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26 March 2018Patents

US accuses China of denying patent rights in WTO case

The US has accused China of breaking World Trade Organization ( WTO) rules by denying US companies’ “basic patent rights” in the country.

The news came one day after US President Donald Trump announced tariffs of up to $60 billion on China to crack down on IP theft, which followed a US investigation into China’s policies and practices relating to IP, technology transfer and innovation.

In a complaint filed at the WTO on Friday, March 23, the US Trade Representative ( USTR) claimed that China was not allowing foreign patent owners to hold basic patent rights.

According to the USTR, China denies foreign patent owners the ability to enforce their patent rights against a Chinese joint-venture party after a technology transfer contract has ended.

Trump asked the USTR to file the request for consultation with China at the WTO.

In its WTO complaint, the US said that China imposes “mandatory adverse contract terms” that disadvantage imported foreign technology.

“Therefore, China deprives foreign IP rights owners of the ability to protect IP rights in China as well as freely negotiate market-based terms in licensing and other technology-related contracts,” read the complaint.

If the US and China are unable to reach a mutually agreed solution through consultation, the US may request a WTO dispute settlement panel review the matter.

In response to the US tariffs, China said it would impose 15% import tariffs on 120 types of US products including fruit, wine and steel pipes, worth $977 million.

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