In the realm of legal remedies, injunctions serve as powerful tools to preserve innovation and creativity. Through its approach to injunctions, China seeks to demonstrate its stated commitment to upholding intellectual property rights and is signifying its broader ambition to assert its influence on the global legal arena by shaping precedents and setting standards in IP governance.
In the realm of legal remedies, injunctions serve as powerful tools to preserve innovation and creativity. Through its approach to injunctions, China seeks to demonstrate its stated commitment to upholding intellectual property rights and is signifying its broader ambition to assert its influence on the global legal arena by shaping precedents and setting standards in IP governance.Preliminary injunctions are essential to maintaining the status quo and preventing irreparable harm to IP-asset owners until the legal dispute is finally resolved through a trial or settlement.
By upholding a lower court’s preliminary injunction against two chipmakers allegedly infringing layout designs of integrated circuits (see here), China’s Supreme People’s Court, the country's highest court, stated that injunctions generally serve as a preemptive mechanism that is more effective in protecting IP rights compared to compensatory measures taken after an infringement has occurred.
The highest court also pointed out that damages, such as losing market share to competitors and experiencing price erosion, were often challenging to fully compensate through mere economic reparations.
Highlighting the urgency of protection, the Suzhou Intermediate Court granted a pre-trial injunction that facilitated German engineering tech firm Robert Bosch in swiftly safeguarding its technical secrets by preventing one of its former employees from disclosing or using the company’s confidential information (see here).
The Chinese supreme court has also sought to avoid unnecessary harm to accused infringers. In a case where Roborock was barred by a lower court from producing and selling robot vacuums purportedly infringing rival Dreame's patented technologies, the top court revoked the pre-trial injunction (see here).
Alongside the imperative need for protection, Chinese courts assess the presence of a solid factual and legal basis underpinning the assertions of IP holders when deliberating on preliminary injunctions. Furthermore, they evaluate the potential impact on public interest and the competing interests of the litigants.
The “four-prong” test is also utilized in deciding whether to grant an anti-suit injunction, or ASI, as the supreme court included these four factors in its judicial rules for injunctions that direct a litigating party to refrain from acting in a certain manner or to take affirmative action.
In contrast to preliminary injunctions, ASIs operate on a broader scale, aiming to address parallel litigation across jurisdictions and mitigate the risks of conflicting judgments. Frequently employed in IP disputes involving standard-essential patents, or SEPs, ASIs have evolved beyond being an instrument solely addressing commercial competition; they have become catalysts for jurisdictional conflicts among nations and have contributed to the escalating tensions in global trade dynamics.
In August 2020, China's top court granted the first groundbreaking ASI in response to a petition from Chinese tech giant Huawei Technologies. The ASI prohibited non-practicing entity Conversant Wireless Licensing, under the sanction of daily penalties, from applying for enforcement of judgments by a German court.
Following the precedent set by the top court, intermediate courts in Shenzhen and Wuhan issued ASIs in multiple SEP-related cases between September and December 2020, including in Xiaomi v InterDigital, ZTE v Conversant, OPPO v Sharp and Samsung v Ericsson.
The series of injunctions prompted the EU to request consultations at the World Trade Organization in February 2022. The EU alleged that China’s judicial practices hindered patent owners from asserting their rights in other jurisdictions by commencing, continuing or enforcing the results of legal proceedings before a non-Chinese court.
In mid-January, the EU filed a new complaint against China at the WTO, aiming to remove what it sees as “unfair and illegal trade practices” by China in the sphere of IP rights (see here).
The EU asserted that Chinese courts setting global SEP royalty rates without the consent of EU patentees had given Chinese market players cheaper access to European technologies unfairly and unduly interfered with the competence of EU courts for European patent issues.
In response, China stressed that channels of dialogue with the EU on IP matters remained open, while reiterating its commitment to safeguarding the country's legitimate rights and interests (see here).
Although facing challenges from other jurisdictions, China has continued to explore the application of injunctions to the SEP field. In a 2021 report on the adjudication of IP cases, the supreme court vowed to improve the use of injunctions in SEP disputes where parallel litigation frequently occurs.
Four years after the country’s first-ever ASI, China’s highest court issued a landmark anti-anti-suit injunction, or AASI, in December 2024 at Huawei’s request. As a counteractive measure, Huawei foiled US router maker Netgear's attempt to seek an ASI or an anti-enforcement injunction in the US or other jurisdictions (see here).
As a crucial legal forum for global SEP disputes, China is seeking to demonstrate its ambition to promote consistency in principles for global IP governance. The initiative comes in light of the nation’s evolution into a global innovative hub, with Chinese tech firm transitioning from implementers to innovators.
China has pledged to enhance the rule of law involving foreign elements, with the aim of protecting the legitimate interests of Chinese businesses operating abroad. This endeavor will also impact foreign enterprises, presenting both challenges and opportunities.
China's stated intention to equally uphold legitimate rights of SEP holders and implementers, regardless of their origin, would mean that foreign SEP owners can also defend their rights in China through injunctions issued by Chinese courts.
The move is expected to attract more innovators to pursue legal action in Chinese courts, aligning with China's ambition to position itself as a premier legal forum for resolving global IP disputes.
- Analysis by Xiaoqiong Gao
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