A World Trade Organization dispute panel announced Friday that the intellectual property case between the United States and China will now be on hold until December 31. According to Reuters, the United States requested the hold on the case – which challenged China’s approach to intellectual property – but did not disclose its reasons for the request.
The clash over intellectual property theft
This dispute traces its roots back to last year when the United States filed a complaint with the WTO alleging that China “appears to be breaking WTO rules by denying foreign patent holders, including United States companies, basic patent rights to stop a Chinese entity from using the technology after a licensing contract ends.”
The U.S. argued that several of China’s intellectual property laws violate the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (also known as the TRIPS Agreement). Among other things, the TRIPS agreement prohibits WTO members from treating foreign entities less favorably than domestic ones concerning intellectual property. The U.S. pointed to China’s forced technology transfers as a method of favoring domestic entities over foreign ones.
Is a thaw in intellectual property disputes coming?
As we covered in a previous post, one of the topics over which the United States and China have long quarreled is China’s habit of forcing foreign entities to trade their technology rights for access to the Chinese market. However, perhaps between new legislation in China and the United States pressing “pause” on its WTO complaint, intellectual property disputes between the two countries are headed for resolution.