Observers have said that the Chinese communist regime’s courts have exceeded their jurisdiction and that such practices will worsen China–EU trade relations.
The EU’s complaint aims to protect the intellectual property of its high-tech industry, especially patent rights in the telecom sector. The standard essential patent owners include Nokia and Ericsson. The patents involve key technologies enabling the manufacture of products to meet a certain standard, such as 5G for mobile phones.
“This pressures innovative European high-tech companies into lowering their rates on a worldwide basis, thus giving Chinese manufacturers cheaper access to those European technologies unfairly,” the European Commission said in a statement on Jan. 20 regarding China’s practices through its courts.
The commission has requested consultations, which is the first step in WTO dispute settlement, as “no satisfactory negotiated solution has been forthcoming from China,” it said.
According to WTO rules, China and the European Union have 60 days to settle the matter before the EU can request a panel to be set up to rule on it. The adjudicating panel proceeding usually takes 12 months.
China’s commerce ministry denied the accusation in a Jan. 20 statement, saying it “regrets” the commission’s decision.
The case is related to another complaint that the EU filed against China at WTO in 2022 over Beijing’s anti-suit injunction, which restrains foreign telecom patent holders from enforcing their intellectual property rights through non-Chinese courts. The companies that violate the injunction will face Beijing’s heavy fines and sanctions.
The panel handling the 2022 case will issue a report in the first quarter of 2025.
Although the Chinese regime has been forcibly expanding its jurisdiction, other countries don’t accept it, Yeh Yao-Yuan, a professor of political science and international studies at the University of St. Thomas in Texas, said of the cases.
“But the major concern is that once the foreign companies enter China, they may be sanctioned,” he told The Epoch Times on Jan. 21.
The Chinese regime’s courts’ setting rules for foreign companies worldwide is an abuse of the law, New York-based lawyer Ye Ning told The Epoch Times on Jan. 22.
The anti-suit injunction deprives foreign citizens of their right to file a lawsuit in their own countries, he said.
“It also interferes with the sovereignty of other countries,“ he added. ”The injunction is illegal itself and is extremely rare in the history of the rule of law in any country.”
China under the Chinese Communist Party (CCP) is not a rule-of-law society, and its laws are “designed to target powerless common people and to maintain the dictatorship of the Lumpenproletariat,” he said.
The CCP’s laws are only effective in mainland China, “but they will effectively deter foreign companies and entities from doing business in China,” he said.
Trade tensions between Beijing and Brussels have been increasing in recent years. Last year, the EU accused China of dumping products and imposed hefty tariffs on Chinese electric cars. In retaliation, Beijing increased tariffs on European brandy and launched probes into EU subsidies of some dairy and pork products.
The latest dispute over Beijing’s setting up worldwide royalty rates for EU standard essential patents will exacerbate the situation, Ye said, as the Chinese regime’s “bullying behavior” causes resentment from other countries.
The CCP uses its laws to steal EU technology and intellectual properties, “which is not a fair game and shows that it doesn’t play by the rules,” Yeh said.
“I believe the EU will implement countermeasures, such as imposing sanctions on Chinese telecom operators within the EU, prohibiting Chinese investments, or even limiting trade between China and the EU, all to pressure Beijing into ceasing its illegal activities,” he said.
