CHANG TSI
Insights
In July 2026, China's IP legal system saw parallel acceleration in legislation and adjudication. The State Council's executive meeting approved the Intellectual Property Protection and Utilization Plan for the 15th Five-Year Plan (2026-2030), setting the pace for legislative and enforcement work over the next five years. Meanwhile, foundational laws such as the E-Commerce Law and the Regulations for the Implementation of the Copyright Law began systematic revision, and a nationwide data property registration system was launched on a pilot basis. In the courts, a strict line on bad-faith litigation and repeat infringement held, reinforced by the Supreme People's Procuratorate's release of typical cases in the same area, with the principle of good faith carrying increasing weight in both validity and enforcement proceedings.. Evidentiary rules, trademark use standards, and copyright boundaries relating to AI also took clearer shape through a wave of rulings.
A State Council executive meeting this month approved the Intellectual Property Protection and Utilization Plan for the 15th Five-Year Plan Period (2026–2030). It sets four priorities — closing gaps in the legal framework, speeding up the enactment, amendment, repeal and interpretation of laws, deepening reform of how rights and revenues are allocated, and building an end-to-end talent pipeline — and sets the pace for IP legislation and enforcement over the next five years.
The same month brought a draft amendment to the Regulations for the Implementation of the Copyright Law, its first comprehensive revision in over a decade. As the key implementing regulation following the third amendment to the Copyright Law in 2020, the draft refines the definition of a work and rules on ownership, sets out how adaptation rights in audiovisual works are licensed and how remuneration under statutory licenses is to be paid, and strengthens protection of technological measures and rights management information, while implementing related international treaty obligations—marking a milestone in modernizing and internationalizing China's copyright regime.
The E-Commerce Law began its first systematic revision in seven years, expanding the scope of platform liability and raising the maximum fine to RMB 5 million (approx. USD714,000), providing clearer grounds for handling IP disputes on e-commerce platforms.
The National Data Administration (NDA) issued the Guidelines for Data Property Registration (Trial), establishing a nationwide unified framework for establishing ownership in data assets. Registration certificates may serve as proof of ownership in data transactions, in recognizing data on the balance sheet for financing purposes, and in ownership disputes.
Three further instruments round out the month. The Measures for the Administration of Commercial Mediation Organizations took effect, offering a more credible non-litigation route for resolving IP disputes. The revised Measures for the Administration of the List of Seriously Illegal and Dishonest Entities in Market Regulation formally brought intentional IP infringement, abnormal patent filings, and bad-faith trademark registration into the scope of credit sanctions. And the Measures for the Administration of Online Marketing of Financial Products, issued jointly by eight authorities, restrict the misuse of "finance", "securities" and similar wording at the trademark stage.
Taken together, the month's Legislation shows two patterns: coordination across sectors, and an increasingly tight coupling between credit regulation and IP enforcement.
The Supreme People's Procuratorate released five model cases on combating bad-faith IP litigation, setting out how "bad faith" is to be assessed by reference to defects in the underlying right, trademark hoarding and the plaintiff's motive in bringing lawsuit.
The Supreme People's Court, through a series of rulings on Dapagliflozin crystal patents, confirmed that inventiveness of drug polymorphs should be assessed under the general "three-step" test, correcting lower courts' earlier practice of finding inventiveness based solely on technical effect.
Reference cases in the People's Court Case Database released the same period also clarified that in software copyright disputes, a counterclaim—where does not fall within another court's jurisdiction—should be heard together with the main claim, to avoid splitting one dispute into multiple proceedings.
The Shantou Intermediate Court applied punitive damages to a defendant who resumed trademark infringement after a settlement, the nationwide first such application since the new judicial interpretation took effect, confirming that neither settlement nor a prior judgment shields a party from liability for repeated infringement.
On the legislative front, the Administrative Measures on Internet-based Information Services was opened for a second round of public comment, adding a dedicated section on "intelligent information services" and setting out labelling obligations for AI-generated content, responding to the increasingly urgent need for AI governance rules.
Courts are also refining how AI-related IP disputes are assessed. In a case concerning an AI-generated illustration, Guangzhou Internet Court established rules for reviewing AI-detection reports as evidence: such reports may be admitted as private documentary evidence but carry limited probative value, and the rights holder needs to prove the creative process and personal creative choices.
In a trademark case involving "Xiao Ai Tongxue," the court held for the first time that use of a mark as an AI voice-assistant wake word constitutes "use" under trademark law, and recognized the mark as well-known with cross-class protection—offering guidance for trademark strategy in voice-interaction contexts.
In the US, a court gave final approval to Anthropic's USD 1.5 billion copyright settlement with a group of authors, clarifying that the "transformative nature of training" and "the legality of how the training data was obtained" are two separate issues—a legal training purpose does not mean pirated source material may be obtained.
At the same time, AI is being put to commercial use in the entertainment industry at speed.
This month the Suzhou Intermediate People's Court issued a first-instance decision in a trademark infringement suit brought by a well-known international luxury brand against a new-style tea chain, awarding RMB 10.3 million (approx. USD1.5 million). The dispute turned on whether the defendant's graphic elements were confusingly similar to the plaintiff's classic mark. The judgment is not yet public, and the defendant has signaled an appeal. The case revives the question of how far protection extends to severable elements within a composite mark — one worth watching for international brands weighing filing and enforcement strategy in China.
The same month, the European Commission fined AliExpress, a unit of Alibaba, EUR 550 million—the largest penalty issued under the Digital Services Act to date—primarily over inadequate policing of counterfeit goods on the platform, signaling a shift in EU regulatory focus toward operational compliance in practice.
Takeaways for Rights Holders:
Across legislation, adjudication and AI rulemaking, rules that had been developing separately are moving into alignment. Three points follow for rights holders.
Prepare the rights basis before enforcing. The Procuratorate's cases show how the underlying right, filing history and motive will be examined. Legitimate rights holders are not the target, but they need to be able to show it on the record — audit the rights basis and use evidence before a campaign, not after a challenge.
Document AI-assisted creation as it happens. Prompt records, revision logs and original files belong in routine asset management. Where detection reports carry limited weight, the burden of showing the creative process falls on the rights holder, and that record cannot be rebuilt later.
Draft settlements against repeat infringement. The Shantou judgment awarded punitive damages against an infringer that resumed after settling — the first since the interpretation took effect. Settlement terms should record the admission, define repeat conduct, and preserve the punitive damages claim, so a second round starts from a stronger position, not a clean slate.
