EU Brings Legal Fight to WTO Over China’s Alleged Patent Infringement

WTO, World Trade Organization

The European Union (EU) brought accusations against China to the World Trade Organization (WTO) on Friday (Feb. 18), alleging Beijing stopped European tech firms from pursuing recourse in foreign courts to defend their own patents.

“It is part of a global power grab by the Chinese government by legal means,” said a European Commission official, Financial Times reported. “It is a means to push Europe out.”

China’s Supreme People’s Court decided in August 2020 that Chinese courts can impose “anti-suit injunctions” that stop a country from taking its case to court outside of China.

Tensions between the EU and China have been growing, and this latest move by the EU follows a separate case opened by Brussels at the WTO. Brussels has alleged that Beijing is taking its frustrations out on EU member state Lithuania over Taiwan. China has blocked all imports from Lithuania over a dispute regarding its relationship with Taiwan, according to reports.

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“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,” EU executive vice president Valdis Dombrovskis said in a statement, according to reports.

Sweden’s Ericsson, Finland’s Nokia and Japan’s Sharp reportedly lost money following a Chinese supreme court ruling that stopped them from protecting their patents because of licensing deals approved in foreign courts, the European Commission said.

Further, Chinese courts also reportedly set license fees 50% below the market rate previously decided and agreed upon between other technology providers and manufacturers, including Oppo, Xiaomi, ZTE and Huawei.

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Worldwide tenets for telecommunications networks had been set and agreed upon by smartphone makers. The tradeoff was that technology manufacturers would in turn share their patent licenses with others.

If all parties couldn’t come to an agreement on the price, the court was called upon to help everyone reach a consensus — but the cases had to be held in China.

The U.S. is also anticipated to join the EU.

China now has 60 days to respond to Brussels before the case moves to a settlement panel for a ruling.