(Why) has China's judiciary started to issue "anti-suit injunctions" against EU companies only in 2020?

Question

According to the EU, the basis of their DS611 complain against China at the WTO is that:

Since August 2020, Chinese courts have been issuing decisions – known as ‘anti-suit injunctions’ – to exert pressure on EU companies that have high-tech patents and to prevent those companies from rightfully protecting their technologies. Chinese courts also use the threat of heavy fines to deter European companies from going to foreign courts. This has left European high-tech companies at a significant disadvantage when enforcing their rights. Chinese manufacturers request these anti-suit injunctions to benefit from cheaper or even free access to European technology.

(Why) has China not used these ‘anti-suit injunctions’ before? Is there some new Chinese law that enables these injunctions, or some high-level Chinese court decision, setting precedent etc.? Or have just EU companies become more assertive than before?

Answer 1

(Why) has China not used these ‘anti-suit injunctions’ before? Is there some new Chinese law that enables these injunctions, or some high-level Chinese court decision, setting precedent etc.?

This tool (which is not unknown to intellectual property litigation in other countries with Western style legal systems, but new to China's legal system) is the result of a landmark 2019 court case in China that established a five part test for issuing one, which is the original precedent for issuing such orders in Chinese cases.

The case of Huawei v. Conversant (2019) Zui Gao Fa Zhi Min Zhong 732, 733 and 734-1, a landmark case decided by China’s Supreme People’s Court, was the first-ever conduct preservation order as equivalent to anti-suit injunctions was issued in China’s IP-related litigation.

(Source)

The conceptual basis of a historical, Western, anti-suit injunction is to prevent a firm from filing lawsuits in multiple forums when a court in which jurisdiction and venue are proper has already assumed jurisdiction over the dispute between the parties.

In U.S. patent litigation, this fuels a race to the courthouse mentality with each party rushing to establish the controlling case in a friendly forum, which then controls the litigation.

But, in China, there are credible allegations that foreign companies subjected to these orders are not afforded due process, and that the orders are over broad.

Also, Chinese law appears to disallow some forms of relief for non-practicing entities (i.e. patent trolls) when similar limitations are not present in U.S. or E.U. patent law (at least to the same degree).

For example, in one recent case:

The Wuhan Intermediate Court found InterDigital to be a nonpracticing entity (NPE), specializing in patent licensing and litigation but disengaged from the manufacture and sale of standard essential patented products [SEPs]. InterDigital was found to have promised to license its SEPs under fair, reasonable and non-discriminatory (FRAND) principles. InterDigital and Xiaomi engaged in FRAND licensing discussions from May 2017 and up to June 2020. On June 9, 2020, Xiaomi filed the instant action in the Wuhan Intermediate Court, which was instituted because:

1. There existed a contractual relationship between Xiaomi and InterDigital in view of their offers and counteroffers exchanged in licensing negotiations under FRAND principles;
2. Xiaomi prayed to the court in the instant action to adjudicate based on FRAND principles as well, despite earlier breakdown of FRAND negotiations with InterDigital; and
3. Jurisdiction and venue are proper, as Xiaomi is Chinese and its affiliate is domiciled in Wuhan, China.

The SEPs in this particular case are patents that one must license in order to legally produce 3G and 4G mobile devices.

When nonpracticing entity owns a patent that locks up an entire line of products, Chinese patent law requires that these patents be licensed on a "fair, reasonable and non-discriminatory (FRAND)" basis to all comers, preserving the economic benefit of the patent for companies that want to make that kind of product, but not the ability to decide which companies in the market will and will not be allowed to participate in that market. So, an NPE can't simply get an injunction against using a patent against a firm that is trying to get a FRAND license of its SEPs from it.

Other cases, of course, could have other reasons, but the reason for the sudden explosion of this litigation on the Chinese intellectual property scene is the Huawei v. Conservant case decided in 2019.