China Revises Chip Design-Protection Rules in First Update Since 2001

What China's New IC Layout-Design Regulation Changes

Chinese Premier Li Qiang has signed a State Council decree issuing a revised regulation on the protection of integrated circuit (IC) layout-designs — the first major update to the rules since they were introduced in 2001. The new regulation takes effect on Oct. 15, 2026.

The revision aims to strengthen both the protection and the commercial application of layout-designs, and to bring China's registration and management systems in line with its own laws and international treaty commitments. Officials from the Ministry of Justice and the China National Intellectual Property Administration (CNIPA) say the update was driven by the rapid development of IC technology and changing practical demands that had outpaced the original 2001 framework.

Under the new rules, applications must be based on genuine creative activity and free of fraudulent practice. Applicants will have to submit a declaration of originality, and copies or drawings must clearly indicate the original parts of the design. The regulation also sets out procedures for rejecting non-compliant applications, revoking improperly registered designs, and restoring rights lost because of force majeure or other legitimate reasons.

On enforcement, the regulation says infringement compensation will be calculated on the basis of the rights holder's actual losses or the infringer's profits, with a fallback to a reasonable multiple of the licensing fee when those are difficult to determine. It also requires relevant government departments to improve public services supporting layout-designs, and mandates that organizations reward employees who create layout-designs under their direction. Rules on transfer, licensing and pledging of layout-design rights are refined, including how licensing fees are distributed among co-owners. After the regulation takes effect, authorities say they will focus on publicity, supporting frameworks and enforcement.

Why Beijing Is Rewriting Chip-Design Protection Now

Why the 2001 Framework Needed Replacing

The original regulation dates to 2001, when China's IC design industry was far smaller and the country's WTO accession, with its accompanying intellectual property obligations, was still ahead. Since then, fabless chip design has become a central pillar of China's semiconductor strategy, and the volume of layout-design registrations and disputes has grown accordingly. The regulation itself does not mention geopolitics, but the update arrives as Chinese chip companies face tighter foreign technology restrictions — which makes a credible, enforceable domestic IP framework more commercially valuable for firms that increasingly operate across borders.

A Register Built for Enforcement

The originality declaration is the most consequential procedural change. Verified in the decree: applications must now be based on genuine creative activity, free of fraud, and submitted drawings must clearly mark the original parts. The practical effect is that responsibility shifts onto applicants to prove their designs are original, not copied or speculative filings. Combined with new rejection and revocation procedures, CNIPA gains tools to keep the register credible — which is the precondition for exclusive rights that hold up in court.

A Damages Ladder That Lowers the Cost of Litigation

The compensation order — actual losses first, then the infringer's profits, then a reasonable multiple of the licensing fee — bears a strong resemblance to the structure used in China's patent law. The regulation states the ladder explicitly; the significance is interpretation. Because actual losses are notoriously difficult to prove in chip-design cases, where the infringing product and the protected layout may be only loosely connected in the final silicon, a statutory fallback makes infringement claims more predictable to value and therefore more practical to pursue.

Turning Layout-Designs Into Financial Assets

Two provisions stand out on the business side. First, the refined rules on pledging layout-design rights could allow chip-design IP to be used as collateral for financing — potentially relevant for fabless startups whose main assets are designs. Second, the mandate that organizations pay reasonable rewards to employee-creators signals an effort to make design work financially attractive in a talent-sensitive industry. The decree does not specify a reward formula, so how this lands will vary by company.

Steps for Chip Designers Ahead of the Oct. 15 Deadline

For chip-design companies, fabless firms and their legal teams, the changes argue for preparation before the Oct. 15 effective date:

• Audit existing layout-design registrations against the new originality-declaration requirement — applications must now stem from genuine creative activity, and submitted copies or drawings must clearly mark the original parts.
• Build documentation trails now: records of design files, version histories and design-team contributions will be the evidence behind both the originality declaration and any future damages claim.
• Track licensing fee benchmarks: where actual losses or infringer profits are hard to prove, compensation falls back to a reasonable multiple of the licensing fee, so documented license terms become a direct input into damages.
• Review internal reward policies, since the regulation requires organizations to provide reasonable rewards and remuneration to eligible employee-creators of layout-designs — without specifying how much.
• Co-owners of layout-designs should agree in writing on how licensing fees will be distributed, because the revised regulation now regulates this explicitly.