EU requests WTO panel in dispute with China over royalties for EU high-tech sector

China has empowered its courts to fix worldwide licensing conditions - including royalty rates - for portfolios of standard essential patents (SEP), which may contain EU patents, without the consent of these patent holders. This pressures innovative European high-tech companies into lowering the royalty rates for their SEP portfolios on a worldwide basis, giving Chinese manufacturers using European technology an unfair advantage. It also unduly interferes with the competence of EU courts for European patent issues.

It is the firm view of the EU that such practices are inconsistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Since WTO consultations with China in April 2025 did not result in a solution, the EU is requesting the establishment of a WTO panel to rule on this matter. The objective is to ensure that EU high-tech industries can effectively exercise their patent rights and protect their investments in innovation.

Next steps

The EU will officially request the establishment of a panel to rule on the legality of the Chinese measures at the next meeting of the WTO Dispute Settlement Body (DSB) on 24 February 2026. China can oppose the establishment of a panel once. If it does, the EU intends to renew its request, and the panel will be established at the next DSB meeting.

Background

This dispute (known as DS632) concerns standard essential patents (SEPs), which protect technologies essential for the manufacture of goods that meet a standard, for example 5G for mobile phones. European companies hold many such high-tech patents, notably in the telecom sector, which give them a technological edge.

Chinese law empowers Chinese courts to set binding and enforceable worldwide licensing conditions, including royalty rates, for portfolios of standard essential patents, which include non-Chinese patents (such as EU patents), without the consent of both parties. By fixing worldwide licensing conditions for such patents (even when granted by other countries), China effectively forces EU companies to give Chinese manufacturers cheaper access to that European technology.

In addition to DS632, the EU is involved in another dispute with Chinese SEPs: DS611 on China's anti-suit injunctions policy. The EU succeeded in obtaining a favourable ruling from a WTO Appeal Arbitrator in this case in July 2025, and continues to monitor China's implementation of the Arbitrator's findings.

For more information

EU request for a panel in DS632

DS632 - case summary

DS611 - case summary

Dispute settlement