CHINA – CERTAIN MEASURES CONCERNING THE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS REQUEST FOR CONSULTATIONS BY THE UNITED STATES
Document: REQUEST FOR CONSULTATIONS BY
Date: 26 March 2018
Document codes: WT/DS542/1; IP/D/38
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 CONSULTATIONS BY THE UNITED STATES
The following communication, dated 23 March 2018 , from the delegation of the United States to
the delegation of China and to the Chairperson of the Dispute Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.

My authorities have instructed me to request 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
Article 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.
China denies foreign patent holders the ability to enforce their pa tent 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 im poses these measures include the following,
operating separately or collectively:
 Foreign Trade Law of the People 's Republic of China (adopted at the Eighth Session
of the Standing Committee of the Seventh National People 's Congress on May 12,
1994, effect ive 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 Stan ding
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 o n
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]
WT/DS542/1 • IP/D/38

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 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 (National Treatment) of the TRIPS Agreement, solely or in conjunctio n
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 requir es 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 techno logy or from using the
improved technology.
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 (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 intellect ual
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 t he TRIPS Agreement. 1 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.
We look forward to receiving your reply to the present request and to scheduling a mutually
convenient date for consultations.