China is being taken to the World Trade Organization by the European Union for alleged infringements on patents that are worth billions of euros, reports the Financial Times. Brussels is claiming that the infringements are indicative of a “power grab” by Beijing to set smartphone technology licensing rates. Businesses, including Sweden’s Ericsson, Finland’s Nokia and Sharp of Japan, have lost money after China’s supreme court banned them from protecting their patents by securing licensing deals in foreign courts, the European Commission said.
Chinese courts set license fees at around half the market rate previously agreed between western technology providers and manufacturers such as Oppo, Xiaomi, ZTE and Huawei, it added.
The lower licensing fees set by Beijing deprive smartphone makers and other mobile telecommunications businesses of a crucial source of revenue to reinvest in research and development.