Acer & ASUS v Nokia: English Court of Appeal Approves Choice of Arbitration as Global (F)RAND Venue for SEP Licensing Disputes When Made by SEP Owners

I. INTRODUCTION

In a decision handed down on 12 May 2026 in Acer Incorporated & Ors v Nokia Technologies Oy [2026] EWCA Civ 564 (Acer & ASUS v. Nokia), the English Court of Appeal endorsed arbitration as an acceptable means of dispute resolution for resolving global (F)RAND disputes, where arbitration is sought by the SEP owner.

The Court of Appeal held that Nokia, as a standard-essential patent (SEP) owner, discharged its RAND obligation by offering an immediate license with final terms to be determined by an arbitral tribunal. In doing so, it recognized that arbitration is well suited to resolving multi-jurisdictional licensing disputes through a single, globally enforceable determination. However, the decision is not without controversy as it effectively compels a SEP licensee to arbitrate against its will, based on a theory that where there is a choice between (F)RAND approaches, the SEP owner’s choice is determinative. Subsequent decisions have illuminated the boundaries of the English courts’ recognition of arbitration as a suitable (F)RAND determination venue.

This blog post summarizes the Court of Appeal’s reasoning and its limitations; outlines practical considerations for both SEP owners and licensees; and discusses some recent developments following the Court of Appeal’s judgment.

II. BACKGROUND

A. The (F)RAND Framework

Standardized technologies – like cellular, Wi-Fi and video coding technologies – are often protected by patents that their owners volunteer for inclusion in a standard during the standard development process. A patent that protects standardized technology and thus cannot be avoided when implementing a standard is a “standard-essential patent.” Such inclusion creates immense power for SEP owners. To prevent SEP owners from exploiting that position, standards development organizations such as the European Telecommunications Standards Institute (ETSI) and International Telecommunication Union Telecommunication Standardization Sector (ITU-T) require SEP owners to give a voluntary but irrevocable undertaking or binding commitment to license their SEPs on fair, reasonable and non-discriminatory terms (FRAND or, in the case of ITU-T where they drop “fair,” simply RAND).¹

(F)RAND undertakings are recognized by the UK courts as contracts for the benefit of third parties, which can be enforced by licensees against the SEP owners.² These undertakings represent a contractual derogation from a patent owners’ usual rights under patent law to exclude a user of a patent from the market. In recognition that SEPs (if actually essential) have to be used in order for others to adopt standardized technology and compete on a market, competition law intervenes to demand that SEP owners provide the (F)RAND undertaking.³ And when a standard is adopted, SEP owners obtain global licensing revenues from a vast number of potential licensees.

(F)RAND licenses are typically global (as a result of global patent portfolios and global product coverage). Since the UK Supreme Court’s decision in Unwired Planet v Huawei [2020] UKSC 37, the English courts will determine the terms of such global licenses – including the royalty rate – and will injunct a potential licensee for infringement of a UK SEP if it refuses to enter into that (global) license. Such licensees are often described as “unwilling licensees,” in contrast to “willing licensees” that commit to take a (F)RAND license.

B. The Dispute and Nokia’s Adjustable License Offer

Video-coding (video codec) standards – H.264/AVC and H.265/HEVC – are developed by the ITU-T and used for high-definition video playback. Nokia holds a portfolio of video codec SEPs.

Acer and ASUS make computers that can encode and decode video streams. Acer and ASUS accepted that they need a license to Nokia’s SEP portfolio. However, the parties could not agree on the RAND terms for Nokia’s SEPs and specifically, the applicable rate.

After negotiations failed, Nokia commenced patent infringement proceedings seeking injunctions across Germany, the Unified Patent Court (the UPC), the USA, Brazil, and India. Nokia did not request that these courts set RAND terms for licenses to the patents in suit (or the portfolio more widely). Acer and ASUS therefore responded by seeking various forms of relief from the English Patents Court, including a determination of the global RAND license terms for Nokia’s video SEPs. They committed to enter into this court-determined license, at least on a final basis and also on an interim basis.

In previous rate-determination cases before the English courts, various parties have entered “interim” or “adjustable” licenses before the final determination, owing to the time it takes to determine finally the license terms. Such an “interim” or “adjustable” license is an immediate global license made on largely agreed terms, with some form of interim royalty payment, but with the final rate to be fixed by a court (hence, adjustable). In this case, however, Nokia offered to license its SEP portfolio on terms to be adjusted, not by the English court, but by an arbitral tribunal in an arbitration proceeding under the Arbitration Rules of the International Chamber of Commerce (the ICC).

Acer and ASUS argued that Nokia’s offer to determine the final terms of the license in arbitration ran counter to the fundamental principle that arbitration is a consensual process, as it would effectively permit Nokia to force them to arbitrate what terms are RAND. Conversely, Nokia disputed whether the English courts had jurisdiction to hear Acer and ASUS’s RAND determination claims. They did that by challenging the court’s earlier order permitting Acer and ASUS to serve their claim on Nokia outside the jurisdiction. Nokia also contended in the alternative that, given its offer of an immediate license under which the final RAND terms would be determined in arbitration, Acer and ASUS’s RAND determination claims should be stayed permanently.

At first instance, the High Court accepted jurisdiction, refused Nokia’s application for a permanent stay of proceedings, and granted some (but not all) of the interim license declarations sought by Acer and ASUS. Nokia appealed against that decision.

C. The Decision of the Court of Appeal

The Court of Appeal agreed with the High Court that the English courts had jurisdiction. However, it overturned the High Court’s decision and granted Nokia’s application for a stay. It did so for the primary reason that Nokia, as the SEP owner, was entitled to elect arbitration as the forum for determining global RAND terms, based on case law (settled up to Court of Appeal level) that if more than one set of terms is RAND, the SEP owner is entitled to select the terms that are most favorable to itself. The Court gave three further reasons supporting that conclusion.

First, the Court of Appeal held that Nokia’s offer to Acer and ASUS was for an immediate global license to its video SEP portfolio and was capable of acceptance. The offered license would achieve one of the licensees’ key objectives – to avoid market exclusion in Germany, the UPC, the USA, Brazil, and India. In that respect, the Court of Appeal considered it important that the offer was not merely to enter into an arbitration process with the prospect of a license at the end of it (which would have left Acer and ASUS vulnerable in the interim to assertions of patent infringement), but was an offer for an immediate global license that would protect Acer and ASUS from the threat of injunctions worldwide.

Second, the Court of Appeal considered it important that the terms of the interim license were agreed, even if those terms could subsequently be adjusted through arbitration. In this context, the Court of Appeal dismissed the licensees’ argument that the offer of arbitration as a means for determining RAND terms lacked transparency. This was because, unlike other arbitral rules, the ICC Rules that formed part of Nokia’s offer did not include any automatic or default provision for confidentiality. The Court saw “no good reason” why an arbitral tribunal determining RAND terms “should not publish its award subject to any necessary redaction of truly confidential information in the same way the English courts do.”⁴ The Court of Appeal did not identify on what authority a tribunal could publish its award but nevertheless determined that this resolved the licensees’ complaint about the lack of transparency.

Third, the Court of Appeal held that the fact that the interim license provided for the final license terms to be determined by arbitration did not preclude that offer from being capable of acceptance, nor did it mean that those terms were not RAND. On the contrary, the Court of Appeal held that the final terms were necessarily RAND because the arbitral tribunal was specifically tasked to determine RAND terms.

In a follow-on judgment of 18 May 2026, [2026] EWCA Civ 604, the Court of Appeal refined the boundaries of the SEP owners’ ability to compel licensees to arbitration. The judgment arose out of the fact that Acer and ASUS also own SEPs and had asserted some relating to cellular technology in the US against Nokia and its customers who implement cellular standards via Nokia’s network infrastructure products. In the usual course of SEP licensing, Acer/ASUS and Nokia would therefore enter into a cross-license. In the circumstances of this case, the Court of Appeal held that Nokia could not force the determination of FRAND terms for Acer’s and ASUS’s own cellular SEPs into arbitration. This was because – by the logic of Nokia’s own arguments seeking arbitration over litigation in the English courts – the choice of forum for determining a global license to an owner’s SEPs belongs to the owner. A term that would have forced the inclusion of Acer’s and ASUS’s SEPs into the arbitration determining the RAND rate for Nokia’s video SEPs would have deprived Acer and ASUS of that choice. Such a term was therefore not RAND according to the Court of Appeal.

III. ANALYSIS

A. Arbitrating (F)RAND Disputes

It is uncontentious that a dispute between a SEP owner and a licensee as to what license terms are (F)RAND may, in principle and with the parties’ agreement, be determined by international arbitration. The Court of Justice of the European Union held that “where no agreement is reached on the details of the FRAND terms … the parties may, by common agreement, request that the amount of the royalty be determined by an independent third party” in its seminal decision in Case C-170/13 Huawei Technologies Co. Ltd v ZTE Corp [EU:C:2015:817] – a proposition that the Court of Appeal expressly endorsed in Acer & ASUS v Nokia.⁶ Indeed, a number of (F)RAND disputes have already been determined in arbitration by consent, including two involving Nokia.⁷ In addition, the license itself may include terms that stipulate that any dispute as to the renewal of that license must be determined by arbitration. That said, despite a number of notable examples, arbitration has yet to emerge as the dominant forum for determining (F)RAND disputes, many of which continue to be litigated before national courts.

Arbitration may present some important advantages over court litigation in this context, including in relation to the enforceability of arbitral awards. This is because an award issued by an international arbitral tribunal can be recognized and enforced, subject to narrowly circumscribed limitations, under the New York Convention on the Recognition and Enforcement of Arbitral Awards across the 172 Contracting States. The determination of global (F)RAND terms by a single tribunal may therefore reduce some of the comity concerns that arise when multiple national courts are asked to determine terms for the same global SEP license.⁸ By contrast, while national courts can determine what terms for a global license are (F)RAND, the ability to enforce domestic court judgments in other countries is generally more complex.

That said, there remain questions as to whether the German courts or UPC will accept the arbitral determination emerging from proceedings initiated by a licensee before the English courts, which may affect parallel proceedings in those jurisdictions.

On the other hand, beyond the issue of lack of consent discussed below, concerns have been raised as to the lack of transparency surrounding arbitral determinations of (F)RAND terms. This is particularly so given the importance of royalty determinations to third parties in future negotiations for licenses to SEP portfolios relating to the same standard.

B. Consent to Arbitration

One of the principal objections raised by Acer and ASUS was that Nokia’s offer of an immediate license effectively compelled Acer and ASUS to arbitrate. They argued that this was inconsistent with the consensual nature of arbitration.

This issue was central to the Court of Appeal’s analysis in Acer & ASUS v Nokia. Arbitration is, by its nature, a consensual process. It is a matter of contract and a consequence of the parties’ agreement to arbitrate. However, Nokia’s RAND undertaking to the ITU-T, which formed the contractual basis for its obligation to license its SEPs on RAND terms, was silent on how disputes concerning the determination of those terms should be resolved and contained no provision requiring arbitration. Acer and ASUS accordingly argued that Nokia’s approach would be inconsistent with the “fundamental principle” that arbitration requires party consent.⁹

The Court of Appeal did not accept that argument. It held that Nokia’s adjustable license offer did not violate the principle of consent as it did not compel the licensees to arbitrate. Instead, it presented them with what it considered a choice, albeit one with consequences: they could either accept Nokia’s adjustable license offer under which the final RAND terms would be determined by ICC arbitration, or reject that offer. However, the consequence of the latter was that, if Nokia’s offer was itself RAND, Acer and ASUS risked being treated as unwilling licensees under the RAND framework (i.e., licensees who refuse to negotiate or accept a license under RAND terms) and subject to injunctive relief. It might be said that that is no choice at all.

Importantly, Acer and ASUS argued that they should nevertheless be regarded as willing licensees because they were prepared to enter into a license on RAND terms, provided those terms were determined by an English court rather than an arbitral tribunal. That argument failed: the Court of Appeal held that the licensees – in contrast with SEP owners – did not have the right to select one set of RAND terms in favor of another set of RAND terms. Specifically, licensees could not insist on court determination of RAND terms if Nokia’s proposed arbitral mechanism was itself RAND. The Court of Appeal held that that choice lay exclusively with Nokia, as the SEP owner. That is based on a wider, controversial principle that generally the SEP owner has the choice between two (F)RAND options. Although that principle has now become well established in the English High Court and Court of Appeal, it remains to be seen whether the UK Supreme Court will ultimately support it.

In reaching this conclusion, the Court of Appeal stated that there was an inherent asymmetry in (F)RAND disputes. While the courts (and arbitral tribunals) should “attempt to ensure that there is a level playing-field between SEP owners and implementers,” the Court of Appeal said that it was not the function of the courts to attempt to “redress perceived imbalances” inherent in the (F)RAND system (such as a SEP owner’s choice of the venue for the (F)RAND determination).¹⁰ However, this rests on the underlying controversial premise that the SEP owner is entitled to elect the terms preferable to it.

The Court of Appeal referred to two further points that appear to have influenced its decision. To begin with, it noted that while the two licensees objected to Nokia’s arbitration proposal, they “made no counterproposal for any different form of arbitration.”¹¹ The Court of Appeal stated that the position might have been different if the licensees had made a “legitimate and substantiated objection” to Nokia’s proposed arbitral mechanism.¹² The Court of Appeal therefore left open the possibility that, if such an objection had been advanced, its approach to Nokia’s proposal may have been different.

The Court of Appeal also appears to have been influenced by a belief that international arbitration is an appropriate means for the determination of (F)RAND terms. The Court of Appeal highlighted the enforcement of arbitral awards under the New York Convention as the key advantage of arbitration over court litigation, enabling a single arbitral tribunal’s determination of global (F)RAND terms to be enforced internationally, whereas national courts generally enforce through territorially limited orders. It is notable that Lord Justice Arnold, who delivered the Court of Appeal’s lead judgment, has adopted this view of international arbitration as a suitable mechanism for resolving global (F)RAND disputes repeatedly in both his judicial and extra-judicial writings in recent years.¹³

C. The Seat Left Unspecified

One feature of Nokia’s arbitration proposal was that it did not specify an arbitral seat. Although the Court of Appeal did not address this point expressly, this is noteworthy from an arbitration perspective. The seat – or legal place – of an international arbitration determines the procedural framework of the arbitration (often referred to as the lex arbitri), the courts that may supervise it, and the grounds on which any award may be challenged. These are not merely technical matters: they can materially affect the cost, speed, and certainty of the arbitral process and the enforceability of the resulting award.

While Nokia’s arbitration proposal expressly specified the ICC Rules and a three-member tribunal, it left the seat of the arbitration to be chosen by Acer and ASUS. This choice was subject to the condition that the chosen seat must be (i) a “recognised arbitration jurisdiction”; and (ii) not the home jurisdiction of either party.¹⁴

As a matter of arbitration law, an express choice of seat is not a requirement for the validity of an arbitration agreement. Where the parties do not agree a seat, it will be determined for them – typically, either by the arbitral tribunal itself or by a designated arbitration institution.

In this case, Nokia specified that the ICC Rules would govern the arbitration. Accordingly, if the licensees were to fail to designate the seat, the ICC Court of Arbitration would designate the seat pursuant to Article 19(1) of the ICC. ¹⁵ In practice, the ICC Court would first seek the parties’ views and, where possible, encourage agreement. If agreement could not be reached, the Court would fix a seat it considers appropriate in the circumstances. Although the ICC Rules do not prescribe a closed list of factors, the ICC Court generally places particular weight on the neutrality of the proposed seat, the quality and suitability of its arbitration law and supervisory courts, its accessibility to the parties, and the ease with which any resulting award may be supported and enforced.¹⁶

IV. POST SCRIPT: NOKIA DELAYS ARBITRATION

The proceedings between Acer, ASUS, and Nokia came before the English courts again in July 2026, two months after the Court of Appeal’s judgment and following the parties’ entry into the adjustable license contemplated by that judgment. In a further judgment dated 28 July 2026, [2026] EWHC 1939 Pat, the Patents Court addressed an application by Acer and ASUS to permit the use of documents produced in the English court proceedings in the upcoming arbitration. Although Nokia said it did not object in principle, it resisted the application on the basis that this was an issue that should be put to the arbitral tribunal.

The Patents Court rejected Nokia’s objection and amended the confidentiality regime to permit the parties’ legal representatives to use certain materials disclosed in the English court proceedings for the purposes of the arbitration, before the tribunal had been constituted. In doing so, it gave effect to the Court of Appeal’s order since the adjustable license that had been entered into following the Court of Appeal’s judgment provided that Nokia was obliged to disclose these materials in the arbitration.

Moreover, the Patents Court expressed surprise that Nokia had not agreed to what the judge regarded as an “obviously necessary step” and observed that the Court of Appeal was likely to have envisaged the cooperation of the parties to commence the arbitration promptly, rather than generating further satellite disputes of this kind.¹⁷

V. CONCLUDING REMARKS

Acer & ASUS v Nokia is noteworthy because it has provided SEP owners with a potential mechanism to divert licensing disputes out of the English courts – even when commenced on a contractual basis by the licensee – and into arbitration, by offering an immediate interim license that protects the licensee from injunctive relief while the final (F)RAND terms are determined in arbitration. It is also an endorsement of arbitration as a viable potential alternative and a practical means of resolving global (F)RAND disputes. Nonetheless, in so far as it effectively compels arbitration, it is controversial, and it remains to be seen whether this development will endure. That is particularly so, given that it relies on a principle that the SEP owner gets to choose between two (F)RAND options and is dismissive about complaints of asymmetry.

The Court of Appeal’s decision carries several practical lessons for (F)RAND licensing negotiation.

First, arbitration is now recognized as a potential legitimate route to discharging and resolving (F)RAND obligations. It must therefore feature in the strategic planning of both SEP owners and licensees from the outset of negotiations.

Second, the structure and surrounding terms of an arbitration proposal matter. An offer is likely to be treated as (F)RAND where it pairs an immediate, interim license that removes the threat of injunctions with a credible, balanced, and genuinely neutral process for determining the final license terms. Merely offering the prospect of a license following arbitration is not enough.

Third, the Court of Appeal’s follow-on judgment of 18 May 2026 marks a clear boundary: the choice of forum for determining a party’s own SEPs remains with that party, so neither side can use a (F)RAND offer to force the other’s separate portfolio into its arbitration (or other proceedings of its choosing).

Fourth, parties should give thought to the design of any arbitral process early in negotiations. As arbitration may become a more prominent forum for global (F)RAND disputes, parties will need to consider not only whether to arbitrate, but how a prospective arbitration should operate. Key issues include the applicable rules and seat of the arbitration, which determine the procedural framework and the courts that will supervise the arbitration; tribunal composition, including whether the tribunal should combine arbitration, technical, and SEP licensing expertise; disclosure, particularly whether the process should provide access to the necessary materials to test the parties’ cases; and confidentiality and transparency, including whether and in what form the award may be made public. Addressing these matters when formulating the arbitration proposal may reduce later procedural disputes and ensure that the process is capable of delivering an efficient and credible determination of global (F)RAND terms.