FRAND Quarterly: Navigating The Global SEP Landscape – May 2025

The beginning of 2025 saw two overarching trends in FRAND litigation:

• Amazon and Nokia, as well as Lenovo and Ericsson, settled their global litigation campaigns.
  
  • Ericsson sought to enforce injunctions against Lenovo and Motorola in Brazil and Colombia. Ericsson was also declared to be an "unwilling licensor" in the UK and Lenovo obtained a declaration of the terms of an interim license.
  • Amazon was given permission to seek an interim license declaration and order for specific performance against Nokia based on Swiss law (the law governing Nokia's RAND undertaking). If successful, this could have compelled Nokia to enter the declared interim license. However, Nokia enjoined Amazon in Germany and received positive indications in its U.S. International Trade Commission (ITC) proceedings that could have resulted in an exclusionary order.

• Courts around the world continue to expand their toolkits that affect FRAND litigation strategies.
  • UK courts continued to grant interim license declarations and/or permission to seek one. Common elements for a successful interim license declaration in Panasonic v Xiaomi, Lenovo v Ericsson and Alcatel & Nokia v Amazon have been:
    • Of the jurisdictions in which the parties are litigating, the UK must be the only forum willing to set a full global FRAND license and the proceedings are progressing.
    • The prospective licensee must have given an undertaking to enter the UK FRAND license.
    • Foreign injunctions must have been sought or obtained by the SEP owner notwithstanding that the prospective licensee committed to a FRAND determination in the UK, evidencing a breach of the FRAND obligation.
    • The SEP holder's conduct, including in seeking foreign injunctions, is designed to extract better terms than what the UK court would order.
    • The declaration could make the SEP holder reconsider its position and grant an interim license.
  • The Supreme People's Court of the People's Republic of China issued its first ever anti anti-suit injunction in favor of Huawei, despite recognizing that SEP holders are generally limited in their ability to obtain injunctive relief. Following this decision, it appears that an anti anti-suit injunction is viable in China following a preliminarily finding from a lower court that the prospective licensee is not willing, while the SEP licensor is.
  • The Court of Justice of the European Union issued a landmark ruling on jurisdiction in cross-border patent disputes. Any EU Member State court remains competent to decide an infringement case of a patent of any other country, even when invalidity is raised as a defence and even if national law requires separate revocation proceedings. Although the jurisdiction is only triggered depending on the defendants' domicile, the case potentially opens up an alternative pan-European injunction opportunity in SEP cases, other than the UPC.

United States

The Eastern District court of Texas ("EDTX") reaffirms order for discovery for use in German proceedings. On March 17, 2023, an Eastern District of Texas court granted Xiaomi's application for discovery in aid of a foreign litigation under 28 U.S.C. § 1782. Xiaomi sought discovery about a patent that was being asserted against it in Germany. The scope of the order was narrowed in August 2024 to documents relating to: (1) the valuation of Ox Mobile Technologies' ("OMT") patent portfolio; (2) previous licenses for the '582 patent, including the corresponding due diligence; and (3) the purchase price and assignment details of the '582 patent (previously acquired from a third-party).

OMT filed a motion for reconsideration arguing that Xiaomi failed to establish that the use of the documents was for proceedings before a foreign tribunal and that the court erred in weighing up the Intel factor (established in Intel Corp. v. Advanced Micro Devices, 542 U.S. 241 (2004), when determining whether to exercise court discretion) in favor of Xiaomi.

On March 5, 2025, the EDTX court found Xiaomi had satisfied its burden showing that the requested documents "will assist the German Court in determining whether respondents' licensing demands are fair and reasonable in light of the commercial value of respondents' portfolio," and are "relevant to determining whether the licensing terms offered by respondents were fair, reasonable, and non-discriminatory."

Further, regarding the Intel factors, the court held that the discovery sought by Xiaomi was likely unobtainable in the German proceeding and there was no requirement that the applicant "seek discovery in the foreign jurisdiction before seeking the assistance of a district court." The court also found that there was no evidence in the record suggesting that Xiaomi was attempting to evade restrictions on discovery in Germany and that the document request was sufficiently narrow so as not to be burdensome as it directly related to the German claim.

The Office of Unfair Import Investigations ("OUII") advocates for remedial orders in Nokia's ITC case against Amazon. On March 13, 2025, the OUII, which participates as a third party in investigations before the U.S. International Trade Commission ("ITC"), submitted a brief to the ITC advocating that Nokia was entitled to an exclusion order against Amazon on Nokia's video coding SEPs.

Amazon argued that a RAND obligation precluded the entry of an exclusion order under the public interest factors and that no remedy should issue or in the alternative, the remedy should be tailored (with an exception for warranty-based maintenance and service of products already purchased by consumers) or delayed. Nokia on the other hand advocated that the public interest factors did not apply and, in any event, did not outweigh its interest in enforcing its patents. The OUII contended that imposing a limited exclusion order would not be contrary to any public interest factors as there had been no showing of any harmful effect on public health and welfare or on consumers.

Please see below for further details on the Nokia and Amazon dispute.

Europe:

EU initiates WTO proceedings against China regarding SEP royalties for EU high-tech sector. On January 20, 2025, the European Commission requested consultations at the World Trade Organization (WTO) against China, regarding its patent enforcement practices. The Commission's press release states that China has "empowered its courts to set binding worldwide royalty rates for EU standard-essential patents without the consent of the patent owner." According to the Commission, this pressures innovative European high-tech companies, notably in the telecom sector, into lowering their rates on a worldwide basis, thus unfairly giving Chinese manufacturers cheaper access to those European technologies.

In the Commission's view, China's practices are inconsistent with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Further, the Commission contends that these practices also unduly interfere with the competence of EU courts for European patent issues. This request for consultations is the first step in the WTO dispute settlement procedure, with a litigation phase possible if these consultations do not lead to a satisfactory solution.

This matter is related to a different dispute relating to Chinese anti-suit injunctions that has also been challenged by the EU at the WTO. According to the EU, Chinese anti-suit injunctions effectively restrain high-tech patent holders by fining or otherwise sanctioning them if they seek to enforce their intellectual property rights through a non-Chinese court.

The EU filed a WTO dispute settlement case (DS 611) against China on February 18, 2022. A Panel decision was issued on February 21, 2025 and was planned to be published on April 10, 2025. However, this decision has not been published yet on the request of the EU, which suggests that the EU may be intending to bring an appeal.

European Commission withdraws proposed EU SEP Regulation. On February 11, 2025, the European Commission unveiled its Work Programme for 2025, "Moving forward together: A Bolder, Simpler, Faster Union" outlining the Commission's key initiatives in the coming year. Among other steps, the Commission removed the proposed EU SEP Regulation from the Annex of the Work Programme citing a lack of foreseeable agreement. As stated in the Work Programme, "the Commission will assess whether another proposal should be tabled, or another type of approach should be chosen." Overall, approximately 40 regulatory proposals were withdrawn by the Commission in an effort to cut "red tape".

On February 19, 2025, the rapporteur, shadow rapporteurs and coordinators of the Committee on Legal Affairs of the European Parliament wrote a letter to the European Commission expressing concern about the intended withdrawal. According to the signatories of the letter, this withdrawal took place unilaterally, without consultation with the Parliament and the Council, and the Commission's reason for the withdrawal ("no foreseeable agreement") was unsubstantiated. The letter expressed support for the Regulation as it would lead to greater transparency, improve innovation in the technology sector, strengthen the competitiveness of the European economy, and protect SMEs, which face setbacks in the current licensing landscape.

Court of Justice of the EU issues landmark ruling on jurisdiction in cross-border patent disputes. On February 25, 2025, the Court of Justice of the EU issued a landmark ruling on jurisdiction in cross-border patent disputes (case C-339/22, BSH Hausgeräte GmbH v Electrolux AB). According to the Court, a national court of the EU Member State of the defendant's domicile remains competent to decide a patent infringement case for patents granted or validated in third countries (such as the UK or even non-European Patent Organization members such as the US), even when invalidity is raised as a defence. Any such decisions by EU Member State national courts have only inter partes effect, i.e., a scope limited to the parties to the proceedings. By contrast, only the courts of the third country in which a patent is granted/validated have jurisdiction to declare that patent invalid on a national level.

In other words, a national court in Sweden - where the alleged infringer was domiciled in the case in question - has jurisdiction to rule on an infringement action, even when the alleged infringer raises, as a defense, that the Turkish and other non-Swedish parts of the European patent in question were invalid. However, the determination of invalidity by the Swedish court is limited to the case at issue and does not lead to the nullity, in whole or in part, of the patent in Turkey or in other countries.

This judgment facilitates cross-border patent litigation, particularly by allowing patent holders to bring an infringement action in a single EU Member State in relation to different national parts of a European patent, without an invalidity defense for a patent registered in another country resulting in a lack of jurisdiction.

Nokia secures German injunction against Amazon Prime Video. On February 7, 2025, Nokia secured an injunction against Amazon in the parties' global dispute over license terms for video patents. This is the first sales ban that Nokia obtained against Amazon's streaming service. (Nokia had previously obtained a German injunction against Amazon's Fire TV Stick streaming devices from the Munich Regional Court in September 2024). The Düsseldorf Regional Court granted the injunction based on European Patent 2 271 048, which was found to be infringed by Amazon Prime Video. However, the court also found that another Nokia patent, EP 2 130 150, had not been infringed. To enforce the injunction during Amazon's appeal, Nokia would have needed to provide a security deposit of EUR 646.75 million. This case was part of a series of video-related SEP and non-essential patent cases filed by Nokia in late 2023 against Amazon in Germany, the US, the UK, Brazil, India and before the UPC. Nokia and Amazon announced that they settled these proceedings on March 31, 2025.

Munich appeal court rejects HMD's appeal. On March 20, 2025, the Higher Regional Court of Munich handed down its decision in HMD's appeal of the Munich Regional Court's decision. The Higher Regional Court rejected HMD's appeal and confirmed the decision of the lower court, finding HMD to have infringed the EVS speech-coding patent EP 2 102 619 owned by VoiceAge and to be an unwilling licensee.

In the context of these appeal proceedings, the European Commission had also submitted an amicus brief intervention to the Higher Regional Court, reiterating the need for national courts to properly apply the CJEU's Huawei v ZTE decision (discussed in more detail in our previous newsletter). The court, however, deviated from this approach, noting that "[s]trict compliance with [the Huawei v ZTE] steps should not be an end in itself". According to the Higher Regional Court, the defendant must post a security deposit that reflects the last global license offer made by the patent holder – rather than the counteroffer by the implementer – in order to be able to invoke a FRAND defense.

On that basis, the Higher Regional Court found that HMD had not demonstrated its willingness to take a license on FRAND terms, as it declined to provide sufficient security. The appeal court has given HMD permission to appeal the FRAND defense issue to the Federal Court of Justice, because the highest court has not yet decided how that defense interacts with the provision of sufficient security.

Unified Patent Court (UPC)

UPC court fees reimbursed following Dolby's SEP claim withdrawal. On February 13, 2025, it was reported that the UPC granted Dolby's application to withdraw a patent infringement claim against several Asus companies. The UPC also dismissed Asus' counterclaim to invalidate Dolby's patent following a settlement. The UPC court ordered that the parties be reimbursed 60% of the court fees they had each paid.

Principles advocated by the European Commission in its HMD amicus brief rejected by UPC. On December 18, 2024, the UPC Munich local division handed down its second FRAND decision in which it enjoined Netgear from infringing Huawei's SEPs relating to Wi-Fi 6 in seven countries, including Germany, France and Sweden. As part of the court's decision on a party's willingness to licence, the Munich local division took an approach similar to that of the UPC Mannheim local division in Panasonic v Oppo (which has since then settled on January 14, 2025), by reviewing the conduct of the parties throughout the negotiation period instead of following the European Commission's position in its HMD amicus brief supporting the step-by-step process established by the CJEU in Huawei v ZTE.

United Kingdom:

UK court dismisses Huawei's jurisdiction challenge in MediaTek fight. On March 18, 2025, Mr Justice Leech held that MediaTek satisfied the requirements for serving its global FRAND determination claim out of the jurisdiction in China. The Judge found: (1) that there were several issues to be tried (such as which party would be a net payer and the industry practice in relation to the level in the supply chain at which licensing occurred—i.e., cellular chip versus end product); (2) MediaTek had a good arguable case in relation to allegations of discriminatory conduct by Huawei; and (3) that the English court was the appropriate forum for the global FRAND determination because – unlike the UK, Huawei's parallel Chinese proceedings would not be setting the terms of a global FRAND license, but rather setting a Chinese rate for the Chinese patents and any damages for anti-competitive behavior.

The Judge found Huawei's multi-jurisdictional litigation served only one purpose in that it hoped to achieve "terms more favorable to it than the Patents Court would order for a cross-license of both global portfolios or reciprocal licenses." Accordingly, Mr Justice Leech refused Huawei's application for a case management stay.

UK Court of Appeal refuses Tesla's jurisdiction appeal. Tesla initiated proceedings seeking a finding that the Avanci patent pool, which licenses SEPs on behalf of their owners, is bound by FRAND and a declaration of what FRAND terms are for an Avanci license. Tesla sued InterDigital as one of the participants in the pool seeking the same FRAND declaration as for the platform as well as challenging the validity of some of InterDigital's UK patents. Both defendants challenged jurisdiction. On July 15, 2024, the first instance judge held that the UK court had no jurisdiction to set a global FRAND rate for Avanci's 5G pool, given the lack of contractual entitlement to enforce individual patent pool member's ETSI obligations against Avanci. This decision was summarized in our July 2024 newsletter.

On March 6, 2025, the Court of Appeal ruled on Tesla's appeal of the first instance decision. Phillips LJ held that there was no contractual obligation that would give the English Court jurisdiction to determine the FRAND terms of a license for the SEPs on the Avanci 5G platform, even if all the SEP owners were joined or represented in the proceedings. There was simply no obligation owed to Tesla by the owners of the SEPs to grant a collective license as claimed, or by Avanci to do so. Whipple LJ agreed.

In his dissenting judgment, Lord Justice Arnold LJ considered that the first instance decision was wrong because Tesla did benefit from individual contractual FRAND obligations owed by all the members of the Avanci 5G pool pursuant to clause 6.1 of the ETSI IPR Policy that could be enforced against Avanci. Arnold LJ considered that, as a matter of commercial reality, Tesla has to take a licence to the Avanci 5G pool because it would be impractical to negotiate bilateral licences with every one of the members. Arnold LJ also considered that a FRAND declaration for a pool licence would serve a useful purpose as it is possible or likely that it would force Avanci to reconsider its position.

The Court of Appeal denied Tesla permission to appeal to the Supreme Court, but Tesla can seek permission to appeal directly from the Supreme Court.

UK Court of Appeal grants an interim license declaration to Lenovo against Ericsson. On February 28, 2025, the UK Court of Appeal granted a declaration that Lenovo was entitled to be offered a global interim license and set the terms of that license. However, Ericsson refused to offer the interim license, resulting in the court granting a further declaration that Ericsson was an "unwilling licensor." Lord Justice Arnold, giving the main judgment, found it irrelevant that Ericsson had commenced proceedings in the US first, and had neither invoked the jurisdiction of the UK court, nor committed to take the UK FRAND rate determination. Although Lenovo is both a SEP holder and licensee, the court treated it solely as a licensee for this decision. Key to the decision was that Lenovo had: (1) committed to accept the UK court's FRAND determination; and (2) had also offered to accept the U.S. court's decision insofar as it set global FRAND terms, if Ericsson stopped seeking injunctions - which Ericsson did not. The court also found that only the UK court was in a position to set a global cross-license FRAND rate. In the US, Ericsson merely sought a declaration of FRAND compliance, rather than a fully global FRAND rate determination. The court viewed Ericsson's behavior as favoring injunctive pressure, not jurisdictional preference. That was described as "hold up."

Ericsson, however, alleged Lenovo had been "holding out" for 16 years. The Court of Appeal considered that this was no longer a valid argument after Lenovo undertook to accept a UK FRAND license. Under InterDigital v Lenovo, limitation periods do not apply to SEP cases, and Ericsson would still receive backdated FRAND payments with interest, meaning any prior delay by Lenovo was effectively cured. Furthermore, Ericsson's ongoing pursuit of exclusionary relief before the U.S. ITC was described by the court as a means to coerce Lenovo into accepting more favorable terms and found to violate Ericsson's good faith obligation from its ETSI FRAND commitment.

Arnold LJ declared that the interim license would require Lenovo paying a nine-figure interim license fee, calculated as a midpoint between both parties' offers. The rate was to be adjusted upon final determination. Ericsson chose not to offer the interim license and instead applied for permission to appeal to the UK Supreme Court. Ultimately, on April 3, 2025, Lenovo and Ericsson reached a partial settlement, putting an end to all proceedings worldwide. The unresolved FRAND terms will be dealt with through binding arbitration.

UK Court of Appeal green lights Amazon's interim license argument against Nokia. On January 28, 2025, the UK Court of Appeal granted Amazon permission to pursue an interim license declaration, despite Nokia not committing to the UK court's jurisdiction. Citing the earlier Panasonic v Xiaomi decision, the court reiterated that the primary remedy in SEP disputes is financial, not injunctive. In its global litigation campaign against Amazon, Nokia had sought injunctive relief in the US (ITC), Germany, the UPC, and Brazil. Nokia argued that unlike Panasonic, Nokia had not initiated proceedings in the UK or sought to enforce SEPs in the UK. The court held that these distinctions did not materially alter the legal principles established in Panasonic v Xiaomi. Moreover, Amazon's argument under Swiss law, seeking specific performance of Nokia's (F)RAND undertaking (to compel entry into an interim license), was found to be arguable and legally significant.

Nokia's reliance on a German court decision declaring its offer (F)RAND and Amazon an unwilling licensee was also dismissed as inadequate proof of good faith. Arnold LJ noted that the German ruling could not establish Nokia's compliance with (F)RAND duties in the UK, especially as German courts do not determine (F)RAND terms. He was critical of Nokia for simultaneously opposing the UK court jurisdiction while pursuing injunctions elsewhere - a contradiction that, in his view, undermined any claim of good faith. Nokia's conduct was open to challenge considering Amazon had made a substantial offer (including a bank guarantee). The case was due to proceed to a trial on the interim license declaration and specific performance arguments in May 2025, but a global settlement was reached on March 31, 2025, resolving all pending litigation.

India:

Delhi High Court grants FRAND damages to Philips over expired DVD-related SEP.On February 20, 2025, the Delhi High Court ruled in favor of Philips in a set of three consolidated patent infringement suits against Pearl Industry, Siddhart Opticals, and Powercube Infotech. The cases concerned Philips' expired DVD-related SEP (Indian Patent No. 218255). Although Philips' SEP had expired in 2015, the court held it was valid, essential, and infringed during its term. The defendants were found to be unwilling licensees, having repeatedly refused to take a FRAND license. Philips was awarded damages based on lost royalties, aggravated damages for the defendants' misconduct, interest, and costs. Notably, the court used Philips' standard rate of $0.03 per DVD, and due to the defendants' failure to produce accurate records, damages were calculated using third-party information provided by Philips. The resulting awards were: $750,000 against Pearl Industry, $195,000 against Siddhart Opticals, and $1,497,900 against Powercube Infotech. The court was highly critical of the defendants' non-cooperative conduct, including their deliberate withholding of DVD sales data, which the court found hampered the damages assessment and necessitated reliance on external sources. It also found that the defendants had full knowledge of Philips' licensing framework and actively evaded their obligations. In light of this behavior, the court imposed aggravated damages and set an interest rate of 12% per annum from the date of the lawsuit's filing until full payment is made. Additionally, Philips was awarded its litigation costs, with the court condemning the defendants for raising baseless revocation arguments and adopting an obstructive stance designed to delay and deny Philips relief.

China:

Chinese Supreme Court grants first anti anti-suit injunction in a SEP case. On December 24, 2024, the Supreme People's Court of China issued its first-ever anti-anti-suit injunction (AASI) in the global Wi-Fi 6 SEP dispute between Huawei and Netgear. The AASI barred Netgear from initiating or continuing any foreign legal or administrative actions, including in courts or customs authorities, that would prevent Huawei from pursuing infringement proceedings or enforcing the AASI itself. Additionally, Netgear was ordered to withdraw any such foreign applications already filed. The court acknowledged that while SEP holders are generally limited in their ability to obtain injunctive relief because of their FRAND obligations, the balance of behavior weighed in Huawei's favor insofar as the lower courts had preliminarily found Netgear not to be a willing licensee and Huawei a willing SEP licensor. The court reasoned that Netgear's pursuit of an anti-suit injunction in the US was a form of pressure to derail the Chinese proceedings, and that the harm to Huawei from such interference would outweigh any prejudice to Netgear from the AASI. The AASI included a significant enforcement mechanism, threatening Netgear with a daily fine of RMB 1 million for non-compliance. Ultimately, Netgear joined the Sisvel Wi-Fi 6 patent pool (of which Huawei is a member), leading to a global settlement with Huawei that resolved the litigation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.