that the low level of damages was to a degree compensated by the availability of injunctive relief, particularly compared to a post-eBay United States.  In this manner, the Chinese courts appeared to satisfy the TRIPS obligation to have deterrent civil remedies.  This was well-reflected in the translation of the TRIPS Agreement by the late Professor Zheng Chengsi, who differentiated between civil deterrence meaning to stop infringement (遏制), while criminal cases provide social deterrence (威慑).  However, an important limitation on foreigners obtaining civil deterrence in China is that foreign-related cases have occasionally been greatly delayed due to suspensions of mandatory time frames under the Civil Procedure Law when a foreigner is involved.  I discussed this problem in my blog discussion of the Wuhanjingyuan dispute and noted that it constituted a possible TRIPS violation as it unnecessarily discriminated in practice between foreign and Chinese complainants in Chinese courts.

This approach raises an obvious concern about deterrence: if injunctions are constrained and damages remain low, what prevents opportunistic infringement? The Report does not rewrite damages law. Instead, it assumes stronger use of existing tools under Article 71 of the Patent Law to encourage courts to impose more deterrent damages once injunctions are no longer automatic. The text repeatedly assumes that adequate damages or “reasonable” royalties can substitute for injunctions (充分的损害赔偿或合理许可费 ）and that malicious infringement should be subject to stronger regulation（对恶意侵权应强化规制）.   Deterrence is thus shifted from exclusion to financial consequence, with injunctions reserved for non-compliance rather than mere infringement.  However, this forward-looking approach has yet to manifest itself.  China appears to be increasing damages awards in patent cases, including in disputes involving standard-essential patents.  However, limited transparency and delays in the publication of decisions make it difficult to confidently assess these changes. In the past Chinese damages were lower than international norms; in Huawei v. Conversant, for example, a Chinese court reportedly awarded Conversant damages that were less than one eighteenth of those awarded in parallel German proceedings.

These observations also reveal a deeper institutional risk that the Report does not fully confront: transparency. In a system where many cases are not published or have limited binding effect, importing open-ended concepts such as “fair” or “reasonable“ into injunction doctrine invites confusion and abuse. Without systematic publication of judicial decisions, regulated parties cannot see how these standards are applied, and courts enjoy wide discretion with limited external discipline. For example, Civil Code concepts of “fair” and “reasonable” may take the place of identically worded concepts in FRAND as they appear to have been in the Report.  Similar transparency concerns have been raised in the WTO arbitral decision in DS/611, which was based on a complaint brought by the EU against China involving China’s practice of anti-suit injunctions in FRAND litigation, where the complainants also discussed the difficulty faced by affected parties in understanding how such measures are applied in practice.  The Report does not, for example, suggest adoption by China of the eBay four-factor test as one approach to establishing the reasonableness of litigants’ behaviors without undue reliance on judicial discretion.

Another problem with the Report is its frequent use of the term FRAND, usually followed by a Chinese rendering: FRAND (fair, reasonable, and non-discriminatory)（FRAND [公平、合理、无歧视]）. In Chinese drafting, the punctuation separates the terms into a decomposed list, not a single combined obligation. In this decomposition, only one of the three terms actually drives decisions in the Report: “reasonable”（合理 ）.  Across the Report, “reasonable”  appears dozens of times in operative contexts, particularly in discussions of “reasonable” licensing fees（合理许可费 ）and “reasonable” compensation（合理补偿 ）, while “fair”（公平）and “non-discriminatory”（无歧视 ）appear only a handful of times, largely in definitional or background references. FRAND’s “reasonable” test thus becomes a justification for denying injunctions and is disconnected from a composite standard governing licensing conduct.  As proposed, this would function primarily as a way of asking only whether payment is “reasonable,” and not whether it was “fair” or “non-discriminatory.” This misconstruction of FRAND is regrettably consistent with my prior work on the disaggregation of FRAND in Chinese judicial practice.

The Report proposes implementation of its recommendations primarily through a legislative fix or a Supreme People’s Court judicial interpretation.  Compared to China’s anti-suit injunction practice, a decision to proceed through a judicial interpretation would be a nominally better first step, particularly given that China previously implemented anti-suit injunctions in SEP cases without issuing a judicial interpretation and despite concerns that such remedies are not clearly contemplated by China’s Patent Law or Civil Procedure Law.  However, there are numerous other potential drawbacks.   Of particular concern is that the burden disproportionately falls on foreign right holders who suffer from the absence of minimum statutory time frames and already make limited use of the Chinese civil system.  In addition, the use of an exclusive “reasonableness” injunction test appears inconsistent with FRAND contractual obligations. 

The authors also have hardly made the argument why this weakening of China’s automatic injunctive relief in patents should not be extended to other IP rights, or to civil law generally.  Past practice has already shown that intellectual property is often a testing ground in China for broader legal reforms.  A weakened injunction remedy would also hurt China’s emerging role as an IP licensor and as a center for transnational IP litigation. Indeed, without fully considering the impact on the United States of eBay, importing eBay into China easily becomes a classic tale of legal transplants: it is often impossible to conduct a meaningful transplant due to differences in legal culture such as case-based reasoning, common-law traditions, and differences in understanding the meaning of FRAND.