On July 23, 2026, China's State Council issued Decree No. 842, promulgating a fully revised Regulation on the Protection of Layout-Designs of Integrated Circuits ("the Regulation"), effective October 15, 2026. This is the first comprehensive revision since the Regulation's original 2001 promulgation. According to the Ministry of Justice and the China National Intellectual Property Administration (CNIPA), the revision follows three guiding lines: implementing the national IP strategy, addressing practical bottlenecks in registration, protection, and administration, and aligning with related domestic legislation and international treaties.

For any company designing, manufacturing, or licensing IC layout-designs in or into China, this is a structural overhaul, not a routine update. Below are the changes that actually matter, organized by theme, with a comparison table at the end.

1. Broader protection and broader foreign eligibility

Emerging technologies are now expressly covered. New Article 3 confirms that layout-designs for photonic and quantum-function integrated circuits can be protected under the same registration regime; the old Regulation had no such provision.

Foreign corporate entities are now expressly eligible. The old Article 3 granted protection only to layout-designs created by "foreign individuals." New Article 4 expands this to foreign enterprises and other foreign organizations as well, a meaningful broadening of who can claim protection.

2. Mandatory agency representation is now written into the Regulation

New Article 5, with no equivalent in the old Regulation, expressly requires that any foreign individual, enterprise, or organization without a habitual residence or place of business in China must appoint a licensed Chinese patent agency to file registrations and handle related layout-design matters. The same article imposes a confidentiality duty on the appointed agency regarding any undisclosed content of the client's layout-design.

In practical terms: for multinational companies without a China presence, working with a qualified agency is no longer just best practice; it is now a statutory requirement.

3. Registration examination shifts from formal to substantive good faith

• Article 20 (new): applications must be based on genuine, independent creative activity; fabrication is expressly prohibited.
• Articles 22 & 24 (new): a formal statement of originality is now a mandatory filing document, specifying exactly which design areas, features, and functions are original.
• Article 27 (new): a structured preliminary-examination procedure — applicants are notified and given a chance to respond or amend before rejection; failure to respond is deemed withdrawal.
• Article 30 (substantially expanded): previously, only CNIPA could invalidate a defective registration on its own initiative. Now any party can request invalidation of a registration that fails to meet the law's requirements.
• Article 31 (new): once invalidated, the exclusive right is deemed never to have existed, i.e. retroactive nullity.
• Article 33 (new): a rights-restoration mechanism — missed statutory or CNIPA-set deadlines caused by force majeure or other justified reasons can now be excused and the right restored. The old Regulation had no such relief.

4. From compensatory to punitive damages

The old Regulation simply provided that damages equal the infringer's gains or the rights-holder's losses, plus reasonable enforcement costs. New Article 46 rebuilds the entire framework:

• Damages are based on the rights-holder's actual losses or the infringer's illicit gains;
• where those are hard to establish, damages may be reasonably determined by reference to a multiple of the license fee;
• for willful infringement that is serious in nature, courts may award between one and five times that base amount as punitive damages;
• damages must also include the rights-holder's reasonable enforcement expenses.

This sits alongside a new Article 9, which formally introduces good-faith and antitrust principles: abusing the exclusive right in a way that excludes or restricts competition and constitutes a monopolistic act is now handled under the Anti-Monopoly Law. Consistently, the trigger for compulsory licensing was changed from "unfair competition conduct" to "monopolistic conduct" (Articles 39-40), aligning the whole framework with China's antitrust enforcement regime.

5. New commercialization tools

New Article 35 opens up meaningful commercial options:

• licenses must now be filed with CNIPA within 3 months of taking effect, a new compliance obligation with no equivalent under the old rules;
• a pledge (security interest) registration system for layout-design rights is introduced for the first time, opening a path to IP-backed financing;
• assignments to foreign individuals, enterprises, or organizations must follow specific procedures under relevant laws and regulations.

New Article 36 also fills a gap the old Regulation left open: default rules for co-owned rights. Absent agreement, each co-owner may use the design independently or license it non-exclusively, sharing any resulting royalties.

6. A reciprocity clause

New Article 53 allows China to take corresponding countermeasures against any country or region that imposes discriminatory prohibitions, restrictions, or similar measures on Chinese layout-design protection.

Old vs. New: key provisions at a glance

Three overlooked realities

Retroactive invalidation risk on existing registrations is now much larger. Once Article 30(2)'s third-party invalidation channel opened, the past two-plus decades of registrations obtained under mere formal examination — many filed in batches to qualify for High-and-New-Technology Enterprise status, government grants, or industry credentials, without a tight documented link to genuine creative activity — face a real prospect of being challenged by a competitor in a dispute, a tender, or a qualification review. Article 31's retroactive effect compounds this: once a registration is invalidated, the exclusive right is deemed never to have existed, meaning license fees already collected and damages already awarded under that registration could potentially be clawed back.

Punitive damages are unprecedented in scale, but the underlying calculation can still stall. Unlike the Patent Law or Trademark Law, Article 46 sets no statutory-damages fallback. Where actual losses, illicit gains, and license fees are all hard to establish, it is theoretically possible to have infringement established with no calculable damages figure. Chip infringement is already hard to evidence, which means license-fee evidence — existing license agreements, comparable transactions, industry rate ranges — needs to be assembled well before litigation, not scrambled together once a dispute starts.

Registration timing is itself a rights-securing strategy. Under the current (still-effective) Examination and Enforcement Guidelines (Trial), an application filed before first commercial use may include confidential information covering up to 50% of the layout-design's total area; an application filed after commercial use cannot include confidential information and must include an IC sample. In other words, “register first, commercialize later” can preserve confidentiality over up to half the design — reverse that order, and this protection is off the table.

What to do now

1. Audit your cross-border filing arrangements - confirm whether entities without a China presence are properly represented by a licensed patent agency under new Article 5.

2. Run a stability check on your existing registrations - verify that registered content actually maps to documented, genuine creative activity, especially for batch filings made to qualify for grants or credentials, and flag any that could be vulnerable to a third-party invalidation request or that might benefit from the new rights-restoration mechanism.

3. Preserve originality evidence - design records, version history, review notes - now that a formal originality statement is a mandatory filing document.

4. Assemble license-fee evidence in advance - existing license agreements, comparable transactions, industry rate benchmarks - to support a damages calculation if infringement ever occurs.

5. Review existing licenses and financing options - confirm whether current license agreements need recordal, and evaluate whether the new pledge system could support IP-backed financing.

6. Check for gaps in employee-inventor remuneration compliance - most IC design companies have remuneration policies for patents but not layout-designs, even though the relevant standards under the (already effective) Law on Promoting the Transformation of Scientific and Technological Achievements have been in force for years.

One clarification worth flagging: the 2-year filing-window rule itself is unchanged by this revision - old Article 17 is carried over verbatim as new Article 26. It is easy to overlook precisely because it isn't new, which is exactly why it belongs on your compliance checklist alongside the genuinely new requirements above.

One more thing worth flagging: the Implementing Rules and Examination and Enforcement Guidelines that accompany the Regulation are also being revised in parallel, and remain at the public-comment stage — not yet in effect. Requirements around drafting the originality statement and the mechanics of the invalidation procedure may be further refined once those are finalized. We are tracking CNIPA's official releases and will update this guidance accordingly.