Looking Ahead: Overseas Intellectual Property Services

"Regulations of the State Council on Foreign Investment" to Take Effect on July 1st

China’s first-ever administrative regulation specifically addressing foreign investment has arrived. Recently, the Regulations of the State Council on Foreign Investment (hereinafter referred to as the "Regulations") were promulgated and will take effect on July 1st. The Regulations stipulate that the state will improve comprehensive overseas service systems, promote the integration of trade and investment, and enhance institutional measures from multiple dimensions to provide strong legal protection for enterprises going global to participate in international cooperation and competition. Intellectual property (IP) services form an important part of this framework. Work related to IP consulting, rights protection, dispute resolution, monitoring and early warning, risk assessment, and other aspects are playing an increasingly significant role in foreign investment.

"Intellectual property has evolved from a specialized legal issue in a company’s overseas operations into a critical factor influencing investment decisions and outcomes," said Huang Hui, a member of the National Intellectual Property Expert Advisory Committee and a partner at Wan Hui Da Law Firm, in an interview with a reporter. He noted that in recent years, an increasing amount of foreign investment essentially involves the international allocation of technology, brands, data, and business models. The IP risks and challenges associated with foreign investment have also changed markedly. The Regulations explicitly provide for IP public services and specialized services, which he described as highly targeted and relevant.

Throughout the Entire Process of Foreign Investment

Lu Haijun, a professor and doctoral supervisor at the University of International Business and Economics Law School, explained that foreign investment typically takes the form of direct investment, including equity participation, greenfield investments, establishment of branch offices, and sole or joint participation in resource development projects in the host country. Many of these involve IP issues. For example, equity participation or mergers and acquisitions require IP compliance investigations and assessments of the target company. Greenfield investments and branch setups involve risks such as trademark squatting and differences in local IP laws and regulations.

IP often plays a crucial role in managing a company's foreign investment activities. The Enterprise Intellectual Property Protection Guide issued by the China National Intellectual Property Administration in 2022 makes clear that in technology companies, high-tech enterprises, pharmaceutical companies, and M&A projects aimed at acquiring a target company’s brand, technology, and the R&D personnel who hold that technology and IP, IP due diligence is an essential preparatory step before transaction negotiations. Furthermore, in investment and M&A projects, the valuation of the target company's IP can determine the success or failure of the entire transaction. After completing these two steps, disposing of the target company's IP becomes a key consideration for the enterprise.

In Huang Hui’s view, not only in the aforementioned M&A projects, but increasingly in many foreign investment projects, the transaction value and commercial value are primarily built on intangible assets such as IP. IP is a major consideration in investment decisions.

"IP work runs through the decision-making, execution, and operational phases of foreign investment," Huang Hui noted. During the decision-making phase, companies need to understand the IP status of the target company or market, identifying legal risks and commercial value through due diligence and valuation. If investing with their own IP, they must arrange for registration of that IP in relevant jurisdictions. During the execution phase, issues such as technology transfer, brand licensing, and allocation of R&D results often arise, requiring proper management of IP allocation and administration across different entities and legal systems. During the operational phase, companies face issues such as overseas trademark and patent portfolio development, trade secret protection, and handling of infringement disputes, ensuring that IP measures sustainably support their overseas operations.

Moving Services Forward Is Imperative

The Regulations stipulate that people’s governments at or above the provincial level and their relevant departments shall enhance public service capacity and levels, providing investors with public goods and services in areas including IP. Specialized IP service providers shall expand their overseas service networks, improve their international service capabilities and standards, and provide high-quality specialized services to investors and their foreign investments.

In recent years, China has attached great importance to providing guidance and response services for overseas IP disputes at both the national and local levels. By the end of 2025, 99 overseas IP dispute response guidance platforms had been established across 30 provinces (autonomous regions and municipalities), along with six industry platforms focused on key sectors such as automobiles and photovoltaics, and overseas platforms in 11 countries. This has created a "domestic + overseas" two-way linkage network for rights protection guidance, involving nearly 2,000 expert participants. In 2025, these institutions cumulatively provided over 4,800 guidance and consulting services to enterprises regarding overseas e-commerce IP disputes, overseas trademark squatting, and other issues, recovering losses of 2.75 billion yuan.

However, many Chinese companies still tend to "get on the boat first and buy a ticket later" when it comes to IP issues in overseas investment.

Since 2019, the Capital Intellectual Property Services Association has been operating the Beijing (Zhongguancun) International Intellectual Property Service Hall, bringing together over 130 domestic and foreign IP service agencies to provide consulting and other services for companies going global. Gao Yongyi, the association’s Party Committee Secretary and Executive Vice President, told reporters that the Service Hall frequently encounters companies whose overseas expansion has been hindered by inadequate IP preparation, prompting them to seek help from professional agencies. Some of these are well-known companies that have recently expanded globally.

"Some companies expand their business overseas very quickly, and their overseas revenue grows rapidly, but their trademarks have not yet been registered in some countries, or they made mistakes in selecting the classes of goods and services. This makes it very difficult to protect their rights locally," Gao said. Trademark squatting and patent disputes occur frequently in the course of Chinese companies’ foreign investment, primarily due to a failure to prioritize IP.

The Regulations also mention that relevant State Council departments shall strengthen monitoring, early warning, and risk assessment of foreign investment, promptly issue information on the security situation of relevant countries (regions), alert investors to risks, and guide and assist investors in preventing security risks, thereby safeguarding national overseas interests and the legitimate rights and interests of investors. Industry associations, chambers of commerce, and trade and investment promotion organizations shall, in accordance with their charters, provide services related to foreign investment, including information consulting, market development, economic and trade exchanges, rights protection, and dispute resolution.

Lu Haijun explained that, in addition to public services for overseas IP disputes and public information services on overseas IP, some leading domestic law firms and IP agencies have begun to establish cross-border service capabilities by setting up overseas branches or forming cooperation mechanisms with local agencies. Moreover, many localities are experimenting with overseas IP insurance and other mechanisms to provide a safety net for companies facing IP issues abroad. However, he believes current services still have limitations: "Existing public services are mainly focused on dispute response and ex post rights protection, while services for ex ante investment risk assessment, due diligence guidance, and IP portfolio planning are insufficient."

"As more and more companies engage in foreign investment through M&A, establishment of R&D centers, brand internationalization, and other means, intellectual property is no longer just a protection issue — it is an investment decision issue." Huang Hui shares this view. He believes that the Regulations’ inclusion of IP in the foreign investment service system, with emphasis on IP public services, specialized services, and risk warning mechanisms, reflects a deepening understanding of the patterns of Chinese enterprises going global.

"What companies truly need to address is not just 'what to do if infringed,' but 'is this project worth investing in,' 'can I enter this market,' and 'can these technologies and brands truly create value.' Therefore, IP services in the foreign investment field should be moved further forward — from helping companies respond to risks to helping them identify risks; from supporting rights protection to supporting decision-making; from dispute resolution to asset management and value discovery," Huang elaborated. "The role of IP services will no longer be limited to legal safeguards but will gradually become an integral part of formulating and implementing corporate globalization and international operation strategies. For IP service providers, this is both a challenge and an opportunity."

"The IP service industry should cultivate internationally oriented talent, further enhance overseas service capabilities and standards, communicate policies to enterprises, continuously foster awareness of proactive IP portfolio planning, and provide front-end services," Gao Yongyi suggested.

"Going forward, we should build a system for deep understanding of the IP investment environment," Lu Haijun proposed. He recommended forming interdisciplinary comprehensive risk assessment teams to conduct systematic evaluations of the comprehensive IP investment environment in target destinations. Additionally, dynamic risk monitoring and prediction mechanisms should be established to continuously track policy changes in destination countries regarding foreign investment reviews, technology transfer, IP enforcement, and more. He also suggested exploring the preparation of in-depth assessment reports on the IP investment environment of target markets to provide substantive support for front-end decisions in foreign investment.