Context: Last year, the European Commission (EC) appealed a decision by a World Trade Organization (WTO) dispute resolution panel to reject its complaint over China’s anti-suit injunctions in a standard-essential patent (SEP) context (April 23, 2025 ip fray article). The appeal was reported to have succeeded (on 21 July 2025), but important details were unclear, and the EC continued to engage with China. Last week, we discovered that the Supreme People’s Court (SPC) of China declared the alleged antisuit policy withdrawn, but without acknowledging that it ever existed (April 6, 2026 ip fray article).
What’s new: The State Council of the People’s Republic of China has now issued the Regulations of the People’s Republic of China on Countering Unjustified Extraterritorial Jurisdiction by Foreign States. The new regulations establish a comprehensive legal framework, aimed at protecting the lawful rights and interests of Chinese individuals and entities against foreign extraterritorial legal measures that China considers unjustified.
Direct impact and wider ramifications: The regulations represent a significant expansion of China’s legal toolkit to address perceived extraterritorial overreach by foreign jurisdictions. They introduce a structured “blocking + countermeasure + anti-enforcement” system that may materially affect cross-border litigation strategies, particularly in high-value FRAND and global licensing disputes. In practice, this may encompass foreign court or regulatory decisions affecting global licensing or FRAND rate-setting disputes involving Chinese parties, including proceedings such as ZTE v. Samsung, which is currently under consideration in the High Court of Justice for England & Wales (EWHC).
The regulations, issued on April 7, 2026, establish a formal mechanism enabling China to identify, respond to, and counter foreign laws, judicial decisions, or administrative measures that exert extraterritorial effect in a manner deemed inconsistent with international law or lacking sufficient jurisdictional basis.
In the context of international patent licensing disputes, such as global FRAND rate determinations, the regulations may be interpreted as addressing scenarios where foreign courts set global licensing terms involving Chinese entities.
Applicable scenarios
Under Article 6 of the regulations, “unjustified extraterritorial jurisdiction” may arise where foreign measures meet one or more of the following criteria:
- Violation of international law or fundamental principles of international relations;Â
- Insufficient jurisdictional nexus, including situations where the dispute or conduct lacks a reasonable connection to the issuing state (e.g., absence of domicile, primary implementation, negotiation, or significant market activity);Â
- Material harm to China’s sovereignty, security, development interests, or the lawful rights and interests of Chinese entities.
Once a measure is formally identified as constituting unjustified extraterritorial jurisdiction, the State Council may issue a public announcement prohibiting domestic entities from implementing or assisting in its enforcement.
Where Chinese entities consider compliance necessary under special circumstances, they must submit an application to the competent authority of the State Council, and may only proceed upon approval and within the approved scope.
Regulatory consequences and countermeasures
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