On March 13, 2025, the State Council of the People's Republic of China issued the Regulations on the Handling of Foreign-Related Intellectual Property Disputes (hereinafter referred to as "these Regulations"). These Regulations were introduced in the context of the continuous growth of Chinese enterprises’ exports and overseas investments, as well as China's efforts to expand its openness and attract foreign investment.

As the global landscape evolves, Chinese enterprises are encountering an increasing number of intellectual property (IP) disputes when "going global," alongside escalating international trade frictions. These Regulations aim, on one hand, to guide and assist Chinese citizens and enterprises in handling foreign-related IP disputes and, on the other hand, to protect the legitimate interests of foreign enterprises operating in China. They serve as a legal safeguard for the new "dual circulation" development paradigm.

These Regulations will officially take effect on May 1, 2025. In anticipation of their implementation, this article interprets the key highlights of the Regulations and analyzes their potential impact from the perspectives of both Chinese and foreign enterprises.

I. Key Highlights

Clarifying Government Responsibilities

Articles 2 to 6 establish a management system for handling foreign-related IP disputes, characterized by "central interdepartmental coordination + local government collaboration." These articles clarify the leading roles of the State Council’s IP administration and commerce authorities, while also setting up a cross-departmental coordination mechanism. Additionally, local governments at the county level and above, along with relevant departments, are responsible for handling specific disputes.

Building a Government Service System for Intellectual Property

Articles 4 and 5 require the State Council’s IP administration and commerce authorities to establish mechanisms for foreign IP law awareness and risk warnings, providing precise compliance guidance for Chinese citizens and organizations. Article 6 mandates further refinement of IP dispute resolution procedures to offer legal assistance for rights protection.

Establishing a Diversified Dispute Resolution Mechanism

Article 7 innovatively introduces commercial mediation organizations and arbitration institutions into the resolution of foreign-related IP disputes, aligning with the successful practices of institutions such as the Singapore International Mediation Centre (SIMC). Compared to litigation, mediation and arbitration generally involve lower costs and shorter timeframes, saving time and expenses for the parties involved.

Internationalization of Professional Legal Services

Article 8 encourages Chinese legal service providers to "go global" by setting up branches in overseas markets. This facilitates better legal assistance for Chinese citizens and organizations conducting business abroad while enhancing China’s intellectual property image.

Exploring Industry-Based Intellectual Property Support Mechanisms

Article 9 encourages the development of IP-related insurance services and the establishment of mutual assistance funds to reduce the cost of rights protection. Article 10 promotes the creation of foreign-related IP protection platforms by chambers of commerce, industry associations, and cross-border e-commerce platforms. These platforms will offer legal consultation and rights protection strategies, integrate industry resources, foster business exchange, enhance self-regulation, and improve overall industry competitiveness.

Enterprise Compliance Guidance Mechanism

Article 11 requires enterprises to establish an "overseas IP compliance system," which includes strengthening internal policies, appointing dedicated IP compliance officers, and implementing foreign legal risk assessment mechanisms. Additionally, this article mandates that government departments provide foreign-related IP training and legal awareness programs for enterprises. Through a combination of "corporate self-discipline + government guidance," this provision aims to enhance China's IP protection capabilities and support enterprises in navigating global competition.

Ensuring Procedural Justice

Article 12 stipulates that legal documents must be served and evidence must be collected in China in accordance with domestic laws and international treaties to which China is a party. Article 13 requires adherence to legal and administrative regulations when providing evidence or relevant materials abroad. These provisions offer clear compliance guidelines for individuals and organizations involved in IP disputes, ensuring national security, personal information protection, data security, and procedural justice.

Innovating Trade Remedies Mechanisms

Article 14 draws on Articles 28 to 30 of China’s Foreign Trade Law, which contain IP protection provisions. It establishes a rapid response mechanism for imported infringing goods, an anti-monopoly review for IP licensing abuses, and a reciprocity principle for IP protection in international trade. These measures provide clear operational guidelines for enforcement authorities to handle IP-related trade issues effectively. At the same time, enterprises can better understand the IP rules they must follow in foreign trade to minimize legal risks.

Introducing an Intellectual Property Countermeasure Mechanism

Articles 15 and 16 establish a "Foreign Discriminatory IP Measures Countermeasure List," marking China’s first use of the Anti-Foreign Sanctions Law in the IP domain. This mechanism aims to counter foreign unilateral sanctions and safeguard enterprises' legitimate rights and interests.

Intellectual Property Security Review

Article 17 establishes a national security-linked review mechanism for IP matters, authorizing special investigative procedures for IP activities that threaten national security. This provision also clarifies the legal basis for taking action against different behaviors: those endangering China’s sovereignty and security will be addressed under the Foreign Relations Law and the Anti-Foreign Sanctions Law, while cases involving IP abuse that restrict competition or constitute unfair competition will be handled under the Anti-Monopoly Law or the Anti-Unfair Competition Law.

II. Impact on Chinese Enterprises

For Chinese enterprises, these Regulations provide crucial institutional support for international expansion. First, with support from government, social, and industry channels, enterprises can access more comprehensive and timely foreign IP information and risk alerts, helping them plan their IP strategies in advance and avoid potential risks. Second, the diversified dispute resolution mechanism and professional legal service institutions will help enterprises handle foreign-related IP disputes more effectively, reducing resolution difficulty and costs. Furthermore, the introduction of mutual assistance funds and IP-related insurance services offers financial support for IP protection. Finally, when providing evidence to foreign institutions, enterprises must comply with relevant domestic legal procedures.

III. Impact on Foreign Enterprises

Foreign enterprises should pay close attention to the following key provisions of these Regulations:

Article 7: The increased channels for resolving cross-border IP disputes may involve multiple jurisdictions and require resolution through mediation, arbitration institutions, or judicial processes. This makes compliance management more complex, necessitating a deeper understanding of China’s various dispute resolution procedures.

Article 12: Legal documents must be served and evidence must be collected in China in accordance with Chinese law. Foreign enterprises are advised to engage Chinese legal service providers to handle these matters.

Article 14: When entering into IP licensing agreements with Chinese enterprises, foreign companies must negotiate on an equal footing and ensure that licensing agreements reflect genuine mutual consent. It is also important to retain negotiation records to avoid future licensing disputes. Additionally, foreign enterprises should monitor whether their home countries implement discriminatory IP protection measures against Chinese enterprises. They should track China’s countermeasure lists and related policies to adjust their business strategies accordingly, minimizing losses from retaliatory actions.

Articles 15-16: Foreign enterprises must not comply with foreign governments' discriminatory IP restrictions against China. Otherwise, they risk being included in China’s Foreign Discriminatory IP Measures Countermeasure List, which could result in countermeasures such as transaction restrictions, asset freezes in China, entry bans, or lawsuits from Chinese individuals or organizations, potentially leading to significant compensation claims.