Fresh on the heels of the Section 301 announcement, USTR on March 23, 2018 made a consultation request of China regarding China’s discriminatory licensing practices. This is the first step in initiation of a WTO dispute. Here is a link to the press announcement.
The consultation request broadly speaking alleges discriminatory treatment in licensing pursuant to China’s joint venture regime as well as the Administration of Technology Import/Export Regulations (“TIER”), as compared to provisions under China’s contract law that may govern purely domestic technology transfers or Chinese exports of technology. The complaint is based on the National Treatment provisions of the TRIPS agreement as well as Article 28.2, which provides that “Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts.” The Section 301 Report of USTR also discusses these issues.
Update of June 2, 2018: On June 1, the EU filed its own complaint against China at the WTO involving China’s technology licensing practices, including the TIER. A copy of the request for consultations, which appears somewhat more extensive is available here.