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EU kicks off WTO process in patents row

The EU has taken the first step in dispute-settlement proceedings at the World Trade Organization (WTO) in a row with China over patents. 

The EU has accused China of adopting practices that will give its manufacturers cheaper access to European technologies unfairly. 

The European Commission says that China has given its courts the power to set binding worldwide royalty rates for EU standard essential patents, without the consent of the patent owner.

Standard essential patents protect technologies essential for the manufacture of goods that meet a standard, such as 5G for mobile phones. 

‘Pressure’ on EU firms 

The EU body says that China’s move puts pressure on European high-tech companies to lower their rates on a worldwide basis, adding that it also interferes with the competence of EU courts for European patent issues. 

It believes that the practices are inconsistent with a WTO agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). 

“Since no satisfactory negotiated solution has been forthcoming from China, the EU is compelled to request consultations as a first step in this dispute-settlement procedure at the WTO,” the commission said in a statement. 

Panel 

If the talks do not lead to a solution within 60 days, the EU can move towards the litigation phase and request that the WTO set up a panel to rule on the matter. 

The EU is currently challenging China at the WTO in a linked dispute over anti-suit injunctions, which the commission says restrain high-tech patent holders by fining or otherwise sanctioning them if they seek to enforce their intellectual-property rights through a non-Chinese court. 

Maroš Šefčovič (Commissioner for Trade and Economic Security) said that the EU would take “decisive action” to protect the rights of its high-tech industries in cases where they were not allowed to compete on a level playing field.