EU Files WTO Case Against China Over IP Rights Protection

The European Union has filed a World Trade Organization dispute settlement complaint against China for unfair treatment of foreign intellectual property rights holders. The case follows a similar filing by the United States against China.

WTO

The EU says in its filing, available here, that a series of measures employed by China violate the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

In its filing, the EU said:

“Through its domestic legislation, China imposes a different set of rules on the import of technology, including industrial property rights, other intellectual property rights and undisclosed information (“intellectual property rights”), than the rules which are applicable to technology transfers occurring between Chinese companies. The Chinese measures at issue appear to: (i) discriminate against foreign holders of intellectual property rights, and (ii) restrict the foreign right holders’ ability to protect certain intellectual property rights in China, contrary to China’s WTO obligations.”

“China imposes restrictions on the rights of foreign intellectual property right holders to freely negotiate market-based contractual terms in licensing and other technology-related contracts concerning the transfer of technology to China. Notably, China imposes mandatory contract terms for contracts concerning the import of technology into China that discriminate against and are less favourable for foreign intellectual property rights holders. In addition to being discriminatory, these mandatory contract terms also appear to restrict intellectual property right holders who import technology into China in their ability of protecting their intellectual property rights in China.”

“Furthermore, in the context of joint ventures established with Chinese partners, China imposes mandatory contract terms that discriminate against and are less favourable for foreign intellectual property right holders, as well as restricting their ability to protect their intellectual property rights in China.”

The EU goes on to list Chinese legal instruments China imposes that allegedly violate WTO rules.

Below is a release from the WTO:

European Union files WTO complaint against China’s protection of intellectual property rights

The European Union has requested WTO consultations with China concerning certain Chinese measures which the EU alleges are inconsistent with China’s obligations under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). The request was circulated to WTO members on 6 June.

The EU in particular alleges that a number of China’s legal and regulatory instruments unfairly restrict foreign intellectual property rights holders from freely negotiating market-based terms in technology-related contracts and impose mandatory contracts concerning the import of technology into China.

Further information is available in document WT/DS549/1

Note:  this is the second dispute recently filed regarding China’s protection of intellectual property rights.  The United States initiated a similar WTO dispute complaint against the Chinese measures on 23 March.

What is a request for consultations?

The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.

Image Credits: William New