On March 13, 2025, the State Council of the People's Republic of China enacted the "Regulations of the State Council on the Settlement of Foreign-Related Intellectual Property Disputes" (Decree No. 801) (the "Regulations"), which will come into force on May 1, 2025.
Background
In recent years, an increasing number of Chinese enterprises have expanded globally by exporting technologies, services, or goods to foreign markets, competing directly with international rivals. However, many of these enterprises lack accurate and timely information regarding overseas IP protection and are inadequately prepared for IP-related risks in international competition. Their capacity to handle foreign-related IP disputes has become increasingly critical.
Meanwhile, a fair, equitable, and non-discriminatory international environment is becoming increasingly vital for their businesses, particularly in the current climate where some countries are gradually abandoning their long-standing business traditions and restricting Chinese enterprises' development under the pretext of national security or IP protection, among other reasons, due to Chinese enterprises' strong competitiveness. Some countries have even excessively extended their jurisdictions over Chinese enterprises based on tenuous connections.
Against this backdrop, the Regulations were officially promulgated to establish a comprehensive national mechanism for addressing foreign-related IP disputes. This includes assisting Chinese enterprises expanding globally that face or are involved in foreign-related IP disputes, restricting foreign judicial or administrative overreach into China's territory, and providing countermeasures against those who use IP disputes as an excuse to contain and suppress the development of Chinese enterprises.
In supporting globally expanding Chinese enterprises, relevant IP, commerce, administrative, and judicial departments will collect and disseminate foreign IP information, issue IP risk warnings, enhance alternative dispute resolution (ADR) mechanisms for foreign-related IP disputes, and strengthen IP rights enforcement. The promulgation of the Regulations represents a significant step by the state to enhance enterprises' capabilities in protecting IP rights overseas and safeguarding national interests.
Basic Contents
Article 1 of the Regulations clarifies that they aim to strengthen IP protection, encourage individuals and organizations to handle foreign-related IP disputes in accordance with the law, safeguard their lawful rights and interests, promote high-level opening-up, and support high-quality economic development. Undoubtedly, the Regulations do not alter the country's current IP and economic policies.
The main content of the Regulations can be divided into three parts:
1. Articles 4-11 focus on measures (some already implemented) to assist Chinese individuals and enterprises in protecting their rights in foreign-related IP disputes.
2. Articles 12-13 restrict foreign jurisdictions from excessively extending into China's territory.
3. Articles 14-17 provide countermeasures against those who use IP disputes as an excuse to contain and suppress Chinese individuals and enterprises.
Measures to Assist Chinese Individuals and Enterprises
1) Collecting and publishing foreign IP information, improving the public service system for IP information, and providing the public with foreign IP information query services (Article 4).
2) Monitoring key IP information such as changes in foreign IP legal systems, conducting analysis and research on typical IP cases, and issuing early IP risk warnings (Article 5). China began establishing these systems to assist enterprises in addressing foreign-related IP risks as early as 2008.
3) Providing guidance for individuals and organizations on handling foreign-related IP disputes and offering assistance in protecting their rights (Article 6).
4) Encouraging and guiding individuals and organizations to effectively resolve foreign-related IP disputes through ADR methods such as reconciliation, mediation, and arbitration (Article 7).
5) Encouraging IP service providers to enhance their foreign-related IP service capabilities to provide high-quality and efficient services (Article 8).
6) Supporting enterprises in establishing mutual assistance funds for responding to foreign-related IP disputes and encouraging insurance institutions to develop relevant insurance products (Article 9).
7) Encouraging chambers of commerce, industry associations, and cross-border e-commerce platforms to establish foreign-related IP dispute assistance platforms, open service hotlines, and provide public services including consultation and training (Article 10).
8) Conducting publicity campaigns and training programs for enterprises on key aspects of foreign-related IP disputes, and sharing experiences and best practices based on typical cases (Article 11).
Measures Restricting Excessive Foreign Jurisdictions
1) Service of process, investigation, and evidence collection within China's territory at foreign requests must comply with relevant Chinese laws and international obligations; otherwise, such actions shall be deemed invalid (Article 12).
2) Submission of evidence and related materials to foreign countries must comply with Chinese laws, including those concerning state secrets, data protection, privacy, technology transfer, and judicial assistance (Article 13).
Countermeasures Against Abuse of IP Disputes
1) Investigating certain foreign unfair trade practices related to IP under China's Foreign Trade Law (FTL), including importing IP-infringing goods that harm foreign trade orders; preventing licensees from challenging IP validity in licensing contracts; imposing compulsory package licensing or exclusive grant-back conditions that endanger fair trade competition; and providing inadequate national treatment to Chinese entities regarding IP protection (Article 14).
2) Against foreign countries that use IP disputes to contain or suppress China or adopt discriminatory restrictive measures against Chinese entities, the government may include organizations and individuals involved in formulating, deciding, or implementing such discriminatory measures on the countermeasure list and adopt corresponding countermeasures and restrictive actions (Article 15).
3) Chinese organizations and individuals are prohibited from assisting foreign countries in implementing discriminatory restrictive measures under the pretext of IP disputes (Article 16).
4) Relevant State Council departments shall strengthen coordination and cooperation, take corresponding measures under the National Security Law, Foreign Relations Law, Anti-Foreign Sanctions Law, and other laws against the use of IP disputes to endanger China's sovereignty, security, and development interests (Article 17).
Conclusion
The Regulations have enhanced China's response mechanism from three perspectives:
First, through information services, guidance, ADR mechanisms, and industry mutual assistance, enterprises can better respond to foreign-related IP disputes.
Second, they prevent Chinese entities from assisting foreign governments and judicial bodies within China.
Third, they establish, refine, and streamline national-level countermeasures against discriminatory IP-related restrictions imposed by foreign countries.
