China tightens chip design protection with higher originality bar, stiffer penalties

Published Aug 4, 10:00 AM UTC

China has revised regulations for integrated circuit (IC) layout designs, raising originality requirements and strengthening infringement penalties to curb copycat chip designs. The new rules, signed by Premier Li Qiang on July 23 and effective October 15, require applicants to demonstrate independent development, attest to originality, and specify creative contributions. Courts may now determine compensation based on rights holder losses or infringer profits, with punitive damages available. The regulations also clarify licensing, transfer, and collateral procedures, and mandate rewards for design personnel. Additionally, Chinese policymakers are considering measures to prevent strategic domestic technologies from being transferred abroad or produced overseas, which could force chipmakers to use domestic foundries like SMIC instead of TSMC or Samsung Foundry. The updated rules reflect China's strategic focus on its domestic semiconductor industry.