FRAND Quarterly: Navigating the Global SEP Landscape – January 2024

FRAND Quarterly: Navigating the Global SEP Landscape – January 2024

Client Alert


This marks the first issue of WilmerHale’s FRAND Quarterly: Navigating the Global SEP Landscape, a bulletin that will highlight developments about the licensing, litigation, and regulation of patents that are or are claimed to be essential to industry standards (SEPs) and are subject to commitments to be licensed on fair, reasonable and non-discriminatory (FRAND) terms. Each quarter, we will cover important developments spanning the globe that impact SEP litigation and FRAND licensing.

The end of 2023 saw further developments in courts determining FRAND terms on a global basis. Three over-arching trends emerged:

  1. More global rate-setting possibilities: More jurisdictions declared that they could set global FRAND terms and, in the case of China, the No. 1 Intermediate People’s Court of Chongqing in Nokia v Oppo set such terms in a December decision. Earlier, in October 2023, the Delhi High Court in India announced it would set FRAND terms in litigation between Nokia and Oppo if the parties withdrew parallel proceedings in other countries. 
  2. Licensee-led actions: Cases brought by potential licensees to have courts determine global FRAND terms were, and in the early days of 2024 continue to be, on the rise.
  3. License transparency: Mechanisms to increase the transparency and availability of FRAND rates – particularly comparable licenses – to potential licensees continue to be a focus of legislators and judges.

United States

  • USPTO, NIST, and ITA hold public listening session following Requests for Information on standards and intellectual property. On September 20, 2023, the United States Patent and Trademark Office, the National Institute of Standards and Technology, and the International Trade Administration held a public listening session for stakeholder input on questions regarding international standards, specifically standards that will be used to implement the National Standards Strategy for Critical and Emergency Technology issued by the White House in May 2023. A recording of the event, including the questions posed, is available online.

The listening session occurred less than two weeks after the September 2023 Requests for Information issued jointly by USPTO, NIST, and ITA and individually by NIST. Each Request received dozens of written comments from academics, think tanks, industry associations, corporations, and others, expressing a diversity of views. On FRAND issues, a number of submissions called for more oversight of SEP licensing to protect U.S. operating companies (including small- and medium-sized businesses) from non-FRAND licensing demands. Those submissions pointed to a regulation proposed by the European Union to address SEP negotiations (discussed further below) as a potentially useful example of a regulatory solution. Others called on the agencies to avoid EU-style regulation and advocated for loosening the eBay requirements for injunctive relief on SEPs. 

  • District court holds that prior SEP owner’s non-FRAND conduct is not imputable to current owner. On January 8, 2024, Judge Rodney Gilstrap in the United States District Court for the Eastern District of Texas held that the alleged non-FRAND conduct of ZTE Corp., the prior owner of certain 5G SEPs asserted against Samsung Electronics, could not be imputed to the present patent owner and plaintiff, G+ Communications. The transfer of the asserted SEPs from ZTE to G+ occurred while Samsung was in ongoing negotiations with ZTE for a license to ZTE’s SEP portfolio. Prior to executing the license with Samsung, ZTE did not expressly disclose that it had transferred some of its SEPs to G+, or that ZTE retained a 20% net royalty on all proceeds generated from G+’s licensing of those SEPS. Samsung argued that ZTE’s conduct in transferring the patents at issue to G+ and retaining a financial interest in their assertion by G+ without disclosing that it was doing so violated its FRAND obligations to the European Telecommunications Standards Institute (ETSI). Specifically, Samsung argued that ZTE’s conduct violated its obligation to negotiate in good faith towards a FRAND license. According to Samsung, ZTE’s conduct followed the patents with their transfer to G+. But the court held that ZTE’s conduct could not be imputed to G+ under applicable French law unless Samsung could show that G+ was ZTE’s alter ego. The court, however, also held that Samsung could present evidence of ZTE’s conduct to the jury as relevant to defend against G+’s allegations of willful infringement. Whether Samsung reasonably believed that its license agreement with ZTE covered G+’s asserted SEPS would be part of the totality of the circumstances that the jury could consider in deciding willful infringement. Following the court’s decision, G+ withdrew its willful infringement allegations. On January 26, 2024, a jury found that Samsung infringed two of the three patents-in-suit, found the remaining patent invalid to a person with ordinary skill in the art, and rejected Samsung’s claims that G+ did not negotiate in good faith.


  • Proposed EU SEP Regulation: state of play and next steps. On April 27, 2023, the European Commission proposed an SEP Regulation to reform the framework for licensing and litigation of SEPs in the EU. The SEP Regulation proposed (1) creation of an SEP registry, (2) essentiality evaluations of registered SEPs, (3) a determination of aggregate royalties for certain standards, and (4) a process for bilateral FRAND determinations before parties undertake EU SEP litigation. The Commission asked for stakeholder feedback on the proposal. In broad terms, SEP licensees and representative associations were supportive, while major SEP holders were more critical.

On October 2, Marion Walsmann, the European Parliament Rapporteur for the SEP Regulation, published a draft report on behalf of the Parliament’s Committee on Legal Affairs (JURI), proposing significant amendments to the draft Regulation. Among other things, the draft report proposes restricting the FRAND out-of-court dispute resolution mechanism, in favor of negotiations between the parties. The Parliament’s Committee on International Trade (INTA) and Committee on Internal Market and Consumer Protection (IMCO) issued their own draft opinions on October 2 and 18, respectively. 

The JURI Committee voted on its draft report on January 24, with thirteen votes in favor, ten abstentions, and no votes against. Next, the European Parliament will vote on the JURI report. Then, the SEP Regulation will enter the “trilogue” process, during which the Commission, the Council of the EU (Council), and the European Parliament will negotiate a provisional political agreement on the text. The SEP Regulation would then need to be formally adopted separately by both the Council and the European Parliament. Given the scheduled elections for the European Parliament in early June 2024, there may be some delay before the Regulation comes into full force.

United Kingdom

  • Licensee-led FRAND actions increase in the UK. Following UK FRAND determinations in suits brought against Lenovo and Apple, Lenovo, as a prospective licensee, filed suits against SEP holders Ericsson and InterDigital in the UK.  In two of these cases HP 2023-000031 (InterDigital) and HP-2023-000036 (Ericsson), Lenovo is asking the English Patents Court to determine the FRAND terms for licenses to the patents that InterDigital and Ericsson committed to ETSI to license on FRAND terms.  Lenovo’s claims include a declaration that, because it has undertaken to enter the court-determined license, Lenovo is effectively “already licensed,” and so InterDigital and Ericsson should be barred from pursuing injunctive relief. 
  • Panasonic faces criticism from judge arising from parallel FRAND litigation. In Panasonic v Xiaomi & Oppo (English Patents Court, case no. HP-2023-000025), interim hearings in November saw the FRAND trial expedited and scheduled to take place in October 2024, before the patent validity and infringement trials. This scheduling is in line with current trends of the English Patents Court to free the court’s calendar of multiple patent validity and infringement trials. The hearings also put the spotlight on Panasonic simultaneously seeking global FRAND determinations on its 3G/4G portfolio in both the UK and China, while also bringing individual patent infringement actions seeking injunctions in Germany and the Unified Patents Court in Europe (UPC). Ahead of the November hearings in the UK, both parties committed to enter into the future license to be determined by the U.K. court. Panasonic, however, would not go as far as to commit to not seeking and enforcing injunctions in its parallel German and UPC actions in the interim. This reservation of Panasonic’s ability to leverage injunctive relief drew criticism from the Judge (Meade J) in the second part of the split-hearing ([2023] EWHC 2872 (Pat), §§14;19) and resulted in the expedited trial.
  • UK’s top competition judge spotlights confidentiality issues in court. In January, the President of the UK’s Competition Appeal Tribunal (CAT), Mr. Justice Marcus Smith, issued guidance on the confidentiality of information in proceedings. The Judge, who oversaw the FRAND determination between Optis/Unwired Planet and Apple, warned that confidentiality regimes for handling confidential information (1) are becoming too complicated, (2) must be properly justified, and (3) should be worked out well in advance of trial. He also noted that documents over five years old would not usually be considered confidential. This guidance follows an increasing trend in the U.K. courts to allow in-house counsel restricted access to the opposing parties’ “comparable” FRAND licenses.


  • China joins the UK in setting global FRAND rates. On December 4, 2023, the Chongqing First Intermediate People’s Court made history by setting China’s first global FRAND rate in a dispute between Nokia and Oppo. Nokia has publicly announced its intention to charge €3/unit (approximately $3.25) for its 5G patents. Instead, the court set lower rates for different cellular standard generations and geographical regions as follows: (1) $0.477/unit for 4G SEPs in China and other less developed territories; (2) $0.777/ unit for 4G SEPs in more developed territories; (3) $0.707/unit for 5G SEPs in China and other less developed territories; and (4) $1.151/unit for 5G SEPs in more developed territories. While Oppo expressed its willingness to comply with the Chinese global FRAND rates, Nokia was reportedly planning to appeal. On January 24, 2024, Nokia and Oppo announced they reached a global settlement.


  • India ready to set global FRAND licenses if conditions met. In Nokia v Oppo, CS(COMM) 303/2021, the October 31, 2023 judgment from Justice Prathiba Singh held that the Delhi High Court could conduct a global FRAND determination if Nokia’s parallel case in the UK, and Oppo’s in China, were withdrawn. The conditions set by the court for an expedited FRAND trial in India to be considered are: (1) Nokia’s entire patent portfolio must be at issue (i.e., SEP and non-SEP portfolios); (2) Oppo must pay the security deposit already ordered by the court (amounting to 23% of the previous Nokia-Oppo license); and (3) the trial will set a global FRAND rate. Nokia had expressed willingness to withdraw its U.K. case, but had not agreed to the determination covering its non-SEPs. Oppo had not agreed that the rate should be global. As noted above, Nokia and Oppo entered a license on January 24, 2024. 

Latin America

  • Latin America’s increasing importance in SEP litigation continues with Lenovo injunctions. On November 24 and December 13, 2023, two preliminary injunctions were granted to Ericsson against Lenovo in lawsuits in Brazil and Colombia. Both the Brazilian and Colombian injunctions allegedly relate to Ericsson’s alleged 5G SEPs. These injunctions follow that obtained by Ericsson in Colombia against Apple in 2022, which was overturned on appeal before the cases settled.



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