The EU is initiating further proceedings against China at the World Trade Organization (WTO). The reason for this is the country's attempts to prevent European companies from enforcing their patent rights, as the responsible EU Commission announced on Friday. Telecommunications companies such as Ericsson and Nokia, which hold patents in connection with mobile communications standards such as 5G, are particularly affected.

Patent holders who go to court outside of China are often subject to considerable fines in China, which puts them under pressure to settle for license fees below the usual market rates, explained the Brussels authority. For example, fines of 130,000 euros per day could be imposed for violations of the Chinese litigation ban.

"This Chinese policy is extremely detrimental to innovation and growth in Europe and de facto deprives European technology companies of the opportunity to exercise and enforce the rights that give them a technological edge," criticized the EU Commission.

Consultations with China are now planned as the first step in the WTO proceedings. Should these be refused by Beijing or fail, the EU could take the case to an arbitration tribunal. This in turn could then allow the EU to impose retaliatory measures such as punitive tariffs on Chinese imports.

"EU companies are entitled to claim their rights on fair terms if their technology is used illegally," commented EU Commissioner Valdis Dombrovskis. "That is why we are launching WTO consultations today."

The EU's WTO case against China is the second in just a few weeks. The EU had already brought another case at the end of January. The reason for this were trade restrictions that Beijing had imposed on member state Lithuania following a diplomatic dispute. From a European perspective, these are not compatible with the rules of the World Trade Organization (WTO) and also affect other exports from the EU internal market.