The EU challenged China at the World Trade Organization on Friday by accusing Beijing of blocking European tech companies from using foreign courts to defend their patents, opening a new chapter in their trade row.
“EU companies have the right to seek justice on fair terms when their technology is used illegally. That’s why today we are launching consultations at the WTO,” said the Executive Vice-President of the EU. EU, Valdis Dombrovskis, in a press release.
EU-China relations have become increasingly fractured and the latest salvo comes just weeks after Brussels opened a separate case at the WTO over accusations that Beijing was unlawfully punishing the EU member state, China. Lithuania, for its position towards Taiwan.
Manufacturing high-tech products, from phones to electric cars, requires a huge amount of patented technology, and Chinese companies have for years been accused of violating the terms of patents, unfairly punishing their rivals.
The EU said that since 2020, Chinese courts have been using threats of heavy fines and other court orders against EU companies that take their grievances to other courts around the world.
These lawsuits were brought by Chinese manufacturers seeking “cheaper or even free access to European technology”, the EU said.
The EU’s WTO case said companies that breached China’s tactics included Conversant, Ericsson, InterDigital and Sharp.
South Korean giant Samsung has also used a Chinese court to stop Swedish rival Ericsson’s patent disputes in countries like Germany.
Beijing’s harshest critics believe the courts are being instrumentalized to benefit Chinese manufacturers, lower the price of patents and promote China as a global standard setter in the use of intellectual property.
The “consultations” initiated by the EU are the first step in the WTO dispute settlement procedure.
If these consultations fail within 60 days, the EU can request the establishment of a panel to rule on the matter.