The European Commission has requested consultations at the World Trade Organization (WTO) to address unfair trade practices by China regarding intellectual property. China has empowered its courts to set binding worldwide royalty rates for EU standard essential patents without the patent owner’s consent. This forces innovative European high-tech companies to lower their rates globally, giving Chinese manufacturers unfair access to European technologies and undermining the authority of EU courts.
The Commission believes these practices violate the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). With no satisfactory solution from China, the EU is taking this step to ensure its high-tech industries, particularly in telecom, can protect their patent rights and investments in innovation.
“The EU’s vibrant high-tech industries must be allowed to compete fairly and on a level playing field. Where this is not the case, the Commission takes decisive action to protect their rights. R&D is an engine for innovation that ensures EU leadership in developing future technologies, and it needs to be properly rewarded. We challenge these unfair trading practices at the World Trade Organization,” Maroš Šefčovič, Commissioner for Trade and Economic Security; Interinstitutional Relations and Transparency, said.
If the consultations do not yield results within 60 days, the EU may escalate the dispute by requesting a WTO panel to adjudicate the issue. This case involves standard essential patents crucial for technologies like 5G, and China’s practices also relate to a separate dispute over anti-suit injunctions, which the EU is currently challenging. A report from the WTO panel on that case (DS 611) is expected in the first quarter of 2025.
