By Simon Lester in WTO Disputes, Trade and Intellectual Property — 18 Sep 2025

Guest Post: China – Enforcement of IP Rights: Navigating Different Conceptions of Territoriality in International Intellectual Property Law

This is a guest post from Emmanuel Kolawole Oke, Senior Lecturer at Edinburgh Law School

What does it mean to ‘give effect to’ the provisions of the TRIPS Agreement? That is the key question at the centre of the dispute between the EU and China at the WTO regarding anti-suit injunctions in standard essential patents (SEP) cases. It seems obvious from the sentence that WTO Members are required to implement the provisions of the TRIPS Agreement within their domestic legal systems. This is not controversial. However, does this mean that WTO Members can implement the provisions of the TRIPS Agreement in a manner that undermines the protection and enforcement of IP rights as required by the TRIPS Agreement in the territories of other WTO Members? Or is there an obligation on WTO Members not to undermine the protection and enforcement of IP rights in the territories of other WTO Members? This post will focus on the meaning and scope of the first sentence of Article 1.1 of the TRIPS Agreement as interpreted by both the panel and the Arbitrators in this dispute.

Facts and Procedural History

In February 2022, the EU initiated the dispute settlement process at the WTO against the issuance of anti-suit injunctions by Chinese courts which the EU considered to be a violation of certain provisions of the TRIPS Agreement, specifically Articles 1.1, 28.1, 28.2, 41.1, 44.1, 63.1, and 63.3 of the TRIPS Agreement. These anti-suit injunctions are typically issued in the context of disputes concerning the determination of a fair, reasonable and non-discriminatory (FRAND) rate for SEPs. Specifically, China's anti-suit injunction policy in this regard empowers Chinese courts to impose a range of prohibitions at the request of implementers including prohibiting the SEP holders from commencing, continuing, or enforcing the results of any legal proceedings before any non-Chinese court, including proceedings for patent infringement or the terms on which a patent would be licensed. It also includes the possibility of forbidding a party in an SEP case in China from applying for the enforcement of judgments of any non-Chinese court in the territories of other WTO Members or from seeking any judicial relief outside the jurisdiction of Chinese courts. These prohibitions could be enforced through cumulative daily fines for non-compliance. These types of injunctions have been granted by Chinese courts in at least five specific cases: Huawei v. Conversant, ZTE v. Conversant, OPPO v. Sharp, Xiaomi v. InterDigital, and Samsung v. Ericsson. The obvious implication of this policy is that it impacts the ability of SEP holders to enforce their patent rights outside China and it therefore has an extraterritorial effect. However, is there any provision in the TRIPS Agreement that prohibits WTO Members from implementing measures (such as the anti-suit injunction policy) that could affect or even undermine the protection and enforcement of IP rights in other WTO Members?

Prior to the conclusion of the proceedings before the WTO dispute settlement panel set up to hear the complaint, both China and the EU agreed to enter into arbitration to decide any appeal because the WTO’s Appellate Body is currently non-functioning. For this purpose, the parties agreed to use the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) set up by a group of WTO Members as an alternative to the Appellate Body. The panel issued its report to the parties on 21 February 2025 and on 31 March 2025 the EU initiated the process for appealing the decision of the panel before the MPIA. The award of the Arbitrators was published on 21 July 2025.

Absolute Territoriality versus Constrained Territoriality

One way of framing the essence of this dispute regarding the meaning and scope of the obligation in the first sentence of Article 1.1 of the TRIPS Agreement is by classifying the two competing approaches to the principle of territoriality in international intellectual property law that was advanced by the parties in this case. While the EU advocated for a more attenuated or constrained view of territoriality, China argued for what can be described as an absolute or expansive view of territoriality that ignores any extraterritorial impact that a WTO Member's national IP law may have on other WTO Members. The panel sided with China's view in this regard when it held that the first sentence of Article 1.1 of the TRIPS Agreement simply ‘requires Members to implement the provisions of the TRIPS Agreement within their own domestic legal systems’ and that it ‘sees no basis to conclude that Article 1.1, first sentence contains any additional obligation relating to the object and purpose of the TRIPS Agreement or implementation of the TRIPS Agreement by other WTO Members’ [para 7.231, Panel Report].

Apart from the questions raised by the conclusions of the panel with regard to the compatibility of the anti-suit injunction policy with some of the provisions of the TRIPS Agreement (specifically Articles 28.1 and 28.2), it is the panel's interpretation of Article 1.1 of the TRIPS Agreement that is perhaps the most problematic aspect of the decision of the panel. Crucially, the panel had taken the view that the first sentence of Article 1.1 does not require WTO Members to refrain from taking measures that undermine the protection and enforcement of IP rights in the territories of other WTO Members. This interpretation of the first sentence of Article 1.1 essentially influenced the panel's evaluation of the compatibility of China's anti-suit injunction policy with Article 28 of the TRIPS Agreement. Fortunately, as further explained below, the panel's interpretation of Article 1.1 was reversed on appeal by the Arbitrators.

In interpreting the first sentence of Article 1.1 of the TRIPS Agreement, the panel began by noting that the ordinary meaning of the phrase ‘give effect to’ is to ‘make operative’ or ‘put into force’. The panel then observed that the second and third sentences of Article 1.1 provide immediate context for the interpretation of the first sentence. According to the panel, ‘the second sentence refers to Members' implementation of the protection required by the TRIPS Agreement “in their law”, and the third sentence refers to implementation of the TRIPS Agreement by Members “within their own legal system and practice”.’ In the panel's view, this immediate context shows that the obligation to ‘give effect to’ the provisions of the TRIPS Agreement ‘imposes a duty on Members to implement the provisions of the TRIPS Agreement within their domestic legal systems while confirming some flexibility in implementation.’

The EU did not necessarily disagree with the panel that the first sentence of Article 1.1 requires WTO Members to implement the provision of the TRIPS Agreement within their domestic legal systems. Instead, it argued that this provision further requires WTO Members to avoid taking measures that undermine the object and purpose of the TRIPS Agreement. Some of the third parties in the case also contended that the first sentence of Article 1.1 requires WTO Members to refrain from undermining the efforts of other WTO Members to implement the provisions of the TRIPS Agreement [para 7.223, Panel Report]. The panel however took the view that nothing in the text or context of the first sentence of Article 1.1 read in light of the object and purpose of the TRIPS Agreement indicates that the first sentence of Article 1.1 imposes any such additional obligation [para 7.224, Panel Report]. Indeed, in a footnote, the panel stated that the ‘customary rules of interpretation of public international law require the Panel to determine the ordinary meaning of a treaty in light of its object and purpose'’ but ‘[t]hat does not mean that specific provisions of a treaty must necessarily be interpreted to prohibit measures that contradict or undermine the object and purpose of that treaty.’ [footnote 625, Panel Report, emphasis in the original].

On appeal before the arbitrators, the EU argued that the panel's interpretation ‘reflects a flawed understanding of the object and purpose of the TRIPS Agreement, as well as the role played by the object and purpose and the principle of good faith in treaty interpretation.’ According to the EU, various recitals of the preamble and Article 7 of the TRIPS Agreement indicate that the first sentence of Article 1.1 requires WTO Members to do more than implement the TRIPS Agreement within their domestic legal systems and it requires them to refrain from taking measures that undermine the protection and enforcement of IP rights in their territories and in the territories of other WTO Members. China however maintained its view that Article 1.1 contains no ‘implicit obligation’ on WTO Members to refrain from implementing measures that undermine the protection and enforcement of IP rights in the territory of other WTO Members.

In their interpretation of the first sentence of Article 1.1, the Arbitrators agreed that the term ‘give effect’ means ‘the obligation to enact domestic legislation to implement the provisions of the TRIPS Agreement’. The Arbitrators however noted that the panel failed to recognise that the term ‘give effect’ has a broader connotation than the term ‘implement’ that is used in the second and third sentences of Article 1.1. According to the Arbitrators, the use of the term ‘give effect’ (as opposed to ‘implement’) in the first sentence of Article 1.1 appears to be deliberate. The Arbitrators further observed that the broader context of the TRIPS Agreement shows that the national systems of WTO Members for the protection of IP rights within their own territories do not exist in isolation from that of other WTO Members. In this regard, the panel cited Articles 40.3, 63.3, and 69 of the TRIPS Agreement, all of which provides for cooperation among WTO Members on various issues. For the Arbitrators, this means that the context of the TRIPS Agreement indicates that the national systems for the protection of IP rights that the TRIPS Agreement seeks to establish may interact with one another where necessary.

Concerning the object and purpose of the TRIPS Agreement, the Arbitrators also had a bone to pick with the panel's handling of Article 7 of the TRIPS Agreement. According to the Arbitrators, the panel did not properly take into account the fact that Article 7 requires that the protection and enforcement of IP rights should contribute to a balance of rights and obligations. In articulating its idea of a constrained approach to the principle of territoriality in the TRIPS Agreement, the Arbitrators stressed that a key corollary of a WTO Member's duty to give effect to the provisions of the TRIPS Agreement within its domestic legal system is refraining from frustrating the protection of IP rights granted by other WTO Members in their territories pursuant to their obligations under the TRIPS Agreement. Also, the balance of rights and obligations envisaged by Article 7 would be defeated if a WTO Member frustrates the exercise of IP rights in another WTO Member's territory.

According to the Arbitrators, requiring WTO Members to refrain from adopting measures that frustrate or undermine the functioning of the IP systems of other WTO Members is not an additional obligation. Rather, the first sentence of Article 1.1 contains only one obligation i.e. to give effect to the provisions of the TRIPS Agreement in a WTO Member's territory but the corollary of this obligation is to do this without undermining the national IP systems of other WTO Members [paras 4.71-4.74]. The Arbitrators therefore held that the panel did not properly interpret the obligation in the first sentence of Article 1.1 and it reversed the panel's interpretation in this regard.

Conclusion

If one steps back for a moment to consider the implications of the panel's interpretation of Article 1.1 beyond the facts of this case, then one can begin to imagine the many problems with the panel's approach. In one sense, the panel's approach affirms the principle of territoriality in international intellectual property law. Nevertheless, the panel appears to have inadvertently overlooked the fact that, although the TRIPS Agreement does not completely erode this principle, the TRIPS Agreement (when read as a whole) serves as a constraint on the principle of territoriality in international intellectual property law.

If one follows the panel's reasoning to its logical conclusion, then it means that a WTO Member can deliberately and actively take measures to frustrate the protection of IP rights in the territory of other WTO Members. As the Arbitrators correctly observed on appeal, the provisions of the TRIPS Agreement ‘would be rendered inoperative if Members were allowed to frustrate the implementation by other Members of their obligations under the TRIPS Agreement.’ This also has implications for the use of flexibilities (such as limitations and exceptions) in the TRIPS Agreement as part of implementing the provisions of the TRIPS Agreement. By the panel's logic, a WTO Member can legally implement measures to undermine the ability of other WTO Members seeking to use the flexibilities available to them under the TRIPS Agreement. This contradicts the objective of ensuring that the protection and enforcement of IP rights contributes to a balance of rights and obligations as envisaged in Article 7 of the TRIPS Agreement.

Ultimately, the award of the Arbitrators in this case has not settled all the complex extra-territorial issues arising from the multinational disputes surrounding SEPs. Indeed, there is a separate ongoing dispute between the EU and China regarding worldwide licensing terms for SEPs. The Arbitrators equally acknowledged that ‘the transnational litigation of private disputes concerning royalty rates for SEPs is a complex one, particularly in light of the global nature of the standards and products into which SEPs are incorporated.’ Nevertheless, at the very least, the award demonstrates that the principle of territoriality as recognised in the TRIPS Agreement is not an untrammelled principle. Crucially, while WTO Members remain free to do whatever they want in areas of IP law that are not directly addressed or regulated by the TRIPS Agreement, this freedom to do as they please in these areas cannot be exercised in a manner that undermines the implementation of the TRIPS Agreement by other WTO Members.