EU files case at WTO against China over protection of patents
Feb 18, 2022
Brussels [Belgium], February 18 : The European Union (EU) on Friday filed a case against China at the World Trade Organization (WTO) for restricting EU companies from going to a foreign court to protect and use their patents.
"China severely restricts EU companies with rights to key technologies (such as 3G, 4G and 5G) from protecting these rights when their patents are used illegally or without appropriate compensation by, for example, Chinese mobile phone manufacturers. The patent holders that do go to court outside China often face significant fines in China, putting them under pressure to settle for licensing fees below market rates," the European Commission said in a statement.
According to the statement, this Chinese policy is "extremely damaging" to innovation and growth in Europe, effectively depriving European technology companies of the possibility to exercise and enforce the rights that give them a technological edge.
"We must protect the EU's vibrant high-tech industry, an engine for innovation that ensures our leading role in developing future innovative technologies. 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," said Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade.
Since August 2020, Chinese courts have been issuing decisions - known as "anti-suit injunctions" - to exert pressure on EU companies with high-tech patents and to prevent them from rightfully protecting their technologies, the EU said. Chinese courts also use the threat of heavy fines to deter European companies from going to foreign courts.
The bloc said this has left European high-tech companies at a significant disadvantage when fighting for their rights. Chinese manufacturers request these anti-suit injunctions to benefit from cheaper or even free access to European technology.
The EU has raised this issue with China on a number of occasions in an attempt to find a solution, to no avail. As the Chinese actions are, according to the EU, inconsistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the EU has requested consultations at the WTO.
Last month, the European Union had launched a case at the WTO against China over its discriminatory trade practices against Lithuania, which it says are also hitting other exports from the EU's Single Market.
The 27 member bloc in a statement had said that these actions are harming exporters both in Lithuania and elsewhere in the EU, as they also target products with Lithuanian content exported from other EU countries.
