CHINA – CERTAIN MEASURES CONCERNING THE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE UNITED STATES
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 19 October 2018
Document codes: WT/DS542/8
Complainant: U.S.
Respondent: China
Third parties: Australia, Brazil, Canada, Egypt, EU, India, Japan, Kazakhstan, South Korea, New Zealand, Norway, Russia, Singapore, Switzerland, Taiwan, Turkey, Ukraine
Dispute stage: Panel
Agreements cited: Art. 3.1, 28.2, 28.1(a), 28.1(b)  Intellectual Property (TRIPS)

CHINA – CERTAIN MEASURES CONCERNING THE PROTECTION
OF INTELLECTUAL PROPERTY RIGHTS
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE UNITED STATES
The following communication, dated 18 October 2018, from the delegation of the United States to
the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On March 23, 2018, the United States requested consultations with the Government of the People's
Republic of China ( "China") pursuant to Articles 1 and 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU") and Article 64 of the Agreement on Trade-
Related Aspects of Intellectual Property Rights ("TRIPS Agreement") (to the extent that Articl e 64
corresponds to Article XXII of the General Agreement on Tariffs and Trade 1994 ), with respect to
certain Chinese measures pertaining to the protection of intellectual property rights. The United
States held consultations with China on July 18, 2018. Those consultations unfortunately did not
resolve the dispute.
China denies foreign patent holders the ability to enforce their patent rights against a Chinese joint-
venture party after a technology transfer contract ends. China also imposes mandatory adverse
contract terms that discriminate against and are less favorable for imported foreign technology.
Therefore, China deprives foreign intellectual property rights holders of the ability to protect their
intellectual property rights in China as well as freely negotiate market-based terms in licensing and
other technology-related contracts.
The legal instruments through which China imposes these measures include the following, operating
separately or collectively:
• Foreign Trade Law of the People's Repu blic of China (adopted at the Eighth Session of the
Standing Committee of the Seventh National People's Congress on May 12, 1994, effective
July 1, 1994, in Executive Order No. 22, amended by the Eighth Session of the Standing
Committee of the Tenth National People's Congress on April 6, 2004, effective July 1, 2004,
in Executive Order No. 15, further amended November 7, 2016, in Executive Order No. 57)
• Regulations of the People's Republic of China on the Administration of the Import and Export
of Technologies (Order of the State Council No. 331, issued December 10, 2001, effective
January 1, 2002, amended January 8, 2011, in Order of the State Council No. 588)
• Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures (adopted at
the Second Session of the Fifth National People's Congress on July 1, 1979, effective July 8,
1979, in Order No. 7 of the Chairman of the Standing Committee, amended April 4, 1990,
in Executive Order No. 27, further amended March 15, 2001, in Executive Order No. 48, and
September 3, 2016, in Executive Order No. 51)
• Regulations for the Implementation of the Law of the People's Republic of China on Chinese-
Foreign Equity Joint Ventures (State Council, Guo Fa [1983] No. 148, issued September 20,
1983, effective September 20, 1983, amended January 15, 1986, in Guo Fa [1986] No. 6,
further amended December 21, 1987, in Guo Fa [1987] No. 110, July 22, 2001, in Order of

the State Council No. 311, January 8, 2011, in Order of the State Council No. 588, and
February 19, 2014, in Order of the State Council No. 648)
• Contract Law of the People's Republic of China (adopted at the Second Session of the Ninth
National People's Congress on March 15, 1999, effective October 1, 1999, in Executive Order
No. 15, as further informed by the Interpretation of the Supreme People's Court on Several
Issues Concerning the Application of Law in the Trying of Cases of Disputes over Technology
Contracts (Supreme People's Court, issued December 16, 2004, effective January 1, 2005))
as well as any amendments, or successor, replacement, or implementing measures.
The Regulations of the People's Republic of China on the Administration of the Import and Export of
Technologies, operating separately or together with other listed instruments, appear to be
inconsistent with Article 3.1 (National Treatment) of the TRIPS Agreement, solely or in conjunction
with Article 28.2 of the TRIPS Agreement, because:
• Article 24 of the Regulations accords less favorable treatment to foreign intellectual
property rights holders as compared to Chinese intellectual property rights holders.
For example, Article 24 requires that licensors to imported technology contracts
indemnify licensees for all liabilities for infringement resulting from the use of the
transferred technology.
• Article 27 of the Regulations accords less favorable treatment to foreign intellectual
property rights holders as compared to Chinese intellectual property rights holders.
For example, Article 27 requires that any improvements in imported technology
belong to the party making the improvement.
• Article 29 of the Regulations accords less favorable treatment to foreign intellectual
property rights holders as compared to Chinese intellectual property rights holders.
For example, Article 29(3) prohibits an imported technology license contract from
restricting a Chinese party from improving the technology or from using the
improved technology.1
The Regulations for the Implementation of the Law of the People 's Republic of China on Chinese -
Foreign Equity Joint Ventures, operating separately or together with other listed instruments, appear
to be inconsistent with Article 3.1 (National Treatment) of the TRIPS Agreement, solely or in
conjunction with Article 28.1(a), (b) or Article 28.2 of the TRIPS Agreement, because:
• Article 43 of the Regulations accords less favorable treatment to foreign intellectual
property rights holders as compared to Chinese intellectual property rights holders.
For example, Article 43(4) provides a Chinese joint-venture party the right to
continue to use technology transferred under a technology transfer contract after
the expiration of the contract.
The Regulations for the Implementation of the Law of the People 's Republic of China on Chinese -
Foreign Equity Joint Ventures, operating separately or together with other listed instruments, appear
to be inconsistent with Article 28.1(a), (b) of the TRIPS Agreement because:
• Article 43 of the Regulations denies foreign patent holders their exclusive rights,
including to prevent third parties not having the foreign patent holder's consent
from acts listed in Article 28.1(a), (b) of the TRIPS Agreement.2 For example,

1 To the extent China asserts that intellectual property rights holders in China, like foreign intellectual
property rights holders, are prohibited from restricting through a technology license contract a Chinese party
from improving the technology or from using the improved technology, the United States considers that China
denies intellectual property rights holders in China their exclusive rights through the application of Articles 329
and 354 of the Contract Law of the People’s Republic of China, operating separately or collectively with other
legal instruments, inconsistently with Article 28.1(a), (b) of the TRIPS Agreement.
2 See TRIPS Agreement Article 28.1(a), (b): “A patent shall confer on its owner the following exclusive
rights: (a) where the subject matter of a patent is a product, to prevent third parties not having the owner’s
consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that
product; (b) where the subject matter of a patent is a process, to prevent third parties not having the owner’s

Article 43(4) provides a Chinese joint-venture party the right to continue to use
technology transferred under a technology transfer contract after the expiration of
the contract.
Therefore, the United States respectfully requests, pursuant to Article 6 of the DSU, that the Dispute
Settlement Body establish a panel to examine this matter, with standard terms of reference as set
out in Article 7.1 of the DSU.

consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing
for these purposes at least the product obtained directly by that process.”