In the historic intersection of globalization reshaping, supply chain restructuring and geopolitical competition that continues to intensify, the growth engine of China's economy is undergoing a profound transformation from simple "commodity export" to higher-dimensional "technology export", "brand overseas" and "standard leadership". According to statistics, my country's total import and export value of goods trade will reach 41.76 trillion yuan in 2023. The "three new categories" of foreign trade represented by new energy vehicles, lithium batteries, and photovoltaic products have gained significant new export advantages through underlying technological innovation 1. However, this climb to the middle and high end of the global value chain has inevitably touched the core interests of the world's existing industry giants, causing intellectual property rights to increasingly become the core focus of competition between multinational companies and the technological game between major powers. 3 Patent, trademark, copyright and trade secret disputes encountered by Chinese companies in overseas markets have shown unprecedented explosive growth in terms of the absolute number of cases, scope of involvement, intensity of confrontation and complexity of rules.
This report is based on the latest publicly available global judicial statistics, landmark cases, and cutting-edge policies and regulations, and systematically conducts an in-depth analysis of the overseas intellectual property risk environment faced by Chinese companies. The report comprehensively discusses the overseas litigation strategies of high-energy industries such as automobiles, photovoltaics, communications and cross-border e-commerce, and deeply analyzes the practical challenges of the US Section 337 investigation, the long-arm jurisdiction mechanism of the European Union Unified Patent Court (UPC), and the cross-border anti-suit injunction conflicts caused by standard essential patents (SEP). Based on this, it builds a comprehensive strategic response model covering the construction of compliance systems, technology export review and global risk warning networks.
1. Macro data perspective: Evolution map and deep characteristics of overseas intellectual property disputes of Chinese enterprises
Against the background of rising trade protectionism, Chinese companies are facing increasing risks and challenges in overseas intellectual property rights. Through systematic calculation and analysis of foreign-related litigation data from 2023 to 2025, we can clearly gain insight into the profound structural changes that are taking place in overseas intellectual property disputes.
1\. The surge in the scale of litigation in the United States and the dilemma of asymmetric defense
As the most mature jurisdiction in the world for intellectual property commercialization and the most intense litigation confrontation, the United States has always been the "main battlefield" where Chinese companies encounter attacks when going overseas. Data show that in 2023, a total of 1,173 new intellectual property litigation cases were filed by Chinese companies in the United States, a significant increase of 19.0% compared with 2022, showing a steep curve that continues to rise to high levels 1.
| Case types | Number of new cases filed in 2023 | Year-on-year growth rate | Number of Chinese defendants involved | Year-on-year growth rate of number of lawsuits involved | Average compensation amount (USD) |
|---|---|---|---|---|---|
| Patent litigation | 447 cases | 56.1% | 2,452 cases | 167.4% | 23.7172 million |
| Trademark litigation | 757 cases | 5.4% | 16,793 cases | 98.8% | 1.1798 million |
| Trade secret litigation | 23 cases | 27.8% | 47 cases | 27.0% | No global statistics yet |
The above statistics reflect the deep-seated worries and asymmetric rights protection pressure faced by Chinese companies in overseas markets: First, the high compensation risk and collateral strangulation effect of patent litigation. The number of new patent litigation cases surged by 56.1%, and the number of Chinese entrepreneurs involved soared by an astonishing 167.4%1. This discrepancy in data shows that U.S. plaintiffs are increasingly adopting the tactics of "multiple lawsuits per case," "supply chain traceability strikes," or "batch rights protection," and involve multiple Chinese entities in the upstream and downstream of the same supply chain (from parts suppliers to OEMs, from OEMs to brands) into lawsuits. The average amount of damages awarded in patent litigation is as high as US$23.7172 million. This astronomical figure means that once the lawsuit is lost, the vast majority of small and medium-sized enterprises going overseas will face the devastating outcome of bankruptcy and liquidation 1. Secondly, the abnormally high absence rate in trademark litigation exposes systemic shortcomings in compliance and response capabilities. Although the average amount of damages awarded in trademark litigation is relatively low (US$1.1798 million), and is mainly concentrated in the wholesale, retail and cross-border e-commerce industries (accounting for 82.56%), an extremely dangerous signal is that in up to 66.1% of trademark litigation cases, Chinese defendants were directly sentenced to lose due to default (Default Judgment)1. This reveals that a large number of Chinese cross-border sellers are often forced to choose passive evasion strategies of "abandoning stores to protect themselves" and "clearing funds" when faced with language barriers, high legal fees in foreign countries, and complicated federal civil litigation procedures.
2\. "Non-patent practicing entities" (NPE)'s financial suppression and forum-selective litigation preferences
In U.S.-related patent litigation, the nuisance of Chinese companies by "non-patent enforcement entities" (NPEs) known as "patent trolls" shows a high degree of capitalization, organization and financialization. Among the 448 foreign-related patent litigation cases filed in 2023, 59 cases directly involve NPE entities, accounting for 13.2% 4 .
A deep penetration into the background of these NPE subjects revealed that as many as 74.5% of NPEs belong to the category of “Acquired patents” and are involved in a total of 44 lawsuits 4 . These institutions themselves are not engaged in any product R&D or manufacturing. Instead, they rely on their abundant litigation financing (Litigation Funding) to acquire basic patents from companies or universities on the verge of bankruptcy at low prices in the secondary market, carefully construct litigation traps, and extract settlement funds or licence fees by initiating infringement lawsuits. In terms of strategic selection of jurisdictional courts, NPEs have shown an extremely strong tendency to engage in forum shopping. The Eastern District Court of Texas (E.D.Tex.) and the Western District Court (W.D.Tex.) accounted for an absolute share of 45.8% (27 cases) and 30.5% (18 cases) of NPE litigation respectively 4. The fundamental reason why these two federal district courts have become the "main fronts" of NPEs is that they have a pro-patentee jury tradition, an extremely tight trial schedule (Rocket Docket), and a very high rejection rate of patent invalidation proceedings (PTAB) requests to suspend proceedings, thus forming a huge lever of pressure on defendants.
3\. Defence resilience and compliance awakening of digital economy enterprises
Against the backdrop of a sharp rise in overall foreign-related infringement risks, companies in China's digital economy (such as communications, artificial intelligence, and semiconductor companies) have demonstrated intellectual property defence resilience and practical capabilities that are significantly better than traditional manufacturing. The latest sample survey shows that 7.3% of enterprises in my country's digital economy experience patent infringement, which is not only lower than the overall national level of 8.0%. After encountering infringement, as many as 92.3% of enterprises will take the initiative to take legal counterattacks and rights protection measures, far exceeding the overall average of 84.2%5.
Digital economy companies can show stronger ability to detect infringement clues and a more proactive response attitude. The underlying logic is that competition in this field is essentially a competition of underlying codes, algorithm models and communication standards, and is extremely technology-intensive. Chinese digital companies have been forced to integrate into the cruel game network of global patent cross-licensing (Cross-licensing) in their early stages of development. The long-term high-pressure confrontation has forced them to establish a proactive intellectual property early warning and countermeasure system centered on FTO (free implementation rights) search, joint innovation bodies (adopted by 21.7% of companies), and standard essential patent layout. 5
2. Global litigation wars and strategic game mechanisms in key overseas industries
Different industries are at different levels in the value chain during global expansion, and the intellectual property risks they encounter show significant industry specificity. Automobiles, photovoltaics, communications and cross-border e-commerce are the four pillars of China's current participation in the reconstruction of the global industrial chain. Its overseas litigation has transcended the purely legal category and evolved into a micro-game of national industrial discourse rights.
1\. Photovoltaic industry: from "three heads outside" to patent leadership, patent weaponization under production capacity reshuffle
China's photovoltaic industry has completed an astonishing historic leap in the past decade or so, transforming from a passive dependence on materials, equipment and markets to an absolute global technology and production capacity center. As of the end of 2023, China's photovoltaic industry has accumulated 168,000 patent applications, 22,000 valid invention patents, and controls more than 60% of the world's photovoltaic patents 6. However, with the extreme expansion of domestic photovoltaic production capacity, cell prices have dropped by as much as 40% 7. Under extremely cruel homogeneous competition, patent litigation has become the ultimate "exclusive weapon" for leading companies to build business barriers and clear out competitors in overseas high-premium markets (such as the United States, Europe, and Australia).
Zero-sum game and involution and spillover of technology routes: Between 2024 and 2025, patent wars among Chinese photovoltaic giants will break out in many places around the world. The core conflict focuses on the two cutting-edge technology routes of TOPCon (tunnel oxide passivation contact) and BC (back contact). Since TOPCon’s technical threshold is relatively low and homogeneity is serious (cell shipments will account for 67% in 2024), while BC’s technical threshold is high and commercialization is difficult, the patent litigation between the two parties is essentially a commercial war for the dominance of next-generation market standards. For example, LONGi Green Energy sued JinkoSolar and its subsidiaries in the Federal District Court for the Eastern District of Texas in the United States at the end of 2024, accusing its TOPCon and multiple photovoltaic modules of patent infringement, and strongly requested the court to issue a comprehensive ban on sales; JinkoSolar subsequently launched patent counterattacks against LONGi in many places7.
Global strangulation by multinational giants and counterattacks by Chinese companies: In addition to the internal friction among domestic echelons, Chinese companies are also facing a global patent strangulation network deployed by established multinational giants such as First Solar and Maxeon of the United States and Hanwha (Q-Cells) of South Korea. South Korea's Q-Cells successfully won the first-instance patent lawsuit against Jinko, REC and Longi in the Dusseldorf District Court in Germany (involving the EP 689 patent for dielectric layer protection technology designed to reduce solar cell efficiency loss). The judgment not only gave Q-Cells the right to enforce a temporary injunction, but also ruled that three relevant Chinese companies must take measures to recall infringing products sold since 2019 and agree to destroy them 9. Faced with this multi-dimensional attack, Chinese companies are no longer passively beaten, but have begun to skillfully use European and American judicial tools to carry out reciprocal counterattacks. For example, in 2024, Trina Solar established the strategy of "simultaneously advancing products overseas and patent layout". Not only did it apply to customs to detain the photovoltaic modules exported by Changshu Canadian Solar to Europe (although they were later released due to the provision of guarantees), it also initiated a 337 investigation (case numbers 337-TA-1422 and 1425) with the U.S. International Trade Commission (ITC) against Jiangsu Runyang, Canadian Solar and India's Adani, accusing them of infringing TOPCon's underlying patent 6.
Strategic Implications: The litigation landscape of the photovoltaic industry shows that pure "manufacturing cost advantage" can no longer guarantee overseas market share. Enterprises must evolve from the patent operation and maintenance stage of "from many to strong" and simultaneously deploy defensive patents and offensive patent pools in multiple places around the world 6. At the same time, in the face of cross-border litigation, companies need to skillfully use antitrust defense, initiate multi-country invalidation procedures (IPR) for patents involved in litigation, and carry out design around core technologies in order to obtain cross-licensing chips in multilateral negotiations.
2\. Automotive Industry (EV): Trade Secret Crisis in Executive Mobility and SEP “Cross-Border Harvesting”
In 2023, my country will export 4.91 million complete vehicles, ranking first in the world for the first time11. With the rapid development of the new energy vehicle (EV) industry, car companies going overseas not only face the risk of infringement of traditional design and mechanical patents, but also encounter the compound challenges of core technology leakage and cross-domain communication patent charges. Dongfeng Motor R&D Institute pointed out that the current independent overseas patent layout of Chinese car companies is still weak, with the average overseas valid patents accounting for less than 10%, and there is a significant generation gap with established multinational car companies 11.
Fatal Trade Secret Litigation Triggered by Personnel Movement: The competition among new forces in the field of new energy vehicles is highly dependent on the competition between top R&D teams and AI algorithm experts. High-frequency personnel movements can easily trigger trade secret disputes. In March 2024, Faraday Future (FF) and its Chinese subsidiaries filed a lawsuit against Human Horizons founder Ding Lei and Gaohe Automobile in the Shenzhen Intermediate People's Court 12 . FF accuses Ding Lei of stealing FF's new AI car-making concept, a full set of design data and core business secrets while serving as a senior executive of LeTV and FF, and launching HiPhi X and other series of models that are highly copied from the FF 91 within a very short R&D delivery cycle 14. FF requested the court to order Gaohe Automobile to stop designing, producing, and selling allegedly infringing products and to cease after-sales services 12. Although Gaohe Automobile firmly denies plagiarism and emphasizes that it has independent intellectual property rights (HiPhi Such cases highlight the need for car companies to establish extremely tight physical and digital defence lines before going overseas, and improve the encrypted access traces of technical drawings and non-compete audits of departing personnel.
Dimensionality reduction attack on communication standard-essential patents (SEP): With the advent of the era of intelligent connected vehicles (ICV), cars have essentially evolved into "super-intelligent terminals mounted on four wheels." This exposes traditional car companies directly to the firepower of communication giants’ huge standard essential patents (SEPs). Avanci, a world-renowned patent licensing platform, has launched a 5G vehicle project, covering 2G to 5G and C-V2X technologies from more than 40 licensors, and implementing unified pricing (US$29 per vehicle before February 2024, and US$32 thereafter) 16. In July 2024, the electric vehicle giant Tesla tried to challenge Avanci and requested a significant reduction in patent licensing fees in the High Court of London, England, but was ruthlessly dismissed by the presiding judge Timothy Fancourt17. This ruling is another major victory for Avanci after taking down giants such as General Motors and Volkswagen. This sends an unavoidable signal to Chinese automakers: The judicial space for trying to resist or significantly lower the price of SEP licence fees by virtue of their status as an OEM has been completely blocked. Car companies must immediately carry out "component-level compliance audits" to clarify the patent risks of communication T-Box and other modules, transfer infringement risks and licensing costs to first-tier suppliers (Tier 1) during the procurement stage, and actively formulate response plans 17.
3\. Communications industry: WTO disputes from anti-suit injunction blocking to global rate ruling rules
In the fields of 5G/6G mobile communications and audio and video codecs, Chinese companies (such as Huawei, Xiaomi, OPPO, and Lenovo) have completed their dual identity transformation from being mere “technology implementers” to “low-level standard setters.” This transformation triggered a battle of the century with traditional European communications giants such as Nokia and Ericsson over the global fair, reasonable and non-discriminatory (FRAND) licensing rate for standard essential patents (SEPs).
The battle for jurisdiction over global FRAND rates and China’s judicial breakthrough: For a long time, the pricing power of global SEPs has been firmly controlled by British, American and German courts. In November 2023, the Chinese court made a historic breakthrough in the OPPO v. Nokia fee case and made my country's first SEP global licence fee judgment. This judgment is the first in the world to scientifically determine the cumulative rate of the 5G industry at 4.341%-5.273%, and pioneeringly determines the value contribution ratio of 5G multi-mode mobile phones (50:40:5:5) 18. This landmark ruling demonstrates the judicial wisdom of Chinese courts in resolving complex disputes in the global technology industry and breaks the long-term pricing monopoly of the West.
Anti-Suit Injunction (ASI) strategy and the far-reaching backlash of the WTO DS611 case: In the process of competing for jurisdiction, Chinese courts have (especially before 2022) used "Anti-Suit Injunction" (ASI) as a strategic behavioral preservation tool, aiming to prevent foreign rights holders from initiating parallel lawsuits overseas (such as Germany) and applying for injunctions, thus consolidating the judicial authority of Chinese courts in determining global FRAND rates 19. The theoretical research of the famous scholar Li Zonghui pointed out that for this kind of transnational anti-suit injunction, courts in civil law systems such as Germany tend to issue absolute "anti-anti-suit injunctions" (AASI), believing that it is certainly illegal and infringes upon the country's judicial sovereignty; while the Anglo-American legal system makes discretionary decisions based on the "Vexatious or Oppressive" test 22. China's frequent practice of anti-suit injunctions has triggered huge international backlash. The EU took it to the World Trade Organization (WTO) in February 2022, triggering the famous DS611 dispute 21. Although the preliminary panel had favored China, in the multi-party provisional appeal arbitration arrangement (MPIA) that was transferred due to the paralysis of the WTO appellate body, the arbitral tribunal made a final ruling in July 2025: it determined that China’s practice of issuing anti-suit injunctions essentially restricted SEP holders from exercising their rights and seeking relief in foreign courts, constituting a violation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) 21. The ruling requires China to revise its judicial practices within 90 days, otherwise the EU has the right to seek trade retaliation (such as raising tariffs).
Coercive reverse pressure and strategic restructuring by the British and American courts: Outside the WTO framework, the Western judicial system is also constantly exerting pressure. In early 2025, in the case of Lenovo v. Ericsson, the British Court of Appeal made a rare ruling and declared Ericsson an "Unwilling Licensor" when Ericsson refused to provide a temporary license. 23 The court held that although Ericsson accused Lenovo of delaying negotiations (holding out) for 16 years, Lenovo's delay has been remedied because Lenovo has promised to accept the British court's FRAND fee ruling and British law allows retroactive FRAND fees (including interest); instead, Ericsson's continued pursuit of an injunction at the U.S. ITC constitutes an oppressive "hold up" 23 . In the end, the court forced Lenovo to pay a nine-digit temporary licence fee, forcing the two parties to reach a partial settlement and transfer it to arbitration. In the case of Amazon v. Nokia, the British court also approved Amazon’s provisional licence declaration and reiterated that the main relief of the SEP should be financial compensation rather than an injunction. 23
Faced with the double encirclement of WTO rulings and Western justice, the response strategies of Chinese communications companies and judicial authorities have undergone profound evolution: since the EU filed a WTO complaint in 2022, Chinese courts have actually stopped issuing new anti-suit injunctions 21. The focus of the game in the future will turn to improving the transparency and efficiency of trial procedures, optimizing the economic basis of rate calculation models, and using independent and convincing judicial practices on global licensing rates to attract parties to voluntarily choose China as a dispute resolution centre instead of relying on strong anti-suit injunctions to block 21.
4\. Cross-border e-commerce: SAD’s secret litigation and the compliance storm in the platform’s underlying ecosystem
With the strong expansion of Chinese cross-border e-commerce platforms such as TEMU, SHEIN, and AliExpress overseas, the applicable boundaries of the "Safe Harbor Principle" are facing unprecedented challenges. The dispute has escalated from scattered sellers selling counterfeit goods to a systematic judicial stranglehold on China's supply chain groups and even the platform's underlying business model.
SAD (Schedule A) batch litigation model and fund freezing dilemma: Courts represented by the U.S. Federal District Court for the Northern District of Illinois (N.D.Ill.) have become the “super hardest hit area” for Chinese e-commerce companies to be sued. According to the typical case report of the Jiangsu Trade Promotion Mediation Center, in July 2024, a large number of Chinese merchants encountered typical "Schedule A Respondent Litigation" (SAD Litigation) 25. Under this model, the U.S. plaintiff seals the information of up to hundreds of respondents in a non-public "Schedule A" on the grounds that their trademark rights or trade dress (Trade Dress) have been infringed. The court does not need to disclose the list of defendants when filing the case. Taking advantage of this invisible model, the plaintiff quickly applied to the court and obtained a temporary restraining order (TRO), requiring e-commerce platforms (such as Alibaba International Station and Amazon) to immediately freeze all funds in the accounts of the stores involved and remove product links 25. At the same time, the plaintiff only made electronic service through simple means such as email25. Due to information asymmetry, Chinese sellers often only learn of being sued when their accounts have been cleared in the early morning, missing the best opportunity to defend themselves. 26 Faced with lengthy and tens of thousands of dollars in U.S. legal fees, the vast majority of small and medium-sized sellers whose funds have been frozen for only a few thousand dollars are forced to give up resistance and allow the court to make a default judgment and withhold funds. This has evolved into a low-cost, high-return "legal harvesting industry chain" 25.
SHEIN v. TEMU case: Platform algorithms and data hegemony face judicial deconstruction: On a more macro level, the platform itself has also become a target of litigation. In August 2024, SHEIN launched an unprecedented comprehensive lawsuit against TEMU in the Federal District Court for the District of Columbia (D.D.C.)27. This is not a simple image copyright dispute (although the Illinois court has earlier issued TROs to 16 TEMU sellers who infringed SHEIN's copyright) 28. SHEIN's core appeal directly targets TEMU's platform operating mechanism. The complaint describes TEMU as a comprehensive "illegal system" and accuses it of not being a purely neutral platform, but by stealing business secrets (such as SHEIN's Best Seller Data), deeply controlling sellers' product selection, pricing rules, image generation and even traffic distribution mechanisms, and implementing systematic trademark counterfeiting and false advertising behaviors 27. The court's review at the motion to dismiss stage showed that once it is confirmed that an e-commerce platform has been deeply involved in or even induced merchants' infringement through algorithm guidance, traffic tilting, etc., it will completely lose the protective umbrella of the platform safe harbor and must bear extremely heavy direct or joint infringement liability27. This requires China's cross-border e-commerce platform to urgently reconstruct its internal IP review algorithm, seller compliance agreement and data crawling specification boundaries.
3. Power evolution and strategic responses to international frontier judicial rules
On the basis of an in-depth understanding of individual industrial cases, Chinese enterprises going overseas must have a deep insight into and adapt to the evolution of the international macro-judicial rule base. The deep penetration of the US ITC 337 investigation and the long-arm ambition of the EU Unified Patent Court (UPC) constitute the most lethal systemic risk at present.
1\. U.S. ITC 337 Investigation: In-depth commercial probing and compliance limit testing beyond tariff boundaries
Although the U.S. International Trade Commission (ITC) conducts investigations based on Section 337 of the Tariff Act of 1930, it does not have the power to award financial compensation, but it has the privilege of issuing General Exclusion Orders (GEO) and Limited Exclusion Orders (LEO), which can directly cut off the physical channels for Chinese products to enter the U.S. market. In 2023, there were 20 US-related Section 337 investigations of Chinese companies (involving 98 companies), and 70% of the cases were filed due to patent infringement1.
Extremely Harsh Evidence Discovery (Discovery) and High-pressure Evidence Collection System: The real threat to Chinese companies from Section 337 investigations often lies not in the final infringement determination, but in its highly confrontational "evidence discovery" procedures. According to U.S. federal rules, the plaintiff’s lawyers have the right to require the Chinese side to provide a massive amount of underlying information without reservation, including research and development logs, all production line records, and financial sales data. 29 More deterrent are "Factory Inspection" and "Deposition". The American lawyers and technical experts hired by the plaintiff can fly directly to China and enter the company's production workshop to conduct a no-obstacle video investigation; at the same time, they will conduct long-term, face-to-face high-pressure cross-examination of the company's core technical backbone and senior executives, and the entire process will be recorded by a designated stenography company29. During this process, if a Chinese company engages in dishonest behaviour such as contradictory original data, destroying records or even fabricating data due to chaotic internal management, the ITC judge will not hesitate to apply the principle of "adverse inference" and directly declare that China has lost the case and issue an exclusion order. 29 Therefore, establishing an electronic document management and litigation memorandum mechanism (E-Discovery Readiness) that cannot be tampered with is the basis for the survival of an enterprise. In addition, with technological changes, 337 cases surrounding frontier fields such as artificial intelligence are increasing sharply 30 .
2\. EU Unified Patent Court (UPC): Pan-European long-arm jurisdiction and dimensionality reduction strike of ban
The EU Unified Patent Court (UPC), which will officially launch in June 2023, aims to completely end the long-standing fragmented pattern of European patent litigation by providing a single ruling that will be effective in all participating member states. However, the series of landmark judgments issued by the UPC in 2025-2026 have exposed its strong judicial expansionism and long-arm jurisdictional ambitions, posing an unprecedented deterrent to non-EU member states (especially Chinese overseas enterprises) 31.
| UPC typical cases and presiding courts | Breakthroughs in core rules and expansion of judicial sovereignty | Strategic impact on Chinese overseas companies |
|---|---|---|
| Fujifilm v Kodak (Düsseldorf/Mannheim Branch) | Geographical long-arm jurisdiction expansion: The court found that it had the authority to hear infringements committed within the UK (not a member of the UPC) and to award relief including damages and permanent injunctions. 31 | Completely breaking the stereotype that the effectiveness of UPC is limited to contracting countries, the operations of Chinese companies in non-UPC European countries are no longer absolutely safe. |
| HL Display v Black Sheep (The Hague Branch) | In-depth extension of the Convention network: A permanent injunction with extremely broad coverage is issued, and its effect not only covers UPC countries, but also extends to signatory non-ratified countries (Ireland), Lugano Convention countries (Switzerland, Norway, Liechtenstein) and the United Kingdom. 31 | A ban can paralyze the business layout of Chinese companies in the entire pan-European Economic Area (EEA). |
| Dyson v Dreame (Hamburg District Court) | Anchor Defendant: A temporary injunction was issued against Spain, a non-UPC member state; at the same time, the defendant in Hong Kong was directly and forcibly brought into the jurisdiction of the UPC on the grounds that the defendant had an authorised representative in the EU. 31 | Even if the Chinese parent company has no entity in Europe, as long as it hires an EU authorised agent, it can be dragged into the high-pressure trial system of the UPC across borders. |
| Boehringer v Zentiva & Lepu (UPC Appellate Division/Brussels Branch) | The extreme precondition of "imminent infringement": Defining the preparation of medical devices before marketing (such as pricing negotiations, obtaining reimbursement qualifications), or even just active publicity in combination with CE certification at trade shows, can trigger the risk of infringement; the court can unilaterally issue extremely deterrent site inspection and evidence preservation orders. 31 | Subverts the traditional understanding that "infringement only occurs when substantial sales occur". Chinese machinery companies face the fatal risk of being vigorously searched, disclosing production records and being fined huge amounts during the preparation period for exhibitions or certification. |
Invalidation Crisis of the Opt-out Mechanism and Lock-in Rule: Due to the huge risk of "one failure and the entire European market cleared" in the UPC system, up to 34.2% (approximately 538,000) of European valid patent holders extremely carefully chose the "Opt-out" mechanism during the transition period to retain the right to litigate in the local courts of each member state 33. However, this "safe haven" is crumbling. In November 2024, the UPC Court of Appeal established the cruel "Lock-in Rule" in the case *AIM Sport Vision AG v Supponor*. The court ruled that if domestic litigation proceedings against a patent have been substantially initiated (even in the "sunrise period" before the formal establishment of the UPC), the patentee will permanently lose the qualification to withdraw its Opt-out and re-enter the UPC system 34. This rule requires Chinese companies to have the ability to deduce extremely precise litigation timelines when exporting to Europe, skillfully use "lock-in rules" to contain opponents, or prevent their own patent strategies from being accidentally solidified by opponents using member state litigation. In terms of substantive examination, the UPC Court of Appeal abandoned the rigid “problem-solution (PSA)” method of the European Patent Office (EPO) in the case of Amgen v. Sanofi, and turned to a “holistic” inventiveness evaluation standard that is close to the practices of other major countries, which poses a higher challenge to the quality of patent document writing 31.
4. Firewall construction: Bottom-line defence through upgrading the foreign compliance system and technology export review
Facing the complicated and ever-changing overseas judicial environment with obvious exclusivity, the Chinese government and business community are accelerating the upgrade from passive "fire-fighting response" to active "institutional defense". This is reflected in the mandatory upgrade of enterprise-level compliance standards and the refined operation of national-level technology export control.
1\. Reconstruction of the underlying logic of "Enterprise Intellectual Property Compliance Management System Requirements"
On January 1, 2024, the recommended national standard "Enterprise Intellectual Property Compliance Management System Requirements" (GB/T 29490-2023) jointly issued by the State Administration for Market Regulation and the National Standards Committee was officially implemented, completely replacing the old version of the "Enterprise Intellectual Property Management Specifications" that had been in use for ten years. 35 The change of terminology from "standards" to "compliance system" marks a fundamental leap in management focus: from pursuing the number of patent applications and building superficial management processes in the past, to focusing on preventing major legal breach risks and ensuring the company's "freedom of enforcement" (FTO) in the global market as the sole core.
The most revolutionary innovation of this standard (managed by the TC554 National Knowledge Management Standardization Technical Committee) is that it introduces strong risk penetration: "Appendix B: List of Typical Prohibited Behaviors for Patents, Trademarks, Copyrights, and Trade Secrets" has been added to the full text of the standard 35. This mandatory comparison table requires multinational companies to implement compliance audit processes at every capillary-level business node, including project R&D, supply chain procurement, OEM production, and even overseas exhibition participation. Not only that, in response to the rise of AI technology, my country’s judicial authorities have also established compliance boundaries through typical cases. The Supreme People’s Court clarified in a case released in 2025 that the AI model parameters and structures formed by operators through data training are competitive interests protected by the Anti-Unfair Competition Law 37. In a foreign-related context, companies must build a global governance structure 38 led by a dedicated global intellectual property affairs department, and use intellectual property compliance as a rigid prerequisite for evaluating executive performance, handling non-competitions, and signing procurement defect guarantee contracts with foreign parties, so as to cut off the risk transmission chain that causes the parent company to fall into huge overseas compensation difficulties due to individual or local violations. Currently, the English version of the standard is being translated intensively, aiming to provide Chinese enterprises with standardized voice output in the Belt and Road Initiative and broader international cooperation 36.
2\. The "safety net" for technology export control and patent transfer review
Against the backdrop of severe technological wars and Western core technology blockades, China has steadily established and iterated a reciprocal technology export review system to ensure that core intellectual property rights related to national security, industrial foundations, and social public interests are not maliciously or unintentionally lost. The 2023 revised version of the "China's Export Prohibited and Restricted Technologies Catalog" jointly issued by the Ministry of Commerce and the Ministry of Science and Technology (a total of 139 technical items, including 24 items prohibited from export and 115 items restricted from export) has built this solid national firewall 39.
Strategic Blockade of Key Core Technologies: The new version of the catalog accurately covers cutting-edge areas where China has leading advantages or involves ethical safety. In the prohibited export category (Category J), the export of gene editing technology used for human germ cells (embryos, eggs, sperm) is strictly prohibited; at the same time, the Beidou satellite navigation system information transmission encryption algorithm, bipolar device (integrated circuit) manufacturing technology that is resistant to instantaneous dose rate radiation, and irreplaceable technical resources such as rare earth metal extraction and separation and neodymium iron boron permanent magnet manufacturing are blocked40. In the restricted export category (Category X), strict approval thresholds are set for the utilization of crop hybrid advantages, large drones, and high-end equipment manufacturing technologies40.
"Double Lock" Review Mechanism for External Transfer of Patent Rights: For technologies that fall into the export-restricted category in the Catalog, Chinese companies must go through an extremely strict "double lock" review channel when transferring or licensing their associated patent rights (or patent application rights) to overseas entities (including R&D centers and other structures established by multinational companies in China). First, enterprises must submit detailed technology export contracts to the local district and city commerce authorities for pre-approval and registration in accordance with the "Technology Import and Export Management Regulations" and related measures to obtain a legal "Technology Export License" 41. Secondly, when applying for changes in bibliographic items (registration of transfer of patent rights) to the National Intellectual Property Office (CNIPA), the review mechanism is extremely strict: if the application is electronic, it must be submitted through a designated system instead of paper; if the transferee is an overseas legal entity that has not appointed an agency, strict written certification materials must be provided to verify the consistency of the contact person's employee identity and registered address, and to prevent the use of "shell offshore companies" to secretly establish positions 42. This seamless review mechanism ensures that core patents have passed the dual stress test of national scientific and technological security and economic lifeline before they are exported overseas.
5. Overall Coordination: Building an Overseas Intellectual Property Risk Early Warning and Response Empowerment Network for Chinese Enterprises
It is difficult for a single soldier to withstand strong ships and powerful artillery. Faced with NPE's group extortion, UPC's long-arm jurisdiction, and the SAD model's covert raids, the establishment of a four-in-one "overseas intellectual property risk warning and response system" consisting of national top-level design, local precise empowerment, industry collaboration, and corporate entity execution is an inevitable choice for Chinese companies to break through and sail away.
1. Two-wheel drive of national guidance and local fiscal and taxation policies: The State Intellectual Property Office has issued a national administrative protection work plan, promoted the infrastructure construction of the National Overseas Intellectual Property Dispute Response Guidance Centre and major local sub-centers with high standards, and continued to optimize the layout of overseas outlets 43. At the local implementation level, the first-mover regions represented by Shanghai have implemented the early warning mechanism with very bold fiscal and taxation support. The Shanghai Intellectual Property Office has officially launched the 2026 overseas intellectual property risk early warning system construction project. For enterprises operating in the city with good credit, special financial subsidies of up to 300,000 yuan will be provided, which will be directly used to support enterprises to carry out FTO (freedom of patent enforcement) analysis for specific overseas countries, and encourage scientific research institutes and law firms to issue detailed patent/trademark overseas layout and infringement early warning reports for enterprises 45. Yancheng and other places have also established a detailed tracking mechanism for changes in overseas intellectual property laws and regulations and a key case prevention database 46 relying on the "Zhinanzhen.com".
2. Data empowerment of industry collaborative operations platforms: Targeting the common pain points of specific high-risk industries, industry-level exclusive early warning platforms are playing a mainstay role. For example, the "Automobile Overseas Intellectual Property Infringement Early Warning Platform", which will be launched in 2024, deeply integrates more than ten functional modules including overseas legal environment database, patent application process and cost information to help independent brand car companies accurately demine their vehicles before going overseas 11. In the face of cross-border litigation, industry associations can rely on such platforms to quickly gather domestic companies that have been harassed by the same NPE or the same competitor, share existing technical documents (Prior Art) for invalidation, establish a joint defence alliance, and even jointly establish a "joint response risk fund", thereby minimizing the defence costs of Chinese companies and maximizing the effectiveness of counterattacks.
3. The "filter" countermeasures effectiveness of customs and border protection outposts: Customs and border protection of intellectual property rights is not only a shield against the penetration of external low-quality counterfeit goods, but also the first line of defence for overseas companies to proactively cut off competitors' global infringement logistics chains. Among the typical protection cases announced by China Customs in 2024, many cases involving trademark infringement of photovoltaic modules (such as Shanghai Customs seized 737 solar modules infringing the SUNTECH trademark) and trademark rights of mechanical parts were accurately investigated 2. With the in-depth application of the "Customs Administrative Penalty Discretionary Standards (3)", the implementation of refined discretion in not imposing penalties for minor infringement cases of 200 cases and less than 5,000 yuan, which has greatly improved the transparency and fairness of customs law enforcement 47. Chinese high-tech enterprises should enter all of their independently developed core patents and overseas trademarks into the General Administration of Customs filing system, and use the Customs' huge import and export big data risk control model to implement dimensionality reduction and blocking of infringing products.
Conclusion
From NPE’s serial litigation and extortion in the Eastern District Court of Texas, to the unilateral preservation injunction of the UPC branch in Brussels; from the zero-sum fight among photovoltaic giants competing for next-generation technology standards, to the legal battle over SEP transnational anti-suit injunctions in the WTO arbitration tribunal, foreign-related intellectual property disputes have long since transformed into an ultimate trial without smoke, but enough to determine the global status of China’s core industrial chain.
In order for Chinese enterprises to achieve a historic leap from "going overseas to break new ground" to "taking root globally", they must completely break the "streaking" thinking inertia of purely pursuing market share and separating technology research and development. Only by deeply embedding intellectual property compliance review into the entire life cycle of global R&D structures, supply chain systems, and capital operations, proactively deploying a high-value patent network that places equal emphasis on defence and offense, and keenly capturing and utilizing the evolutionary opportunities of the global judicial rule base can we build an indestructible institutional moat in the turbulent wave of globalization. This is not only the bottom line for the survival of every overseas company, but also the core strategic fulcrum for China to win dominance in the reconstruction of the global scientific and technological order.
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