BRUSSELS (Reuters) - The European Union has launched a lawsuit against China, claiming that it is using domestic courts to undermine intellectual property laws and allowing Huawei, Xiaomi and other telecoms giants to secure cut-price technology licences.
A World Trade Organization (WTO) case lodged in Geneva on Friday said Beijing was using new legal mechanisms known as “anti-suit injunctions” to prevent international companies from suing Chinese counterparts in foreign courts for their use of technology without licences or permission.
Firms that have made complaints – including Sharp, Ericsson and Nokia – have been threatened with daily fines of €130,000 (US$148,000) or criminal charges, meaning executives could be jailed in China for non-compliance, according to the EU.
Mobile phone manufacturers need to obtain licences for SEPs for their products to meet certain international standards.
China said that it regretted the EU challenge and that it always upheld the multilateral trading system.
The European Commission did not specify companies involved. China’s largest smartphone makers are Oppo, Vivo, Xiaomi and Honor, formerly owned by Huawei European SEP holders include Nokia and Ericsson .