HIGHLIGHTS
- According to the EC, Chinese courts have issued "anti-suit injunctions."
- The Commission also sought advice from the United States and Japan.
- The group believes China is breaking the WTO's rules.
On Friday, the European Union filed a legal complaint against China at the World Trade Organization, claiming that Chinese courts were blocking European firms from defending their communications technology patents.
The European Commission, which launched the challenge on behalf of the EU's 27 members, said that EU firms were being discouraged from going to a foreign court to protect their standard-essential patents (SEPs).
The Commission also spoke with the United States and Japan, both of which have standard-essential patent holders facing comparable issues and seek to create global tech norms rather than relying on Beijing.
In order for their devices to fulfil specific international requirements, mobile phone manufacturers must secure SEP licences.
According to the Commission, Chinese courts have been imposing "anti-suit injunctions" since August 2020, prohibiting EU firms from proceeding to foreign courts, with the possibility of high fines as a disincentive.
The penalties in one case was EUR 130,000 (approximately Rs. 1.09 crore) per day, and the practise jeopardised the businesses' discussions on licence payments with Chinese smartphone producers, according to the EU executive.
China expressed concern over the EU challenge and stated that it has always supported the multilateral economic system.
The European Commission made no mention of the enterprises concerned. Oppo, Vivo, Xiaomi, and Honor, which was previously owned by Huawei, are China's leading smartphone manufacturers. Nokia and Ericsson are two European SEP holders.
The Commission stated that it has discussed the problem with China on several times without success.
The group claims China is infringing on the World Trade Organization's agreement on trade-related aspects of intellectual property rights (TRIPS).
WTO disputes begin with a formal 60-day consultation process between the parties, following which the EU can request a WTO panel judgement. The procedure, which may include appeals, might take years.
