CHINA – ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS

ARBITRATION UNDER ARTICLE 25 OF THE DSU

AWARD OF THE ARBITRATORS

TABLE OF CONTENTS

1   INTRODUCTION.. 7

2   ARGUMENTS OF THE PARTIES. 11

3   ARGUMENTS OF THE THIRD PARTIES. 11

4   ANALYSIS OF THE ARBITRATORS. 11

4.1   Issues on appeal 11

4.2   Measures at issue. 12

4.3   Order of analysis. 13

4.4   Claim under Article 3.2 of the DSU concerning the "measure at issue" 14

4.4.1   Introduction. 14

4.4.2   Whether the Panel erred in applying the legal standard for determining the existence of an unwritten measure. 15

4.4.3   Conclusion. 20

4.5   Claim under Article 1.1, first sentence of the TRIPS Agreement 20

4.5.1   Introduction. 20

4.5.2   Whether the Panel erred in its interpretation of Article 1.1, first sentence of the TRIPS Agreement 22

4.5.3   Conclusion. 26

4.6   Claim under Article 28.1, read in conjunction with Article 1.1, of the TRIPS Agreement 27

4.6.1   Introduction. 27

4.6.2   Whether the Panel erred in its interpretation of Article 28.1, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement 28

4.6.3   Completion of the analysis. 29

4.6.4   Conclusion. 33

4.7   Claim under Article 28.2, read in conjunction with Article 1.1, of the TRIPS Agreement 33

4.7.1   Introduction. 33

4.7.2   Whether the Panel erred in its interpretation of Article 28.2, read in conjunction with Article 1.1, of the TRIPS Agreement 34

4.7.2.1   Whether the Panel erred in deciding to focus exclusively on Chinese patents. 34

4.7.2.2   Whether the Panel erred in interpreting what the right to conclude licensing contracts entails. 35

4.7.3   Completion of the analysis. 36

4.7.3.1   Introduction. 36

4.7.3.2   Is there a sufficient evidentiary basis to complete the analysis?. 37

4.7.3.3   Has the European Union demonstrated that the ASI policy is inconsistent with Article 28.2, read in conjunction with Article 1.1, first sentence?. 41

4.7.4   Conclusion. 44

4.8   Claim under Article 44.1, read in conjunction with Article 1.1, of the TRIPS Agreement 45

4.8.1   Introduction. 45

4.8.2   Whether the Panel erred in its interpretation of Article 44.1, read in conjunction with Article 1.1, of the TRIPS Agreement 46

4.8.3   Conclusion. 46

4.9   Claim under Article 41.1 of the TRIPS Agreement 46

4.9.1   Introduction. 46

4.9.2   Whether the Panel erred in its interpretation of Article 41.1 of the TRIPS Agreement 48

4.9.3   Whether the Panel erred in its application of Article 41.1 of the TRIPS Agreement 49

4.9.4   Conclusion. 50

4.10   Claims concerning the five individual ASI decisions. 51

4.11   Claim under Article 63.1 of the TRIPS Agreement 52

4.11.1   Introduction. 52

4.11.2   Whether the Panel erred in its interpretation of Article 63.1 of the TRIPS Agreement 53

4.11.3   Whether the Panel erred in its application of Article 63.1 of the TRIPS Agreement 56

4.11.4   Conclusion. 58

5   Award findings. 59