In recent decades, there has been an increase in the number of anti-suit injunctions issued, particularly by American courts, but now also by Chinese courts, prohibiting other courts, especially German courts, from conducting patent infringement proceedings or enforcing judgments that have been handed down. European courts consider such prohibitions on litigation to be a violation of public policy (ECJ, judgment of September 7, 2023, C-590/23, Charles Taylor v. Starlight Shipping; Higher Regional Court of Düsseldorf, decision of June 17, 2024 – 26 W 7/24, NJOZ 2024, 949). In response, German courts have frequently issued anti-anti-suit injunctions prohibiting the application for such a prohibition on litigation before a foreign court. At the same time, such litigants were considered unwilling to license within the meaning of FRAND case law.
The WTO arbitration proceedings have now confirmed that such anti-suit injunctions constitute a violation of the TRIPS Agreement.
The European Union (EU) accused the People’s Republic of China of violating various provisions of the TRIPS Agreement with its policy of issuing so-called anti-suit injunctions (ASI) in the area of standard essential patents (SEPs).
Procedural path: Originally panel proceedings under the WTO dispute settlement mechanism (DSU). The parties agreed to parallel appeal proceedings under Article 25 DSU within the framework of the MPIA.
The panel found that China’s ASI policy is an unwritten measure of a normative nature, supported by several court decisions and policy statements by the Supreme People’s Courts and the National People’s Congress (NPC).
Through ASIs, Chinese courts can prohibit patent holders from continuing or enforcing proceedings abroad. These orders are enforced with substantial daily cumulative penalties.
Regarding Article 1.1 TRIPS: The arbitral tribunal revised the panel decision and found that WTO members may not take measures that impede the enforcement of IP rights in other member states.
Regarding Article 28.1 TRIPS: The ASI policy violates the TRIPS Agreement because it prevents SEP holders from exercising their exclusive rights in other countries.
Regarding Article 28.2 TRIPS: The arbitration tribunal recognized that the right to conclude license agreements must also be protected across borders.
Other TRIPS articles (44.1, 41.1, 63.1): The arbitral tribunal found violations of transparency obligations (Art. 63.1) and the obligation to provide judicial enforcement options (Art. 44.1, 41.1).
The arbitrators concluded that China’s ASI policy violates the TRIPS Agreement in several respects. China is requested, pursuant to Article 19.1 DSU, to bring its measures into conformity with the TRIPS Agreement.
The decision establishes the inadmissibility of ASIs in international patent disputes and sets a precedent for transnational IP enforcement. Since the US is a founding member of the WTO and therefore also bound by the TRIPS Agreement, it is to be hoped that the decision will not only be heard in China, but will also have an impact on the case law of US courts and that this excessive case law will come to an end.
