WTO Cracks Down on Chinese IP Evasion
Aug 29, 2025
China recently lost a key tool in its intellectual property evasion playbook, with the World Trade Organization ruling in favor of the EU and finding that China’s efforts to impede legal action against its IP violating firms were against the minimum global IP protection standards set by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Under normal circumstances, the holders of standard essential patents—patents covering technologies necessary to meet technical standards—are committed to follow fair, reasonable, and non-discriminatory (FRAND) standards. Patent holders must offer market-value rates equally to all licensees. For years, China has been notorious for abusing FRAND principles.
Using its domestic courts to block foreign companies from pursuing legal action abroad, China has attempted to force foreign companies to accept unfavorable licensing terms. The inability to sue in foreign courts, combined with the limited effectiveness of China’s own judicial system in handling IP claims, has left many American and European businesses powerless in the face of infringement.
Since 2020, the Chinese government has directed courts to issue anti-suit injunctions (ASI) against foreign firms suing Chinese firms in foreign courts. These injunctions impose steep fines for any foreign company attempting to enforce a court ruling against a Chinese company.
In the same year, Conversant Wireless Licensing—fresh off a lawsuit against Chinese telecom provider Huawei—became the first-ever target of a Chinese ASI. Conversant took Huawei to the U.K. and German courts, alleging that Huawei was violating SEPs necessary for 3G and 4G (LTE) standards. The U.K. high court sided with Conversant, ruling that Huawei had violated several SEPs and that Conversant offered a FRAND-compliant licensing rate.
Only three days after a similar decision in Germany, Huawei successfully applied for an ASI from the Supreme People’s Court of China (SPC), threatening Conversant with a daily fine of $150,000 if they attempted to enforce either ruling. Ultimately, the two companies settled on an undisclosed rate—set by the SPC, but China’s aggressive application of the ASI and disregard for foreign court proceedings set a dangerous precedent of IP violators being protected by Chinese courts.
On February 18, 2022, the EU filed a complaint with the WTO over China’s “restricti[on of] EU companies from going to a foreign court to protect and use their patents.” The EU was initially unsuccessful, with multiple panels finding China was not in violation of TRIPS, but upon appeal, China was found to “unduly restrict the [patent] holder’s rights,” forbidding further abuse of ASIs and limiting China’s future ability to strong-arm American companies.
The ruling is a major step forward for global IP enforcement. China is no longer able to force foreign companies into its opaque, biased court system. Now, American and European businesses will be able to protect their patents at home, safe from Chinese reprisal—leading to stronger enforcement and more competitive global markets.