European Union: European Commission requested consultations at World Trade Organization to address China's royalties on standard essential patents of European high-tech sector

On 20 January 2025, the European Commission requested consultations at the World Trade Organization (WTO) to address China’s royalties on European standard essential patents (SEPs). The consultations aim to challenge China’s practice of empowering its courts to set binding worldwide royalty rates for SEPs held by European high-tech companies without patent owners’ consent. SEPs are patents that protect technologies essential for manufacturing goods that meet industry standards, such as 5G for mobile phones. The European Commission argues that this approach pressures companies in the telecoms sector to lower global rates, granting Chinese manufacturers cheaper access to patented technologies and undermining the jurisdiction of EU courts over European patents. The Commission argued these measures breach the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). If unresolved within 60 days, the EU may request a WTO panel to adjudicate the dispute.