On July 23, 2026, Premier Li Qiang of the State Council signed State Council Decree No. 842, promulgating the revised Regulations on the Protection of Layout-Designs of Integrated Circuits (hereinafter referred to as the "Regulations"), which will take effect on October 15, 2026. The Regulations consist of 6 chapters and 54 articles. This marks the first systematic revision of the Regulations in over 20 years since their implementation on October 1, 2001.
In a press Q&A, the Ministry of Justice and the China National Intellectual Property Administration (CNIPA) clarified that this revision primarily involves expanding the scope of protection, improving the application and registration procedures, increasing compensation for infringement, and promoting the utilization of layout-designs. Combined with official interpretations and judicial practice, three clear industrial signals can be discerned.
Scope of Protection Expanded from "Semiconductor" to "Semiconductor + Photonics + Quantum": Legislation Responds to the Post-Moore Era Prior to the revision, the Regulations explicitly limited the objects of protection to semiconductor integrated circuits. After the revision, the term "semiconductor integrated circuits" was deleted from the provisions related to the definition of "integrated circuits," bringing the layout-designs of integrated circuits integrating photonics, quantum, and other functions into the scope of statutory protection.
The industrial background for this change is that the transistor process nodes of traditional integrated circuits are approaching their process and physical limits. As new technological pathways such as photonics and quantum technologies continue to emerge, the integrated circuit industry has entered the post-Moore era, where competition is driven by new architectures, new mechanisms, new materials, and new devices.
The subtext of the legislation is that China is no longer a conservative in the intellectual property system. Deleting the word "semiconductor" appears to be the removal of redundancy, but in essence, it sends a signal to next-generation circuit design companies in fields such as photonic computing and quantum chips: your layout-designs can now enjoy exclusive right protection domestically.
This directly impacts two types of enterprises: one includes IC design companies engaged in silicon photonics interconnects and Co-Packaged Optics (CPO), whose layout-designs previously existed in a gray area of protection; the other includes quantum chip R&D institutions, whose layout-designs now have a clear statutory basis for rights.
Originality Declaration System Addresses the Biggest Shortcoming of "Difficulty in Rights Protection" In over 20 years of judicial practice, the difficulty in defining the scope of protection for the exclusive rights of layout-designs has always been the most troubling issue for right holders. Guiding Case No. 218 of the Supreme People's Court (SPC) (Suzhou Sai Microelectronics Co., Ltd. v. Shenzhen Yu Microelectronics Co., Ltd.) clarified that obtaining a layout-design registration does not naturally mean that the registered layout-design content possesses originality; the right holder must still provide a reasonable explanation or description of the originality of the layout-design for which they claim rights. The revised Regulations specifically introduce an originality declaration system:
The copies or drawings submitted by the applicant shall contain the necessary information of the layout-design and be able to clearly show the parts of the layout-design that possess originality. The originality declaration shall specify the design areas, design points, and corresponding functions. The scope of protection for the exclusive right shall be based on the copies or drawings, and the originality declaration shall be used to interpret the original parts.
Meanwhile, the revision also improves the rejection and revocation systems, adding a revocation procedure initiated upon third-party request: anyone who finds that a registration does not comply with the regulations may request the intellectual property administration department under the State Council to revoke the layout-design registration. If the registration is revoked, the exclusive right shall be deemed to have never existed ab initio.
In addition, a right restoration procedure is newly added. If a party loses their rights due to a delay in the time limit caused by force majeure or other justified reasons, they may request the restoration of their rights.
The practical significance of these modifications is that in the event of an infringement dispute, the court can conduct infringement comparison more conveniently. Both parties to the litigation and the adjudicators will benefit.
Infringement Compensation Shifts from "Compensatory" to "Punitive", with up to 5 Times for Intentional Infringement In terms of exclusive right protection, the revision significantly increases the intensity: the amount of compensation for infringement shall be determined according to the actual loss suffered by the right holder or the benefits obtained by the infringer. If it is difficult to determine, it shall be reasonably determined by referencing a multiple of the licensing fee.
For serious circumstances, punitive damages apply, with 1 to 5 times punitive damages applied to intentional infringement with serious circumstances. This is a qualitative shift. In the "Juquan Case" (the first IC layout-design dispute case in Shanghai), Juquan Optoelectronic Technology (Shanghai) Co., Ltd. claimed RMB 15 million in compensation, and the final judgment ordered Shenzhen Ruinengwei Technology Co., Ltd. to pay a total of RMB 3.2 million for economic losses and other damages. Under the framework of the old Regulations, there was often a huge gap between the cost of infringement and the right holder's claims.
Under the new Regulations, intentional infringement with serious circumstances will be subject to 1 to 5 times punitive damages. This means a fundamental change in the logic of calculating infringement costs. The price of copying a layout-design may no longer be "compensating once after being caught," but rather "continuously paying at multiple times the licensing fee." Coupled with the Regulations' explicit requirement that legal persons provide reasonable rewards and remuneration to qualified creators, the entire system design forms a closed loop of "incentivizing creation - clarifying rights - severely punishing infringement."
Industrial Impact: Who Benefits and Who Faces Pressure Beneficiaries: IC design enterprises: Especially companies engaged in silicon photonics, quantum chips, and Chiplet interconnect design, their exclusive right foundation is more solid. The 1 to 5 times fine also provides small and medium-sized IC design enterprises with a legal tool to combat copying by large companies. IP suppliers: The originality declaration system makes rights protection and evidence collection for IP licensing contracts more direct.
Parties Facing Pressure: Follow-up enterprises relying on reverse engineering: Infringement costs surge, making the old "shortcut" model unsustainable. Fraudulent registration applicants: The Regulations explicitly stipulate that registration applications must be based on real creative activities and no fraud is allowed, regulating fraudulent application behaviors from the source. Packaging and testing facilities (OSATs): Although the SPC clarified in Case No. (2022) Supreme People’s Court Civil Final No. 565 that packaging enterprises cannot be naturally deemed to know the right status in the absence of evidence, they must pay reasonable remuneration after receiving a complaint, which actually elevates their compliance review obligations.
An Issue Worthy of Continuous Observation The revision of the Regulations resolves the "supply of rules," but the intensity of rule enforcement still needs to be tested in judicial practice after October 15, 2026. Case No. (2025) Supreme People’s Court Civil Final No. 452 of the SPC has already demonstrated the court's proactive review tendency regarding the right basis in layout-design infringement litigation. Even for registered layout-designs, if the application registration time exceeds the time of first commercial exploitation by more than two years, the court will not provide protection.
This means that the 1 to 5 times punitive damages clause in the new Regulations will function in parallel with the court's strict review of the right basis, originality, and the time of commercial exploitation. For IC design enterprises, exclusive right protection is both a shield and an alarm bell. The timing of registering their own layout-designs, the writing quality of the originality declaration, and the retention of evidence for the time of commercial exploitation will directly determine the upper limit of compensation during rights protection.
The Regulations take effect on October 15, 2026, leaving a time window of about 70 days for enterprises to self-inspect their IP assets and strengthen their registration documents.