EU challenges China at WTO on telecom patents

WTO HQ in Geneva

The European Union has filed a legal challenge against China at the World Trade Organization (WTO) arguing that Chinese courts are preventing European companies from protecting their telecom technology patents.

The European Commission, which filed the challenge on behalf of the EU’s 27 members, said EU companies were being deterred from going to a foreign court to safeguard their standard-essential patents (SEPs).

“The European Union is filing today a case against China at the World Trade Organization (WTO) for restricting EU companies from going to a foreign court to protect and use their patents,” said the Commission.

“China severely restricts EU companies with rights to key technologies (such as 3G, 4G and 5G) from protecting these rights when their patents are used illegally or without appropriate compensation by, for example, Chinese mobile phone manufacturers.

“The patent holders that do go to court outside China often face significant fines in China, putting them under pressure to settle for licensing fees below market rates.

“This Chinese policy is extremely damaging to innovation and growth in Europe, effectively depriving European technology companies of the possibility to exercise and enforce the rights that give them a technological edge.”

Valdis Dombrovskis, Commission Executive Vice-President and Commissioner for Trade, said: “We must protect the EU’s vibrant high-tech industry, an engine for innovation that ensures our leading role in developing future innovative technologies.

“EU companies have a right to seek justice on fair terms when their technology is used illegally. That is why we are launching WTO consultations today.”

The Commission said that since August 2020, Chinese courts have been issuing decisions – known as “anti-suit injunctions” – to exert pressure on EU companies with high-tech patents “and to prevent them from rightfully protecting their technologies.”

It said Chinese courts also use the threat of heavy fines to deter European companies from going to foreign courts.

“This has left European high-tech companies at a significant disadvantage when fighting for their rights,” said the Commission.

“Chinese manufacturers request these anti-suit injunctions to benefit from cheaper or even free access to European technology.

“The EU has raised this issue with China on a number of occasions in an attempt to find a solution, to no avail.

“As the Chinese actions are, according to the EU, inconsistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the EU has requested consultations at the WTO.”

 

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.