The European Commission has accused China of pressuring innovative European high-tech companies into lowering their fees by allowing its courts to set binding worldwide royalty rates.

The WTO said in a statement that its Dispute Settlement Body (DSB) had agreed during a meeting to create a panel to rule on the EU complaint, first filed in January 2025.

In the complaint, Brussels charged that Beijing's practices were inconsistent with international trade rules, including a WTO agreement related to intellectual property rights.

The two sides failed to reach an agreement during consultations set up to resolve the spat, and the EU last month submitted an initial request for the DSB to set up an expert panel.

China blocked that first request, but under WTO rules, a second panel request is, in practice, automatically accepted.

The dispute figures among a longer-running spat between Beijing and Brussels, which has seen the pair accuse each other of unfair practices and take a series of tit-for-tat measures.

The issue to be examined by the new WTO panel revolves around "standard essential patents" protecting technologies enabling the manufacturing of goods to meet a certain standard.

European companies hold many such patents, notably in the telecom sector, according to the EU.

By letting its courts set worldwide royalty rates, China was forcing EU companies to give its firms cheaper access to those technologies, the 27-nation bloc alleged.

The practice also unduly interfered with the competence of EU courts for European patent issues, according to the commission.

During Thursday's meeting, the EU representative repeated the bloc's claim that the Chinese measures undermined the principle of territoriality of patents, according to the WTO statement.

The EU also charged that patent owners could not freely negotiate and conclude licensing contracts for the use of their non-Chinese patents in other territories.

For its part, China had said it was deeply disappointed with Brussels' decision to proceed with its panel request, according to the WTO statement.

The Chinese representative said it would rigorously defend its measures during the panel proceedings and was confident that a panel would find them fully consistent with WTO rules.