The European Union initiated a new dispute at the World Trade Organization (WTO) on Monday, contesting China’s approach to setting royalty rates for high-tech patents amid rising trade tensions between Beijing and Brussels.
The European Commission accused China of pressuring European high-tech firms to lower their fees by allowing Chinese courts to impose binding global royalty rates.
“The EU’s innovative high-tech industries must compete fairly on a level playing field,” said EU trade commissioner Maroš Šefčovič. “Where this is not the case, the Commission acts decisively to protect their rights.”
This move adds to ongoing disputes between the two powers, including EU tariffs on Chinese electric cars and Beijing’s countermeasures targeting European brandies and subsidies for dairy and pork products.
The latest case focuses on “standard essential patents” used in technologies that meet specific standards. European companies, particularly in telecoms, hold many such patents. The EU claims China’s practices undermine European courts’ jurisdiction and unfairly benefit Chinese firms.
Brussels has requested WTO consultations — the initial stage of dispute resolution — after failing to negotiate a solution. Under WTO rules, both sides have 60 days to resolve the issue before a panel can be convened.
China expressed “regret” over the EU’s decision, asserting it adheres to WTO rules and protects intellectual property rights while vowing to defend its interests.
The case follows a related 2022 challenge where the EU accused China of preventing European patent holders from seeking legal recourse in European courts.
Bilateral trade between the EU and China reached €739 billion (£616 billion) in 2023, making China the EU’s second-largest trading partner after the United States.