The European Commission has requested consultations at the World Trade Organization (WTO) over what it sees as unfair trade practices by China in the field of intellectual property.
The complaint concerns Chinese courts’ authority to set binding “global royalty rates” for essential European standard patents, particularly in 5G technologies, without the patent holder’s consent. This practice forces European tech companies to lower their royalty rates, giving Chinese manufacturers easier access to European technologies.
The EU considers this approach unfair and an intrusion into the jurisdiction of European courts on patent matters.
“The European Commission firmly believes that such practices are inconsistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Since negotiations with China have failed to yield a satisfactory resolution, the EU has been compelled to request consultations as a first step in the WTO dispute settlement process to ensure that its tech companies, particularly in telecommunications, can effectively enforce their patent rights and protect their investments in innovation,” the statement reads.
If the consultation phase fails to produce a satisfactory outcome within 60 days, the EU is prepared to escalate the matter by requesting the WTO to establish a panel to adjudicate the dispute.
