The Trump administration entered a complaint at the World Trade Organization (WTO) on March 23 over China’s allegedly discriminatory patent licensing practices.
The action is part of a package of trade measures announced by the White House to address China’s alleged theft of U.S. intellectual property.
The Office of the U.S. Trade Representative (USTR) is contesting a variety of Chinese regulations that allegedly put U.S. patent holders at a disadvantage in Chinese markets. Generally USTR claims that China imposes conditions that block U.S. firms from protecting their intellectual property, the complaint says.
USTR says China “appears to be breaking WTO rules by denying foreign patent holders, including U.S. companies, basic patent rights to stop a Chinese entity from using the technology after a licensing contract ends.”
“These Chinese policies hurt innovators in the United States and worldwide by interfering with the ability of foreign technology holders to set market-based terms in licensing and other technology-related contracts,” USTR says.
The first step in the WTO dispute settlement process is consultations between the parties. If the U.S. and China are not able to reach a solution through consultations, the U.S. may request that WTO establish a dispute settlement panel to review the matter.
President Donald J. Trump directed U.S. Trade Representative Robert Lighthizer to file the complaint a day after he announced the U.S. would impose tariffs on up to $60 billion of Chinese imports for allegedly stealing American technology.