Original Title: The Good Days for Those Who "Copy Layouts" Are Coming to an End!
If you ask a chip designer what they fear most, the answer is often not tape-out failure, but rather, "I spent three years drawing the layout, only to have it copied overnight."
Layout-design is the "soul blueprint" of the physical layer of a chip, determining how transistors are placed, how interconnects are routed, and how signals avoid crosstalk. For a long time, this "soul blueprint" lived like an illegitimate child in China's legal system: it had a name but no status; it had rights but no teeth.
It was not until August 2026, when the authorities announced the decision to revise the Regulations on the Protection of Layout-Designs of Integrated Circuits, that the entire semiconductor industry truly realized: the era of protecting intellectual property is finally no longer just a slogan. This document marks the first systematic overhaul in 25 years.
The revised Regulations on the Protection of Layout-Designs of Integrated Circuits will come into effect on October 15, 2026. This is the first systematic overhaul of the regulations since their promulgation in 2001, a full 25 years later. The full text consists of 6 chapters and 54 articles, simultaneously exerting efforts across four dimensions: protection boundaries, registration rules, infringement penalties, and achievement transformation. It can be described as equipping China's chip industry with a brand-new intellectual property "operating system".
01. A "System Upgrade" 25 Years in the Making
To understand the impact of this revision, one must first figure out where the old regulations were "stuck".
In 2001, China had only a handful of 8-inch wafer fabs, and chip design companies were even rarer. The core task of the legislators at that time was to "establish rules first," and the objects of protection were cautiously limited to "semiconductor integrated circuits" (ICs), which are the chips we are most familiar with that use electronic signals for transmission and computation. This was completely reasonable at the time, because the chip world back then indeed had only this one "way to play".
But the world does not wait.
Twenty-five years later, Moore's Law has hit a physical ceiling. Transistor processes are approaching the 1nm limit; scaling down further is no longer a matter of "process difficulty" but "physical impossibility".
The entire industry has been forced to "switch tracks": silicon photonic chips use photons instead of electrons to transmit signals, increasing speed by a hundredfold and drastically reducing power consumption; quantum chips use qubits to subvert classical computing logic, tackling "hellish difficulty" problems such as cryptography cracking and material simulation; and there are also processing-in-memory, 3D stacking, and Chiplet interconnects...
These new technologies share a commonality: they are no longer purely "electronic," but rather a new species mixing optics, electronics, and quantum mechanics.
The awkwardness lies here: the scope of protection in the old regulations was strictly nailed to the five words "semiconductor integrated circuits," while frontier innovation has precisely broken out of this frame. In practice, the China National Intellectual Property Administration (CNIPA) could only rely on "case-by-case review" to patch things up, conducting temporary assessments and handling photonic and quantum layout-designs on a special-case basis.
This "patching" model can support an occasional application or two, but it cannot support an entire industry. Since 2022, applications for layout-designs containing photonic and quantum devices in China have begun to increase significantly, and after 2024, they have shown a trend of scaled declarations. If the legislation is not revised again, it will not be escorting the industry, but dragging it down.
The layout-design of a chip is the "deployment map" of billions of transistors on a silicon wafer. It determines how fast the chip can run, how much power it consumes, and what tasks it can perform. Designing an original layout often requires a team of hundreds, an investment of over 100 million RMB, and several years of time; whereas copying it only requires decapsulating the chip, taking a few microscopic photos, and altering a few interconnects. This asymmetry of "extreme difficulty in reinventing the wheel and extreme simplicity in copying it" is precisely one of the deepest hidden pains of China's semiconductor industry over the past two decades.
The most decisive cut in the new regulations is adding a separate sentence after the definition of "integrated circuit" in Article 3: "The layout-design of integrated circuits integrating photonic, quantum, and other functions may be protected in accordance with the provisions of these Regulations." According to the supporting interpretation by the Ministry of Justice, the legislators simultaneously deleted the narrowing term "semiconductor integrated circuits" from the old regulations, but the technical baseline of "using semiconductor materials as substrates" remained completely unchanged.
From "semiconductor integrated circuits" to "electronic functional circuits on semiconductor substrates + integrated photonic/quantum functional circuits," legislators have announced that China's protection of IC layout-designs has officially stepped into the "post-Moore era" by deleting the old term and adding a preamble.
*Original Text of the Regulations on the Protection of Layout-Designs of Integrated Circuits (2026 Revision)
Source: China National Intellectual Property Administration (CNIPA)
02. A "Double-Edged Sword" for Practitioners
If expanding the scope of protection is issuing an entry ticket to the "new track," then the newly added "originality declaration" system is redrawing the rules of the game for all practitioners. This provision is the most subtle and easily underestimated change in this revision.
Although the old regulations required layout-designs to possess "originality" to be protected, they never clarified "where exactly the originality lies."
Applicants submit a bunch of layout files, the registration succeeds, but "which part exactly am I protecting" has always been a muddled account.
The result is: during rights protection, the right holder can temporarily "highlight the key points." Look, this part of mine is original; the infringing party, on the other hand, will counter that you never said this part was original during registration, and now you are adding drama at the last minute.
Caught in the middle, courts often have to spend a lot of energy first figuring out "what exactly is protected" before discussing "whether there is infringement." The famous "Juruian Case" of Juquan suing Ruinengwei is a typical example: the two parties argued for four years over the layout of the connection between two ground rails and the layout of the booster circuit. After the first and second instance trials, the compensation amount dropped from the claimed 15 million RMB to 3.2 million RMB. The right holder was not necessarily satisfied, and the infringing party was not truly deterred.
The solution in the new regulations is very direct: when applying for registration, you must submit an "originality declaration," clearly stating in black and white which area of this layout is original, what the design points are, and what functions they correspond to. This is like the "claims" in the patent system, translating the abstract "I am very creative" into a precise map that can be examined, compared, and used as evidence.
For practitioners, this "double-edged sword" cuts in two directions.
On the good side, it means "more stable protection". In the past, your rights boundaries were blurry, and you might not even be able to prove it when others stepped on your territory; now you draw your own "sphere of influence" during registration. In future rights protection, judges can just compare it with the declaration to know who is right and who is wrong, greatly increasing efficiency.
Especially during IP licensing, technology transfer, and chip pledge financing, buyers and investors can finally see clearly what exactly you are selling and how much it is worth, without having to rely on "feelings" and "trust" to do tens of millions in business.
On the difficult side, it means "higher thresholds". Drafting an originality declaration is not just filling out a form; it requires the applicant to have a profound technical understanding of their own design and to understand legal language. Which parts are worth declaring, how large the scope of the declaration should be, and how the wording should be written will all directly affect the rights boundaries for the next ten years.
In other words, if the declaration is written too narrowly, the scope of protection shrinks; if written too broadly, it is easily knocked down by opponents using the revocation procedure.
This is equivalent to shifting the "rights protection cost" from the back end to the front end. In the past, you only had a headache when going to court; in the future, you have to think it through when submitting the application. It is foreseeable that agencies and law firms specializing in layout-design registration will usher in a wave of business explosion, and the "value" of in-house legal and IP teams will also rise accordingly.
This reminds me of a legal brother I know at a leading domestic SiC fab, who is a "dual-certified warrior" with both a patent agent qualification and a legal professional qualification. Seeing the new regulations come out, my first reaction was: the spring for us legal professionals has finally arrived, and he must treat us to a meal.
Alas, I am untalented; I also studied law in my undergraduate years, but unfortunately, now I can only run around the market and type articles on public accounts.
03. Infringement Compensation: From "Plugging Holes" to "Real Pain"
In the past, many chip companies dared to "take shortcuts," and the core reason comes down to two words:
Cheap.
Under the framework of the old regulations, the logic of infringement compensation is "filling the gap," meaning I compensate you for however much you lost. However, the losses from chip layout infringement are extremely difficult to calculate precisely, and courts often can only award a "seemingly reasonable" figure at their discretion.
The case of Juquan Optoelectronics suing Ruinengwei is a landmark layout-design infringement case after the 2001 regulations. Juquan claimed rights over the layout-design of the ATT7021AU energy measurement chip, alleging that Ruinengwei's RN8209/G chip copied two original parts—the "digital/analog ground rail connection" and the "independent booster circuit"—for commercial sales. The first instance by the Shanghai No. 1 Intermediate People's Court awarded 3.2 million RMB in compensation, which was upheld in the second instance.
The court made it clear: the space for layout innovation is limited, and infringement determination requires strict comparison; any original part is protected regardless of its size; partial copying + commercial use + non-reverse engineering constitutes infringement; however, compensation is determined at discretion based on the contribution of the copied part, so the plaintiff's claim of 15 million RMB only resulted in 3.2 million RMB.
In the Shanghai "Juruian Case," the right holder claimed 15 million RMB, and the final compensation was 3.2 million RMB, which was already a relatively high amount in similar cases at that time. For the infringing party, this amount of money might not even be as much as the profit from one successful tape-out.
When calculating it all, "copy once, compensate once, and continue selling" actually turned out to be a profitable account. This vicious circle of "cost of violation < benefit of infringement" is precisely the breeding ground for the long-standing phenomenon of "bad money driving out good."
The new regulations have completely rewritten this account. It introduces a compensation system in the same lineage as the Patent Law: first calculate based on the actual loss of the right holder or the profit of the infringer; if it cannot be calculated clearly, reasonably determine it by referencing a multiple of the licensing fee; the most ruthless move is that for intentional infringement with serious circumstances, punitive damages of 1 to 5 times apply.
Original Text of the Regulations on the Protection of Layout-Designs of Integrated Circuits (2026 Revision)
Note the wording here: "intentional" plus "serious circumstances." This means the law does not punish unintentional similarities, but if there is evidence showing that you clearly knew about others' layout-designs and deliberately copied them for commercial use, then sorry, what awaits you is not just "compensating once," but "continuously paying the bill" at several times the licensing fee, and it may even be compounded by administrative penalties and the collapse of business reputation.
To summarize simply: in the past, the cost of copying a layout ≈ one compensation ≈ a few million; in the future ≈ multiple times the licensing fee × duration of continuous infringement, easily reaching tens of millions or even higher.
This has diametrically opposite impacts on two types of practitioners. For original design companies, this is the long-awaited "weapon upgrade," and your R&D investment finally has a moat to match it.
For follower companies that rely on reverse engineering and quickly follow up with "minor revisions," it is an interrogation of their survival logic: the cost of "taking shortcuts" under the old model is no longer controllable from now on.
Either transform to do true original work, or find a survival space in niche markets that does not rely on infringement; in short, the end of the road of "low-cost copying" has been blocked by the legislators.
04. Completing the "Rules of the Game"
In addition to the above major moves, the new regulations have several other changes. They may seem inconspicuous individually, but together they complete the "skeleton" of the entire system.
First, the introduction of the "revocation upon request" procedure. Under the old regulations, if a layout-design was found not worthy of protection after registration (e.g., it was actually a conventional design or lacked originality), only the CNIPA could proactively initiate revocation, and third parties could only "make suggestions."
The new regulations change this so that anyone can request revocation, and once the registration is revoked, the exclusive right is "deemed not to have existed from the beginning."
This logic is highly similar to the patent invalidation declaration procedure, meaning that layout-design registration is no longer a "get-out-of-jail-free card," but a right that can be publicly challenged. For practitioners, this is both a constraint and a protection: you no longer dare to use "shoddy" registrations to scare people, but when facing others' "shoddy" registrations, you also have a legal channel to crack them.
*Original Text of the Regulations on the Protection of Layout-Designs of Integrated Circuits (2026 Revision)
Second, the addition of the "restoration of rights" procedure. If rights are lost due to a delay in the time limit caused by force majeure or justified reasons, restoration can be requested. This is a very friendly "fault-tolerance mechanism" for practitioners. After all, chip R&D cycles are long and full of variables; losing exclusive rights due to a single negligence would be too costly.
Third, the improvement of confidentiality requirements. The new regulations make it clear that, except for state organs performing their duties according to law, no one may access or copy the electronic version of the layout-design, and legal liabilities for leakage are also stipulated. This is a reassurance for design companies: the layout files you submit are full of core trade secrets. In the past, it was inevitable to worry that "registration = leakage," but now the law guards this door for you.
05. Engineers' Wallets Are Also Recognized
A long-neglected issue is: chips are the product of team efforts, but the exclusive right to layout-designs is often registered under the company's name. So, how much can the engineers who actually stay up late drawing layouts get from this?
The old regulations did not mention this at all. The new regulations finally make up for this lesson: legal persons or non-legal person organizations shall, in accordance with the Law on Promoting the Transformation of Scientific and Technological Achievements and relevant state regulations, give reasonable rewards and remuneration to eligible personnel.
How exactly is it divided? If there is an agreement, follow the agreement; if there is no agreement, refer to the existing standards in the Law on Promoting the Transformation of Scientific and Technological Achievements. In the absence of an agreement, in practice, it is usually distributed to technical personnel at more than 50% of the net income from transfer and licensing, or more than 5% of the operating profit for 3 to 5 consecutive years of self-implementation.
Do not underestimate this provision. It solves the "last centimeter" problem in the innovation incentive chain: no matter how good the top-level design is, if frontline engineers feel that "the company making money has nothing to do with me," their motivation will be discounted. Linking the commercial success of layout-designs with the personal income of creators is an institutional arrangement that activates "people," the most core factor of production, from the root.
For individual practitioners, this means your value is no longer only reflected in your payslip, but may also be reflected in tangible commissions and equity.
06. Silicon Carbide Under the New Regulations
Alright, after talking so much, let's return to our silicon carbide (SiC).
However, if we put this revision into a specific niche track to observe, silicon carbide is indeed a case particularly worth discussing separately.
The reason is not that it is a newly added object of protection in this legislative amendment; on the contrary, SiC power devices, as integrated circuits using semiconductor materials as substrates and performing electronic functions, have always been within the coverage of the layout-design protection system. This amendment did not "open the door" for it.
What is truly interesting is that several general rules introduced in this revision—the originality declaration, punitive damages, and revocation procedure—when applied to the SiC track, produce chemical reactions that are far more intense than when applied to ordinary digital chips.
There is an essential difference between the layout-design of SiC devices and traditional silicon-based chips: its performance advantages come more from the wide bandgap characteristics of the material itself and the special cell structure design, rather than complex metal interconnection layers.
In other words, the "layout" of SiC is often simpler and more regular, making it seem easier to imitate.
But it is precisely this "simplicity" that makes the determination of originality exceptionally tricky.
For a typical SiC MOSFET, the cell pitch, JFET region width, and shape of the source contact hole—even a difference of microns or even sub-microns—can bring about huge differences in breakdown voltage and on-resistance.
This sensitivity of "a miss is as good as a mile" makes the drafting of originality declarations for SiC layout-designs far more difficult than for ordinary digital chips. What you need to prove to examiners and judges is not "I drew a different line," but "hidden in this seemingly ordinary combination of geometric shapes is an optimal solution obtained after countless simulations and tape-out verifications."
This poses extremely high requirements for the IP management capabilities of SiC design companies.
On the other hand, the SiC industry is currently in a critical stage of transitioning from 6-inch to 8-inch substrates and penetrating from high-end automotive grades to civil scenarios such as photovoltaic and energy storage, with increasingly fierce price competition.
In such a market environment, the high-pressure stance of the new regulations against infringement will objectively accelerate the reshuffling of the industry: the survival space of "second-source" players who rely on reverse-engineering competing devices, fine-tuning dimensions, and shipping at low prices will be drastically compressed; while companies that truly have original accumulation in cell topology, terminal structures, and gate oxidation processes will have the opportunity to gain stronger bargaining power in automotive grade certification and customer access negotiations by relying on clearer rights boundaries.
07. Who Benefits and Who Is Under Pressure?
Superimposing all the above changes, a "reshuffling map" of the industrial landscape gradually becomes clear.
The biggest beneficiaries are those at the very forefront. Design companies working on silicon photonic interconnects, quantum chips, and 3D heterogeneous integration have lived in the shadow of "uncertain legal protection" in the past, and now they finally have a clear rights foundation.
For them, the new regulations are not just "adding a layer of protection," but making the entire business model viable. Investors dare to invest, customers dare to buy, and overseas cooperation dares to be discussed, because the underlying IP stands firm.
IP suppliers and EDA tool vendors also welcome the benefits. The originality declaration system makes the rights boundaries in IP licensing contracts clearer, making evidence collection more direct when disputes occur in the future. A mature IP market needs clear property rights definition to operate, and the new regulations precisely provide this "cornerstone."
Those under the most pressure are the follower companies accustomed to "taking shortcuts". What they face is not a one-time fine, but the failure of the entire business logic—the cost of infringement becomes unpredictable and potentially extremely high, and the past "empirical formulas" are all scrapped.
Even packaging and testing factories are indirectly affected. Although the Supreme People's Court has already shown in precedents that packaging enterprises cannot be naturally presumed to "know" the rights status, under the general environment of strengthened protection in the new regulations, the compliance review obligation after receiving an infringement notice is actually increasing. Every link in the industry chain must re-evaluate its IP risk exposure.
08. Time Window Left for the Industry: About 70 Days
The new regulations will come into effect on October 15, 2026. From promulgation to implementation, the time left for the industry to conduct self-inspection and self-correction is about 70 days.
During these 70 days, I think smart corporate legal counsels need to do at least three things:
First, comprehensively inventory their own layout-design assets to see which ones should be registered and which ones need to supplement the originality declaration;
Second, investigate whether existing products might step on the "mines" of others' new rights scopes;
Third, establish or upgrade internal IP management processes, turning the drafting of originality declarations and infringement risk assessments into standardized actions.
Emmm... right, there is one more: think about how to ask the boss for a raise.
Brief Table of Important Contents and Significance of the 2026 Revision of the Regulations on the Protection of Layout-Designs of Integrated Circuits
09. From "Conservatives" to "Embracers of the Future"
Professor Guo He from Renmin University of China has a precise summary: deleting the words "semiconductor integrated circuits" is "absolutely not just a redundant abandonment at the level of legislative technique; more importantly, it demonstrates today's China's attitude towards intellectual property legislation—we are no longer conservatives in the intellectual property system. Stimulating innovation, focusing on the future, and embracing technological innovation with an open attitude have become the background color of China's intellectual property protection."
Source: Ministry of Justice
Twenty-five years ago, we carefully protected chips that we "could understand"; twenty-five years later, we hold our heads high to hold up a protective umbrella for frontier technologies such as photonics and quantum mechanics that we "haven't fully understood yet."
Behind this transformation is the identity switch of China's semiconductor industry from a "follower" to a "runner alongside" and even a partial "leader": only when your innovation is abundant and fast enough will you truly yearn for a strong intellectual property protection system.
For every semiconductor practitioner, the signal conveyed by the new regulations could not be clearer: this industry is transforming from a game of "whether you dare to copy" into a competition of "whether you can create".
Original creators will receive unprecedented respect and rewards, and the bill for copiers has finally been written to a number that truly makes them feel the pain.
This is perhaps the inevitable path for China's chip industry to mature: not just a technological breakthrough, but also institutional independence in rules.
References:
[1] Ministry of Justice
[2] China National Intellectual Property Administration (CNIPA)