The European Union has launched a new case at the World Trade Organisation (WTO) against China’s rules on royalty rates for high-tech patents, at the centre of an escalating trade row between Beijing and Brussels.
The European Commission accused China of pressuring innovative European high-tech companies into lowering their rates by allowing its courts to set binding worldwide royalty rates.
EU‘s trade commissioner Maros Sefcovic asked that the EU’s vibrant high-tech industries be allowed to compete fairly and, on a level, playing field without which, he threatened that the Commission will take decisive action to protect their rights.
The action comes along sides the increasing trade tensions between China and the EU.
Beijing and Brussels have taken a series of tit for tat measures, slapping tariffs or launching probes and lawsuits over alleged unfair practices relating to a wide range of products including electric cars, cheese and brandy.
The latest challenge revolves around “standard essential patents” protecting technologies enabling the manufacturing of goods to meet a certain standard.
According to the EU, the European companies hold many such patents, notably in the telecom sector, by letting its court set worldwide royalty rates for those patents, China was forcing EU companies to give its firms cheaper access to those technologies, the 27-nation bloc alleged.
The case is related to another challenge launched in 2022 where Brussels accused Beijing of preventing European tech companies from using foreign courts to defend their patents.
China has also in time past accused European Union of imposing unfair “trade and investment barriers” on Beijing as they consistently denied its industrial policies are unfair and has threatened to take action against the EU to protect Chinese companies’ legal rights and interests.
