EU Requests WTO Panel on China Royalties for High-Tech

EU Trade News

Filed February 12th, 2026

Detected March 1st, 2026

Summary

The EU has requested the establishment of a WTO panel to rule on China's practice of empowering its courts to fix worldwide licensing conditions for standard essential patents. This action follows unsuccessful consultations and aims to protect EU high-tech companies and their investments in innovation.

View original document View source feed page

What changed

The European Union has formally requested the World Trade Organization (WTO) to establish a panel to adjudicate a dispute with China concerning China's domestic court rulings on standard essential patents (SEPs). The EU alleges that China's practice of setting worldwide licensing conditions, including royalty rates, for SEPs (which may include EU patents) without the consent of patent holders, pressures European high-tech companies to lower royalty rates globally. This is seen as inconsistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and unduly interferes with the competence of EU courts.

The EU's objective is to ensure that its high-tech industries can effectively exercise their patent rights and protect their innovation investments. The EU will officially request the panel's establishment at the WTO Dispute Settlement Body meeting on February 24, 2026. If China opposes the establishment once, the EU will renew its request at the subsequent meeting. This action is part of a broader effort by the EU to address China's IP practices, following a previous successful ruling in a related dispute (DS611) concerning China's anti-suit injunctions policy.

What to do next

Monitor WTO Dispute Settlement Body proceedings regarding DS632.
Review internal licensing agreements for standard essential patents potentially affected by Chinese court rulings.

Source document (simplified)

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

Details

Publication date 12 February 2026 Author Directorate-General for Trade and Economic Security Location Brussels Country or region
- China
Trade topics
- Dispute settlement
- Intellectual property
Share this page