Taorui Guan on The Law of AI Knowledge Distillation (ABLJ)

"The Law of AI Knowledge Distillation"
Taorui Guan

American Business Law Journal 

Published online: September 2026

Abstract: Knowledge distillation—the practice of training a compact student model on the outputs of a larger teacher model—has emerged as the fastest-growing technique for replicating and disseminating frontier artificial intelligence (AI) capabilities. Because distillers can achieve near-parity with incumbents at a fraction of the cost, the practice simultaneously promises dramatic gains in competition and efficiency, while threatening to upend the incentive structure that finances multibillion-dollar AI research. Existing U.S. law offers only fragmentary guidance: copyright might not protect AI outputs at all; patent law offers limited, implementation-specific protection; trade-secret doctrine is pierced by the reverse-engineering exception; contract law's reach is powerful but uneven; and antitrust principles loom in the background yet remain doctrinally underdeveloped. As a result, both developers and distillers confront a haze of uncertainty that chills beneficial innovation, invites strategic litigation, and leaves core normative questions unanswered. This Article provides the first comprehensive treatment of the law of AI knowledge distillation. It begins by mapping the terrain across copyright, patent, trade-secret, contract, and antitrust doctrines, exposing the fault lines and unresolved conflicts that make distillation litigation unpredictable. It then draws on utilitarian, deontological, Lockean, and Rawlsian theories to evaluate whose interests the law ought to protect and why. Building on these positive and normative insights, the Article then proposes a balanced, modular framework that (1) classifies distillation into authorized, independent, and illicit forms; (2) legalizes good-faith reverse-engineering of publicly available model outputs; (3) imposes a time-limited compulsory-licensing regime on direct commercial cloning; (4) preserves broad exemptions for research, accountability, and transformative use; and (5) augments these rules with transparency, privacy, and safety safeguards. By articulating clear, principled boundaries around permissible and impermissible distillation, the Article charts a path that rewards foundational innovation without entrenching monopolies, facilitates robust competition and oversight, and ensures the more equitable distribution of the social surplus that AI generates.

Taorui Guan on Contracting Liability for Generative AI (University of Richmond Law Review)

"Contracting Liability for Generative AI"
Taorui Guan
University of Richmond Law Review
Published online: February 2026

Abstract: Generative artificial intelligence (“AI”) is straining the boundaries of long-established secondary liability doctrines in copyright law—including contributory infringement, vicarious liability, inducement, and statutory safe harbors. Courts and policymakers have yet to adapt these doctrines to the challenges that AI’s massive scale, decentralized development network, and opaque “black box” architectures pose, creating considerable legal uncertainty. In response, leading AI providers increasingly rely on contractual solutions—embedding warranties, indemnifications, liability caps, and other provisions into user agreements—seeking to allocate infringement risks preemptively. These evolving contractual approaches both draw upon and diverge from classic doctrines, offering novel insight into how the pressure of generative AI is causing companies to recalibrate their liability rules.

This Article provides a structured analysis of how emerging contractual liability arrangements grapple with generative AI’s unique challenges...(Please read full article here)

Taorui Guan on Coordinated Patents (NYU JIPEL)

"Coordinated Patents"

Taorui Guan

NYU Journal of Intellectual Property & Entertainment Law, vol.15 issue 1, pp.330-388

Published online: February 2026

As the United States and China compete ever more intensely for technological primacy in fields ranging from artificial intelligence to semiconductors, patent systems have emerged as an important factor shaping both nations’ trajectories. In the United States, patents function largely as market-based tools to incentivize private R&D and guide competitive innovation. In contrast, China has instituted a distinctive “coordinated patent regime,” weaving patents into a multi-layered framework of public subsidies, procurement preferences, tax measures, and regulatory advantages. This approach treats patents not merely as exclusionary rights but as mechanisms that channel both market forces and government resources, aiming to strengthen innovative capacity on a systemic scale.

Drawing on a comprehensive study of China’s legal statutes, official policies, and available empirical studies, this Article systematically examines how the coordinated patent regime operates...(click here to read the full text on JIPEL)

Taorui Guan won the 3rd place of the ATRIP 2025 Essay Competition

Congratulations to Taorui Guan on winning the 3rd Place for the ATRIP 2025 Essay Competition with his paper “Reconstructing Originality in Human–AI Collaboration under US Copyright Law”.

Every year, ATRIP holds an Essay Competition for Young Researchers in Intellectual Property Law. The competition is sponsored by FICPI, the International Federation of Intellectual Property Attorneys. For more information, please click here to view on ATRIP website.

Yang Lin and Taorui Guan on From safe harbours to AI harbours: reimagining DMCA immunity for the generative AI era (JIPLP)

"From safe harbours to AI harbours: reimagining DMCA immunity for the generative AI era"
Yang Lin (PhD 2022), Taorui Guan
Journal of Intellectual Property Law & Practice
Published online: August 2025

Abstract: Generative artificial intelligence (AI) overturns the passive-intermediary assumptions that underlie the US Digital Millennium Copyright Act (DMCA) safe harbour. Modern systems ingest vast, often unlicensed datasets and emit on-the-fly outputs through a supply chain that spans data suppliers, model developers and deployers—raising parallel concerns in the EU, UK, Hong Kong and other jurisdictions.

Building on DMCA section 512, this article sketches an ‘AI harbour’ that ties immunity to role-specific duties: provenance disclosure and transparency for data suppliers; dataset curation, memorization-mitigation and watermarking for developers and dynamic filtering, complaint handling and repeat-infringer policies for deployers. A new statutory section—administered by an ‘AI Division’ within the Copyright Office—would certify actors, audit compliance and endorse technical standards developed through industry co-regulation.

The proposal preserves the DMCA’s cooperative bargain while supplying clear, technologically realistic compliance pathways. Because its tiered obligations, administrative oversight and adaptive self-regulation can be grafted onto existing regimes, the model travels well: the EU could integrate comparable safeguards alongside the Digital Services Act and AI Act; the UK’s post-Brexit reforms and Hong Kong’s technology-neutral Copyright Ordinance could embed similar structures. In this way, the AI harbour could offer a scalable blueprint for protecting creators without chilling innovation in the generative era.

RGC Awards $3.5 Million in Research Funding to HKU Law 2025/26

Congratulations to our five colleagues who were successful in the 2025-2026 round of research grant funding by Hong Kong's Research Grants Council (RGC). The three General Research Fund (GRF) projects that were funded cover a range of topics, from examining the impact of “revolving-door” judges in the Chinese judicial system to investigating China’s efforts to reshape public interest lawyering to exploring the relationship between China’s legal system, financial markets, and economic development. Two Early Career Scheme (ECS) project were funded to study the Integration of China's Patent System and Social Credit System, and introduction of statutory recognition of same-sex couples in Hong Kong. The details of the new funded projects are as follows:

GRF:
Professor John Liu
The Revolving Door in the Chinese Judiciary and Its Economic Consequences: A Quantitative Study, HK$1,064,000

Professor Ying Xia
Nationalizing Legal Mobilization: The Transformation of Public Interest Lawyering under Xi Jinping, HK$679,000

Professor James Zeng
China's Path of Law and Finance, HK$746,000

ECS:
Professor Taorui Guan
Big Data-Driven Governance: A Study on the Integration of China's Patent System and Social Credit System, HK$630,925

Professor Stefano Osella
Recognising Same-sex Partnerships in Hong Kong: Constitutional and Human Rights Perspectives, HK$406,816

Taorui Guan on Collaborative Protection of Intellectual Property (University of Pennsylvania Journal of International Law)

"Collaborative Protection of Intellectual Property"
Taorui Guan
University of Pennsylvania Journal of International Law, Vol. 46 (2024), Issue 2
Published online: January 2025

Abstract: What constitutes the optimal approach to intellectual property (“IP”) protection? The mainstream method, prevalent in many countries, including the United States, is a court-centric model. In contrast, in response to heightened international innovation competition, China adopted an expansive collaborative protection model. This groundbreaking approach extends beyond governmental bodies, such as courts and administrative agencies, to non-governmental entities like private actors, social organizations, and educational institutions.

This paper offers a comprehensive analysis of China’s collaborative protection model, including its policies, legislation, and practical applications. It incorporates literature from public administration and administrative law on collaborative governance to dissect the model’s essence. It suggests that this model allows collaboration among diverse entities to integrate resources and information, aiming to achieve more effective IP protection.

The paper highlights the theoretical implications of the collaborative protection model on the dual nature of the IP system. As a property system, the emergence of the collaborative model implies that relying largely on courts might not offer optimal protection for IP, given its nonrivalrous and non-excludable nature. The pluralistic nature of collaborative protection enhances accessibility, diversity, and timeliness in IP protection, despite challenges like interest divergence, insufficient incentives, and rising costs. As a system of innovation regulation, the model reveals that states can improve the granularity of their innovation incentives through diverse enforcement institutions. While this approach complicates the IP framework, its adaptability in varied innovation scenarios might offset the intricacies, presenting a viable supplement to traditional innovation incentive regulation based on the structure of IP rights.

Taorui Guan on Personalizing Patent Law with Social Credit Data (JIPEL)

"Personalizing Patent Law with Social Credit Data"
Taorui Guan
NYU Journal of Intellectual Property and Entertainment Law (Vol 13, no. 2, spring 2024)
Published online: July 2024

Abstract: In the era of digitization, data has become a pivotal force driving advancements across various sectors and transforming legal systems worldwide. China, in particular, is exploring new data-driven governance models. A prime example of this is its integration of the patent system with the Social Credit System (SCS). This paper aims to fill the void in theoretical research on this subject, moving beyond the prevalent narrative of the SCS as either a tool of state surveillance or a reputation-based regulatory mechanism. Instead, it introduces the concept of personalized law in the context of China’s patent system.

The paper suggests that the integration of social credit data within China’s patent law system aligns the system’s operations more closely with its objectives. This offers a personalized approach that provides individual market entities with tailored incentives based on their unique characteristics. To analyze this approach, the paper proposes a novel four-part analytical framework: profiling, personalization, communication, and adjustment. The paper then applies this framework to the two core mechanisms that result from the integration of the patent system with the SCS: the Reward and Punishment Mechanism and the Tiered Regulation Mechanism. This analysis reveals that these mechanisms are still in the stage of crude personalization and grapples with challenges such as narrow data scope, lack of transparency, and over-penalization.

The paper discusses two implications of personalized law reform: the redistribution of power toward administrative bodies—which necessitates a rebalancing of powers to avoid abuse and protect individual rights—and the possible expansion of the law’s functions—which might not align with existing normative theories and might have unintended consequences. The process of personalization requires scholars and policymakers to adapt and refine these theories as well as to identify and eliminate unintended consequences.

Taorui Guan on Cooperative Federalism and Patent Legislation: A Study Comparing China and the United States (CJIL)

"Cooperative Federalism and Patent Legislation: A Study Comparing China and the United States"
Taorui Guan
Chicago Journal of International Law (vol. 24, no. 2 (2024), pp. 259-304)
Published online: February 2024

Abstract: How should patent legislative power be allocated between central and local governments in order to construct a patent system conducive to promoting innovation? A comparative analysis of the models of the U.S. and China sheds light on this question. The early American states established their patent systems before the formation of the federal system, but the U.S. Constitution arrogated patent legislative power to the federal government, ending the era of decentralized patent systems. This centralized structure ensures uniformity in rules but might hinder the system’s adaptability and ability to experiment. In contrast, as China’s patent system evolved, its patent legislative power spread from the central to the local governments. This shift led to the coexistence of dual-level patent legislative structure. Currently, twenty-nine out of thirty-one province-level authorities (93.5%) and twenty-one out of 323 city-level authorities with local legislative power (6.5%) have established local patent laws. China’s patent system is not entirely decentralized but rather, semi-decentralized, as the locales not only implement their local patent laws but also must enforce the central government’s national patent laws. China’s semi-decentralized patent legislation model embodies significant features of cooperative federalism, where the central and local governments share the national power to handle affairs and collaborate to address issues. Yet, the central government maintains a dominant position in this cooperative relationship, as a consequence of China’s unitary state structure. Compared to the current centralized patent legislation model in the U.S., China’s semi-decentralized patent legislation model has the advantage of making statutory law more adaptable to local specificities and promoting local competition and institutional innovation. However, it also faces challenges, such as increased costs due to inconsistency; efficiency decline stemming from rent-seeking behaviors; and the risk that local protectionism will create anti-competitive effects.

Taorui Guan on Intellectual Property Legislation Holism in China (University of Pennsylvania Asian Law Review)

"Intellectual Property Legislation Holism in China"
Taorui Guan
University of Pennsylvania Asian Law Review, (vol. 18, (2023), pp. 81-140)

Published online: December 2023

Introduction: Over the past forty years, Western policy makers, commentators, and scholars have followed the development of China’s intellectual property system with interest. Many Western countries have exported intellectual products to China, and the protection that China’s intellectual property system provides affects these countries’ gains.  Some of them, particularly the United States, complain that China does not provide sufficient protection of intellectual property rights. When scholars study China’s intellectual property system, they tend to focus on whether the Chinese government has granted intellectual property rights to some particular kinds of intellectual products and whether it has effectively enforced these rights. Over the years, there have been studies claiming that the level of protection of intellectual property rights in China is inadequate, but more recent research has suggested that the opposite might be the case....read full article here.

Taorui Guan on Investors’ Perspective on Intellectual Property Financing (Seton Hall Law Review)

"Investors’ Perspective on Intellectual Property Financing"
Taorui Guan
Seton Hall Law Review (vol. 54 (2023), pp. 439-503)
Published online: November 2023

Abstract: The intellectual property system is generally considered to be a legal system that promotes innovation. But the ways through which it achieves this goal are still not entirely clear. Conventional intellectual property theories tend to describe the system’s role in promoting innovation as providing creators with incentives to create and commercialize intellectual products, as well as disseminating knowledge to potential users. What is lacking in the literature is theoretical research that explains the role of the intellectual property system in encouraging investors to finance innovations. To fill this gap, this Article approaches the intellectual property system from the perspective of investors and examines its role in facilitating investors to finance innovative firms. This Article demonstrates that while investing in these firms, investors face the challenges of high risk of loss, information asymmetry, and inadequate channels. The intellectual property system helps investors handle these challenges by (1) securing their returns, (2) providing signals that assist in their decision-making, and (3) coordinating various parties to form relationships that facilitate investments. While the intellectual property system promotes innovation by facilitating financing, two inherent features of the system constrain its function: the uncertainty in intellectual property rights and the non-inclusiveness of disclosure. To reduce the constraints on the financing function of the intellectual property system, this Article informs policymakers by presenting several reform options. Regarding the theoretical aspect, it proposes that scholars, policymakers, and lawyers examine the intellectual property system from the perspectives of investors or other parties who are not directly involved in the creation and use of intellectual products. These perspectives not only allow scholars, policymakers, and lawyers to reflect on, and even critique, conventional intellectual property theories but also assist them in developing a more comprehensive understanding of the intellectual property system.

HKU Law Welcomes Dr Taorui Guan, Research Assistant Professor

Welcome to Dr Taorui Guan, Research Assistant Professor at the Department of Law. His research work is primarily concentrated on the development of technology markets, legal reforms in response to emerging technologies, the interplay between intellectual property and finance, and China’s innovation system. He publishes his findings in both Chinese and English. From 2019-2020, he held the Thomas Edison Innovation Law and Policy Fellowship at the Center for Intellectual Property x Innovation Policy of George Mason University. He won the John M. Olin Prize in Law and Economics in 2021.

In the classroom, Dr. Guan instructs students on intellectual property and information technology, copyright law, and Chinese intellectual property law. He also acts as a tutor in a course that provides an introduction to Chinese law.

His academic credentials include an S.J.D. and an LL.M. from the University of Virginia School of Law. During his doctoral studies, he received the Chinese Government Doctoral Scholarship. He also earned an LL.M. in Intellectual Property Law from Renmin University of China, where he was named a Distinguished Graduate and was awarded a National Scholarship for Graduate Students. His initial degrees, a BA in Business English and an LL.B., were obtained from Guangdong University of Foreign Studies, where he was the recipient of the National Scholarship for Undergraduate Students and the First Class Scholarship for two years running.

Having successfully passed the Chinese Judicial Examination, Dr. Guan is also a member of the New York State Bar. His professional affiliations include membership in the Chinese Law Society.

His Research areas include:

• Intellectual Property Law
• Law and Technology
• Chinese Law