EU goes to WTO over Chinese approach to SEP licensing

Those in the FRAND space will be familiar with recent developments in Europe and the People's Republic of China concerning SEP and FRAND disputes. In particular, the Chinese Courts are now willing to undertake global FRAND determinations (where they consider it appropriate) alongside the UK courts (whose authority to do so, at least in connection with ETSI SEPs, was confirmed by the UK Supreme Court).

The details of the WTO case are not yet available, but from the press release (which has been widely reported, for example by Reuters), the EU's concerns appear focused on alleged severe restrictions on [European] companies enforcing their patent rights outside China. In particular, the EU suggests that Chinese courts may levy significant fines in China to sanction such behaviour, and that this may force those companies to accept below market rates for their SEPs. This, says the EU, is damaging to innovation and growth in Europe. Specifically drawn out is the Chinese courts' new stance in issuing anti-suit relief in such disputes (a recent phenomenon in the PRC arising from FRAND litigation).

This is a particularly interesting development for English lawyers (and presumably for US lawyers) as anti-suit relief has been in the common law toolbox for a long time. They are difficult to obtain, but they are considered an essential tool to prevent a party (not a foreign court) pursuing vexatious foreign litigation calculated to interfere with an English action. Breaching one is contempt of court. In contrast, they are alien to most civil law systems (with the exception of Germany, which has started using them in SEP disputes recently).

Putting aside the legitimacy of particular anti-suit injunctions, which is always fact dependent, it seems clear that this is at least in part a clash of cultures between the civil law jurisdictions of the EU against a developing Chinese jurisprudence (which is willing to borrow from both civil and common law systems the tools it perceives as necessary for manage global disputes). In some ways, this can be reduced to the usual known problem of managing local patent rights against (generally) contractual rights that mandate relief that is often global in scope. However, perhaps the most interesting question is this: given anti-suit injunctions have been around for a while, and have been used to prevent many parties pursuing vexatious (potentially interfering) litigation on many occasions, why now are they seen as so problematic?