EU Challenges China's Patent Practices at WTO

The European Commission has lodged a complaint with the World Trade Organization against China's approach to setting global royalty rates for EU patents without consent. This affects standard essential patents in the telecom sector and pressures EU firms to reduce fees, benefiting Chinese manufacturers.

The European Commission has taken a significant step by lodging a complaint with the World Trade Organization on Monday. The complaint targets China's "unfair and illegal" practice of determining global royalty rates for European Union standard essential patents without obtaining consent from patent holders.

Commission officials highlighted that China's courts have been empowered to set these rates, putting immense pressure on high-tech EU companies, notably in the telecoms sector, which may be forced to reduce their rates globally. This practice, they claim, unfairly advantages Chinese manufacturers by offering them cheaper access to advanced European technologies.

This dispute focuses on standard essential patents, critical for manufacturing goods like 5G mobile phones. European giants like Nokia and Ericsson are among those affected. If consultations with China do not yield a resolution within 60 days, the Commission is poised to request a WTO adjudication, a process that can extend for 12 months.

(With inputs from agencies.)