In March 2026, China’s IP protection entered its annual strategic positioning phase—judicial rules for AI and deployment of Standard Essential Patents (SEPs) emerged as the hot topics. The Supreme People’s Court and the Supreme People’s Procuratorate, in their annual reports and during the National People’s Congress and Chinese People’s Political Consultative Conference sessions (Two Sessions), clarified the direction for adjudicating AI related cases, while the China National Intellectual Property Administration (CNIPA) issued its first dedicated guidance targeting SEP applications. The “front loading” embeds competitive planning into the early stages of innovation, requiring enterprises engaged in China’s AI and global standardization should conduct early legal risk assessments and align patent strategies accordingly.

I Legislative and Policy Upgrades

(1) Early SEP Deployment

CNIPA released the Guidelines for Invention Patent Applications Involving Standards, focusing on the communications sector but with methodology applicable to technology standards in AI, IoT, and other fields. The Guidelines propose a deployment strategy that coordinates three institutional tools—priority rights, novelty grace periods, and deferred examination—with the standardization cycle, reflecting that SEP competition has shifted from the licensing stage to the application stage. This sends a signal that China is strengthening the strategic nature of patent deployment in global standardization and technological competition through institutional design.

(2) Implementation of the New Anti-Unfair Competition Law

The State Administration for Market Regulation issued the Notice on Further Implementing the Anti Unfair Competition Law, sending regulatory signals in five areas: the implementation of extraterritorial application provisions, upgrading the regulation of online unfair competition to administrative regulations, systematic construction of a trade secret protection framework, clarification of platform responsibility boundaries, and governance of “rat race” competition. 

The Notice indicates that the Anti Unfair Competition Law has moved into the stage of full implementation, and will have a direct constraining effect on data rights protection, AI industry regulation, and market order.

(3) Future IP Legislative Trends and Plans

CNIPA released its 2026 legislative work plan, focusing on revising the Trademark Law and the Regulations on the Protection of Layout Designs of Integrated Circuits, drafting new Geographical Indication Regulations, and adjusting the Measures for Patent Priority Examination and the Measures for the Administration of Patent Agency. Over the next five years, China will focus on strengthening IP systems and advancing high‑end brand development.

During the “Two Sessions” in March, proposals concentrated on four directions:

(1) AIGC copyright rules and IP boundaries for digital humans; 

(2) Trade secret and talent protection; 

(3) Enforcement efficiency (such as shifting the burden of proof, punitive damages, and special IP procedural law); and 

(4) The institutional improvements (including the pharmaceutical patent system and photovoltaic patent pool construction).

II Annual Work Reports and AI Protection of the Supreme Court and Supreme Procuratorate

The 2025 annual work reports of the Supreme Court and Supreme Procuratorate show that courts concluded 496,000 IP cases, vigorously targeting trade secret infringement and malicious batch litigation, while prudently handling AI related cases; procuratorial organs prosecuted 19,000 individuals for IP crimes, focusing on sanctions against infringement in trade secrets, data security, and AI. 

In addition, The Beijing People’s Procuratorate established an Intellectual Property Prosecution Department to unify criminal, civil, administrative, and public interest litigation functions.

The Supreme Court is drafting judicial policy for AI related IP, which will clarify rules for determining originality standards for AIGC, the legal nature of data training activities, and platform duty of care. 

The Supreme Court also pointed out that current AI disputes mainly include AIGC copyrightability, legality of model training, and responsibility attribution. The court emphasizes China’s consistent stance on protecting human intellectual achievements.

III Selected Cases Showing Balanced Approach to Innovation

Several new cases demonstrate the diversified balance in China’s judicial approach to innovation protection, infringement sanctions, and alignment with international rules:

• China's first case on AI‑Generated Images Lacking Originality: The court held that images generated entirely by an algorithm, based solely on single abstract prompt without parameter adjustments or personalized modifications, do not reflect human originality, intellectual effort, or individualized expression, and therefore do not constitute a work protected under the Copyright Law. This case was selected as the Top Ten Nominated Cases of 2025 by the Supreme Court and China Media Group in March, reflecting China’s judicial stance on AI.
• China’s first copyright case involving Ferris wheel architectural works: The atypical large frame design of the Ferris wheel was deemed original and artistic, constituting an architectural work. To avoid major resource waste from dismantling, the court did not support injunctive relief and awarded damages only.
• Trademark infringement via live streaming counterfeit sales: The Shandong High Court ruled that large scale sales of counterfeit “F” series clothing via live streaming constituted trademark infringement, applying punitive damages based on profits to award RMB 6 million.
• First cross border data flow case: The Hangzhou International Commercial Court clarified that under EU REACH regulations, costs for data supplementation should be borne by the beneficiary’s principal, offering compliance guidance for international corporate cross border data operations.
• Typical pharmaceutical patent linkage case: The Supreme Court confirmed that a generic drug “Type I statement” can be changed to protect the patentee’s litigation rights, highlighting the importance of procedural remedies under the pharmaceutical patent linkage disputes.

Taken as a whole, this month’s developments show that China’s IP regime is accelerating towards a “front loaded rules and industrial synergy” model, especially in the strategic deployment of AI and SEPs. International enterprises should proactively assess legal risks and deployment capabilities when participating in China’s AI innovation and standardization, and build cross team collaboration mechanisms to secure compliance and competitive advantages.

Currently, China is in a concentrated period of formulating and issuing new adjudication rules. Enterprises can begin with three key actions:

• Assess alignment between China patents and relevant standards, adjusting filing plans accordingly;
• Implement content and data compliance reviews for AI related operations;
• Track new precedents in cross border data and pharmaceutical patents, updating internal response protocols.