One of the world’s most consequential conflicts is completely unknown to the vast majority of Americans. Nineteen countries – including the United Kingdom, Canada, Australia and Japan – are currently battling in the World Trade Organization over an issue that could dictate the future of global trade, innovation and the rule of law. Most are opposed to China’s position. The Biden administration is not.
It’s a major unforced error, and risks aiding Beijing in its efforts to cripple innovators in rival nations around the globe.
At issue are “anti-suit injunctions,” court-issued legal measures that prevent a party engaged in a lawsuit in one jurisdiction from simultaneously pursuing the case elsewhere. In recent years, Chinese courts repeatedly issued anti-suit injunctions, without notice or transparency, in patent lawsuits to protect Chinese companies from foreign court cases. These legally binding orders from Chinese courts cripple the ability of foreign innovators to be compensated, and ultimately support China’s goals of global technological dominance.
This is outrageous. China is violating long-standing international norms and forcing the rest of the world to play by its own, self-serving rules.
China’s use of anti-suit injunctions doesn’t occur in a vacuum. In China, unlike the United States, courts aren’t independent from the other parts of the government. Chinese courts are subject to oversight at national and local levels by the Communist Party and its leaders. They have made no secret of their hope to out-compete China’s rivals in high-tech fields.
To make matters worse, Chinese courts and trade agencies have refused to publish rulings in many patent-related cases – allowing China to deny a formal “policy” of anti-suit injunctions, in furtherance of President Xi Jinping’s open intention to “promote the application of Chinese laws and regulations on IP abroad.”
This situation should be deeply concerning to the U.S. government. And as recently as 2021, it was. That year, the Biden administration called China’s use of anti-suit injunctions a “worrying development.”
Yet when the European Union filed a case at the World Trade Organization objecting to China’s anticompetitive practices and demanding transparency, the Biden administration through its office of the US Trade Representative (“USTR”) did an about-face. Instead of backing our allies, the administration submitted a document questioning “whether the EU has sufficiently explained why the existence of the unwritten measure is not undermined by the fact that all the instances identified by the EU took place over a relatively short period of time and have not been repeated since.”
Fortunately, other allies support the EU’s position. Australia, for example, backs the EU’s position that China’s activities have “undermine[d]” the ability of the EU and other countries to enforce IP protections within their own jurisdictions.
China must be held accountable. We must work with our allies to hold China to basic standards of transparency, due process and non-interference with the parties and courts of our own legal systems.
If we don’t act soon, the next time a U.S. lawyer wants to try a patent dispute he may have to travel to Beijing.
