The European Union has formally initiated arbitration under Article 25 of the World Trade Organization’s Dispute Settlement Understanding (DSU) in the ongoing intellectual property dispute with China (DS611), concerning Beijing’s enforcement practices in standard-essential patent (SEP) litigation.
The EU’s notice of appeal, circulated to WTO members Thursday, marks the second appeal proceeding conducted under the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), which substitutes the WTO Appellate Body’s functions for participating members.
The arbitration follows a confidential panel report issued to the parties on 21 February 2025, which the EU has now made public by appending it to its Notice of Appeal.
The EU initiated the dispute in February 2022, alleging that China’s courts systematically issued anti-suit injunctions (ASIs) in SEP-related cases to block foreign litigation over patent royalty rates. These ASIs, the EU argued, harmed patent holders’ rights and violated transparency and enforcement obligations under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
The challenged ASIs were issued by Chinese courts between 2020 and 2022 in at least five cases, involving major global firms and technologies essential to 3G, 4G, and 5G telecommunications standards.
The panel found that:
Existence of ASI Policy: The EU successfully demonstrated the existence of an unwritten Chinese policy on ASIs, qualifying as a rule of general application.
TRIPS Consistency: The panel rejected all substantive claims that China’s ASI policy or individual ASI decisions violated TRIPS provisions, including Articles 28 (patent rights), 41 (enforcement), and 44 (injunctions). The panel held that TRIPS Article 1.1 does not create additional obligations beyond requiring members to give effect to TRIPS within domestic systems.
Transparency Breaches: The panel found that China failed to publish a key judicial ASI decision (Xiaomi v. InterDigital), breaching TRIPS Article 63.1. It also concluded that China had not adequately responded to the EU’s information requests under Article 63.3.
China’s Accession Protocol: The EU’s claims that China applied its laws in a non-uniform, partial, or unreasonable manner were dismissed. The panel found no evidence supporting systemic irregularities in the application of ASIs by Chinese courts.
news release and related documents are now on the WTO website: https://www.wto.org/english/news_e/news25_e/disp_24apr25_e.htm
Despite these rejections, the panel concluded that China’s transparency failures constituted a breach of its WTO obligations, resulting in a nullification or impairment of EU rights under TRIPS. It recommended that China bring its measures into conformity with WTO rules.
The Article 25 arbitration process will now proceed according to procedures agreed by China and the EU in July 2023. Arbitrators will be appointed to hear the appeal, and their ruling will be final and binding on both parties under the MPIA framework.
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