February was an unusually busy month for me, and my week-long bout with COVID didn't help, so I am behind schedule in blogging about recent events of relevance to the world of patent remedies. One of the biggest of these was the European Union’s announcement on February 12 that it would be requesting the establishment of a WTO panel to determine whether China’s practice of establishing global FRAND royalties without consent of both parties violates the TRIPS Agreement. The request for establishment of a panel in DS632 China-Worldwide Licensing Terms for Standard-Essential Patents is available here, and the EU's brief summary of the case here. The WTO site for the case is here.
As previously noted on this blog, in January 2025 the EU instituted consultations with China concerning the issue of global FRAND royalties. In addition, in July 2025 the EU prevailed in its other WTO dispute with China (DS611-Enforcement of Intellectual Property Rights), concerning China’s antisuit injunction policy, when an arbitration panel (assembled in the absence, for several years now, of a functioning WTO appellate body) concluded (contrary to the initial panel decision) that that policy violated TRIPS articles 28.1 and 28.2 as read in light of article 1.1, because it “frustrate[d] the exercise of the exclusive right of a patent owner to prevent the use of the subject of its patent without its consent” and “alter[ed] the negotiating position of SEP holders in a fundamental way.” Much the same logic is expressed in the EU’s current request, along with additional reliance on Paris Convention 4bis (which is incorporated by reference into the TRIPS Agreement). In particular, the EU argues that the challenged measure (of setting global FRAND rates without consent of both parties) violates the following:
Article 28.1, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement, because China's measure has as its effect to restrict the ability of the owner of a non-Chinese patent to exercise the exclusive rights conferred on it by other WTO Members under Article 28.1 of the TRIPS Agreement, i.e., to prevent third parties not having the patent owner’s consent from making, using, offering for sale, selling, or importing the patented product.
Article 28.2, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement, because China's measure has as its effect to restrict the ability of the owner of a non-Chinese patent to meaningfully exercise its right to conclude licensing contracts, as conferred in the territory of other WTO Members under Article 28.2 of the TRIPS Agreement, by freely negotiating and concluding licensing contracts for the non-Chinese patents.
Article 4bis of the Paris Convention (1967), as incorporated into the TRIPS Agreement by virtue of Article 2.1 of the TRIPS Agreement, because China’s measure undermines the principle of territoriality and restricts the possibility for the parties subject to a decision rendered in China to start or continue proceedings before the courts of the WTO Member that granted the non-Chinese patents, and thus for the courts of that WTO Member to adjudicate actions relating to those patents in their respective jurisdictions.
Two obvious points to note. One is that, although the EU is challenging China’s policy only, it would seem that if the EU’s position turns out to be sound, the U.K.’s policy of establishing global FRAND rates without consent of both parties would be equally vulnerable. Second, if the EU’s position on Paris Convention 4bis is sound—and there is language in DS611 that is consistent with that position, as I noted here—wouldn’t that place the CJEU’s decision in BSH v. Electrolux in jeopardy as well, to the extent that decision appears to contemplate that courts in EU member states may adjudicate patent infirngement claims arising under non-EU member state law (as discussed, e.g., here and here?)
