European Commission Files WTO Complaint Against China's Royalties on EU Patents
Brussels, Belgium - The European Commission has lodged a complaint with the World Trade Organization (WTO) against China, alleging unfair and illegal practices in setting worldwide royalty rates for EU standard essential patents (SEPs).
According to the Commission, China has granted its courts the authority to establish global royalties for European high-tech companies, particularly in the telecommunications sector. This pressures European companies to reduce their rates worldwide, providing Chinese manufacturers with an unfair advantage in accessing European technologies.
The dispute centers around SEPs, which cover essential technologies used in products adhering to industry standards, such as 5G for mobile phones. Prominent European SEP holders include Nokia and Ericsson.
The Commission has initiated consultations with China, the initial stage of the WTO dispute settlement process. Should a satisfactory resolution not be reached within 60 days, the EU may request the establishment of an adjudicatory panel. This process typically takes around 12 months.
The Commission notes the connection between this case and another WTO dispute brought by the EU in 2022, concerning Chinese anti-suit injunctions. These injunctions restrict the ability of telecoms patent holders to enforce intellectual property rights in non-Chinese courts, imposing substantial fines for non-compliance. The panel handling that case is expected to release its final report in the coming months.