USTR Report May Stem Trade Partners’ Weak-Patent Agenda

By Editorial Team

China, the EU, and the UK are making changes to standard-essential patents (SEPs) that could harm U.S. innovators. The U.S. Trade Representative (USTR) is finalizing its 2026 Special 301 Report, providing an opportunity to address these issues.

Implementers are pushing to limit injunctive relief for patent owners, mirroring trends seen domestically post-eBay v. MercExchange. This move affects parties in standards-development organizations (SDOs) who rely on fair, reasonable, and nondiscriminatory (FRAND) licensing terms.

Trade and Intellectual Property

These initiatives conflict with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, aiming to uphold IP rights globally. The USTR's Special 301 Report highlights foreign practices that fail to protect U.S. IP rights, promoting transparency and accountability.

Judicial Activism and Cartels Writ Global

Foreign courts, especially in China and the UK, are overstepping by dictating licensing terms and royalty rates globally. This includes issuing antisuit injunctions (ASIs) that impede patent owners' rights and devalue patents.

China and the EU are leading efforts to implement government rate-setting schemes, undermining market-based rates. The EU's plan to determine patents' essentiality to standards could harm innovators like Ericsson and Nokia.

Enhancing Special 301 Reports

The Innovation Alliance suggests adding a new section to the 2026 Special 301 Report to address efforts by U.S. trading partners to hinder private patent negotiations. This transparency could push back against weakening IP rights.

USTR has an opportunity to defend U.S. patent rights against global erosion. It's crucial to address these issues before further harm is done to American innovators.