WTO Sides with EU Faults China on IP Dispute in Landmark Ruling

In an April 2025 ruling, a WTO panel dismissed most of the EU’s claims, stating there was insufficient evidence to establish that China’s judicial actions constituted a breach of WTO rules. However, the panel did find that China failed to meet transparency obligations under TRIPS, providing the EU with only a partial victory.

Unwilling to let the matter rest, the EU filed an appeal under the WTO's Multi-Party Interim Appeal Arbitration Arrangement (MPIA)—a temporary mechanism created by several WTO members to bypass the current dysfunction of the official Appellate Body. The MPIA serves as a stand-in dispute resolution tool for WTO members committed to maintaining a functioning appellate system.

On July 21, 2025, the MPIA arbitration panel overturned several findings of the original decision. Most significantly, it concluded that China's courts had indeed violated TRIPS by issuing anti-suit injunctions that interfered with the legal rights of EU patent holders. The panel agreed with the EU that such judicial measures effectively stripped European companies of their ability to seek justice in foreign jurisdictions and deterred legitimate enforcement of IP rights.

The WTO’s ruling mandates that China take corrective measures within 90 days to align its practices with its international obligations. This may include revising the judicial policies or procedural rules that enable Chinese courts to impose such sweeping injunctions.

Legal experts and international trade analysts have hailed the ruling as a major win for global IP enforcement and a sign of the WTO’s continuing relevance in mediating complex trade and legal disputes. The decision is expected to have a ripple effect beyond EU-China relations, sending a clear signal to other nations about the limitations of domestic judicial interference in transnational IP litigation.