China not complying with intellectual property rights, EU launches WTO complaint

In a significant development the European Union has filed a complaint with the World Trade Organization against China saying that Chinese courts were preventing European companies from protecting their telecom technology patents.

The European Commission filed the challenge on behalf of 27 EU member countries saying EU companies were being deterred from going to a foreign court to safeguard their standard-essential patents (SEPs).

Incidentally, EU companies are not alone in facing this issue, US and Japanese companies are also facing similar challenges in China.

Mobile phone manufacturers need to obtain licences for SEPs for their products to meet certain international standards. Since 2020, Chinese courts have been issuing “anti-suit injunctions”, prohibiting EU companies from going to foreign courts, with the threat of heavy fines as a deterrent.

Case in point: in one example the fine was as much as $147,758 (130,000 euros) a day with the objective of the court being to force the companies to negotiate on licence fees with Chinese smartphone makers, said the European Commission.

The European Commission did not specify the companies involved.

European SEP holders include Nokia and Ericsson.

The EC had raised the issue on a number of occasions with China, without resolution. It European Executive believes Beijing is violating the WTO’s agreement on trade-related aspects of intellectual property rights (TRIPS).

($1 = 0.8798 euros)

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy, Sustainability

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