The European Commission, which filed the
challenge on behalf of the EU's 27 members, said EU companies were being
deterred from going to a foreign court to safeguard their standard-essential
patents (SEPs).
The Commission has also consulted the
United States and Japan, whose standard-essential patent holders face similar
challenges and which want to be setting global tech standards, rather than
leaving this to Beijing.
Mobile phone manufacturers need to obtain
licences for SEPs for their products to meet certain international standards.
The Commission said Chinese courts had,
since August 2020, been issuing "anti-suit injunctions", which
prohibit EU companies from going to foreign courts, with the threat of heavy
fines as a deterrent
In one case, the fine was EUR 130,000 a
day, and the practice undermined the companies' negotiations on licence fees
with Chinese smartphone makers, the EU executive said.
China said that it regretted the EU
challenge and that it always upheld the multilateral trading system.
The European Commission did not specify
companies involved. China's largest smartphone makers are Oppo, Vivo, Xiaomi,
and Honor, formerly owned by Huawei. European SEP holders include Nokia and
Ericsson.
The Commission said it had raised the issue
on a number of occasions with China, without resolution.
The bloc believes China is violating the
WTO's agreement on trade-related aspects of intellectual property rights
(TRIPS).
WTO challenges start with a formal 60-day
period of consultations between the parties after which the EU can request a
WTO panel ruling. The process, including possible appeals, can take years. -Reuters