BRUSSELS: The European Commission on Monday filed a complaint with the World Trade Organisation (WTO) against China over its rules on royalty rates for high-tech patents, accusing Beijing of pressuring European companies to lower their rates globally, particularly in the telecom sector.
The Commission, which oversees the trade policy of the 27-nation bloc said China had empowered its courts to set worldwide rates for high-tech EU companies, notably in the telecoms sector.
“This pressures innovative European high-tech companies into lowering their rates on a worldwide basis, thus giving Chinese manufacturers cheaper access to those European technologies unfairly,” it said in a statement.
The case is related to standard essential patents (SEPs), which protect technologies vital for the manufacture of goods that meet a certain standard, such as 5G for mobile phones.
The Commission has sought consultations with China, the first step in WTO dispute settlement. If no satisfactory solution is found within 60 days, the EU executive can request for adjudicating panel. Panel proceedings take an average of 12 months to settle the issue.
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According to the Commission, the case was connected to another dispute the EU brought to the WTO in 2022 related to Chinese anti-suit injunctions, which limit telecom patent holders’ ability to enforce IP rights at non-Chinese courts, with the threat of heavy fines if they do so.
“The EU’s vibrant high-tech industries must be allowed to compete fairly and on a level playing field. Where this is not the case, the Commission takes decisive action to protect their rights,” said Maros Sefcovic, the EU’s trade commissioner.