BRUSSELS, Jan 20 (Reuters) - The European Commission

filed a complaint at the World Trade Organization on Monday

against what it said was China's "unfair and illegal" practice

of setting worldwide royalty rates for EU standard essential

patents without the patent owner's consent.

The Commission, which oversees the trade policy of the

27-nation European Union, said China had empowered its courts to

set worldwide rates for high-tech EU companies, notably in the

telecoms sector.

"This pressures innovative European high-tech companies into

lowering their rates on a worldwide basis, thus giving Chinese

manufacturers cheaper access to those European technologies

unfairly," it said in a statement.

The case concerns standard essential patents (SEPs), which

protect technologies essential for the manufacture of goods that

meet a certain standard, such as 5G for mobile phones.

European SEP holders include Nokia and Ericsson

.

The Commission has requested consultations with China, the

first step in WTO dispute settlement. If no satisfactory

solution is found within 60 days, the EU executive can ask that

an adjudicating panel be set up.

Panel proceedings take an average of 12 months.

The Commission said the case was connected to another

dispute the EU brought to the WTO in 2022 related to Chinese

anti-suit injunctions, which limit telecom patent holders'

ability to enforce IP rights at non-Chinese courts, with the

threat of heavy fines if they do so.

The panel handling that case is expected to issue its final

report in the first quarter of this year.