EU challenges China at WTO on royalties for EU high-tech sector 

The European Commission has requested consultations at the World Trade Organization (WTO) aiming to remove unfair and illegal trade practices by China in the sphere of intellectual property. 

China has empowered its courts to set binding worldwide royalty rates for EU standard essential patents, without the consent of the patent owner. 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 also unduly interferes with the competence of EU courts for European patent issues. It is the firm view of the EU Commission that such practices are inconsistent with the 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, with the aim to ensure that its high-tech industries – notably in the telecoms sector – can effectively exercise their patent rights and protect their investments in innovation. 

Trade and Economic Security Commissioner Maroš Šefčovič said: “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. R&D is an engine for innovation that ensures EU leadership in developing future technologies, and it needs to be properly rewarded. We challenge these unfair trading practices at the World Trade Organization.”  

More information is available in the press release online. 

Share this article: