The E.U.'s press release, titled "EU challenges China at the WTO to defend its high-tech sector," can be found here, and its Request for Consultations here. The principal point of dispute, as stated in the press release, appears to be the E.U.'s claim that "Chinese courts have been issuing decisions – known as 'anti-suit injunctions' – to exert pressure on EU companies with high-tech patents and to prevent them from rightfully protecting their technologies. Chinese courts also use the threat of heavy fines to deter European companies from going to foreign courts." The legal basis for the request is set forth at page 7 of the request, to wit:
The measures described above appear to be inconsistent with China’s obligations under the covered agreements, in particular:
Article 1.1, first sentence, of the TRIPS Agreement, in conjunction with Article 28.1 of the TRIPS Agreement, because China’s measures restrict, or seek to restrict, the exercise by patent owners of their exclusive rights to prevent third parties not having the owner’s consent from making, using, offering for sale, selling, or importing the product that is the subject matter of a patent or that is obtained directly by a patented process.
Article 1.1, first sentence, of the TRIPS Agreement, in conjunction with Article 28.2 of the TRIPS Agreement, because China’s measures, by prohibiting access to non-Chinese courts for the owners, of the type of patents at issue, restrict, or seek to restrict, the exercise by patent owners of their right to conclude licensing contracts.
Article 41.1, second sentence, of the TRIPS Agreement, because China’s measures create barriers to legitimate trade and fail to provide for safeguards against the abuse of enforcement procedures. China’s measures create barriers to legitimate trade because they prevent, or seek to prevent, patent owners in other Members from availing themselves of enforcement procedures that permit effective action against any act of infringement of intellectual property rights covered by the TRIPS Agreement, including expeditious remedies to prevent infringements and remedies, which constitute a deterrent to further infringements. Moreover, by granting worldwide anti-suit injunctions with little consideration of their impact on the enforcement procedures in other Members, China fails to provide for safeguards against the abuse of litigation procedures.
Article 1.1, first sentence, of the TRIPS Agreement, in conjunction with Article 44.1 of the TRIPS Agreement, because China's measures prevent, or seek to prevent, the judicial authorities of the other Members from ordering a party to desist from an infringement at the request of patent owners involved in patent litigation in China.
Section 2(A)(2) of the Protocol on the Accession of the People's Republic of China, as China, by issuing worldwide anti-suit injunctions for act preservation in patent litigation and imposing maximum penalties on a daily basis, has not applied and administered its laws, such as, inter alia, the Civil Procedure Law of the People’s Republic of China, in a uniform, impartial and reasonable manner.
There are also claims based on China's alleged violation of article 63 for "failure to publish final decisions pertaining to the subject matter of the TRIPS Agreement" and to "supply information on final judicial decisions of general application pertaining to the subject matter of the TRIPS Agreement."
It is unclear to me what is likely to happen as a result of all this. I would note, however, that (1) to my knowledge, Chinese courts haven't issued any more antisuit injunctions since the German courts started engaging in a little "self-help" last year, by intimating that a request for such relief would result in a company being deemed an unwilling licensee and therefore vulnerable to injunctive relief, notwithstanding the SEP owner's FRAND commitment; and (2) the WTO's appellate body hasn't had enough members to hear appeals since November 2020 (though to be sure, we're a long way away from even having an initial decision, let alone an appeal).
For further discussion, see these write-ups on Bloomberg Law, China IPR, IPKat, and Law360.
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