The European Union (EU) announced on Friday February 18 that it had seized the World Trade Organization (WTO) against Beijing, accused of obstructing legal action by European companies whose patents, particularly high technology, are used illegally by Chinese firms.
Beijing prevents companies “holding rights to crucial technologies, such as 5G”to have recourse to justice outside China, “when their patents are used illegally or without proper compensation, for example by Chinese smartphone manufacturers”says the European Commission in a press release.
Four injunctions
Since August 2020, Chinese courts can prohibit patent holders from going to a non-Chinese court to enforce their rights through a “injunction against prosecution” in a third country.
Since that date, four injunctions of this type have been issued in China against foreign patent holders, observes the Commission, stressing that the violation of such an injunction can be punished with a daily fine of 130,000 euros.
This policy of the second world economy is “extremely detrimental to innovation and growth in Europe”as it prevents EU technology companies from taking advantage of the competitive advantage granted to them by their patents and “pushes them to accept license fees below market prices”deplores the European executive.
According to Brussels, “Chinese manufacturers are asking for these anti-lawsuit injunctions in order to benefit from cheaper or even free access to European technology”enough to place the Western groups in a position “extremely unfavorable”.
“Companies have the right to seek justice on fair terms when their technology is used illegally”said Commission Vice-President Valdis Dombrovskis.
arm wrestling
This new procedure comes as the EU is already engaged in a showdown at the WTO with Beijing, accused of blocking Lithuanian imports amid diplomatic tensions over Taiwan.
After twenty years of membership in the WTO, the United States and Europeans regularly accuse China of circumventing the rules of the institution to protect its companies, by strictly controlling access to its market for foreign groups and by amplifying the domination by the state of whole sections of its economy. Judged reviews ” unfounded “ by Beijing.
The “consultation” requested by the EU constitute the first stage of the dispute settlement procedure within the framework of the WTO. If these consultations fail within sixty days, the EU may request the establishment of a group to decide on the matter.