Is FRAND becoming SEP (Somebody Else’s Problem)?

Ford Prefect once explained to Arthur Dent that “An SEP…is something that we can’t see, or don’t see, or our brain doesn’t let us see, because we think that it’s somebody’s else’s problem. That what SEP means. Somebody Else’s Problem. The brain just edits it out, it’s like a blind spot. If you look at it directly you won’t see it unless you know precisely what it is. Your only hope is to catch it by surprise out of the corner of your eye.”[1]

ETSI then introduced its IPR Policy in 1994, driven by competition law concerns. That Policy requires the disclosure of intellectual property rights, including patents, which are essential to standards, and seeks declarations that such rights be licensed on fair, reasonable and non-discriminatory (“FRAND”) terms. The Policy and any FRAND declarations under it are governed by French law, but ETSI does not identify how disputes should be resolved. Similar problems arise with many other standards development organisations.

Over the years, such disclosed patents have become commonly known as “Standard Essential Patents” or, again, “SEPs”. But ETSI and other SDOs typically treat determination of FRAND terms as Somebody Else’s Problem.

So are the courts that Somebody Else – and will they continue to be? 

The English courts have permitted a range of creative remedies to seek to solve SEP and FRAND problems, from declarations of non-essentiality in Nokia v InterDigital in 2004 (notably while refusing to stay proceedings pending ICC arbitration), through determination of global FRAND terms (with UK injunctions if they are not accepted) beginning in Unwired Planet v Huawei in 2017, and most recently to interim licence declarations in Panasonic v Xiaomi in 2024.

Meanwhile, the courts in Germany have tended to adopt a simpler solution - continuing to grant injunctions if the parties can’t agree terms, with a high burden being placed on defendants claiming to be implementing standards, whether in Orange-Book-Standard in 2009, the reference to the CJEU in Huawei v ZTE decided in 2015, the Sisvel v Haier judgments in 2020 (here and here) and the VoiceAge v HMD judgment of 2026. More recently, we have seen some interest in determining some FRAND terms in Germany and now before the UPC.

But it appears that, having spent years and a great deal of court time and resource dealing with these issues, the courts may be moving towards a conclusion that FRAND terms should in fact be Somebody Else’s Problem.

In England, there have been increasingly strong indications in recent years that the courts, while willing to determine FRAND terms if necessary, would prefer to see these determined in arbitration. For instance, in 2022, Arnold LJ in the Court of Appeal explained in Nokia v Oppo that “The only sure way to avoid these problems is to use a supranational dispute resolution procedure, and the only supranational procedure currently available is arbitration. If the parties do not agree to arbitration, however, the national courts must deal with the resulting jurisdictional disputes as best they can.” and that “This Court asked the parties whether they were willing to agree to arbitration of the dispute.” but the parties declined.

This has now resulted in a decision of the English Court of Appeal on 12 May 2026 in Acer v Nokia to stay RAND proceedings in favour of ICC arbitration where only the patentee had agreed to such arbitration, in circumstances where the patentee had also offered an Adjustable (interim) Licence providing for the stay of patent litigation pending the outcome of that arbitration. Curiously, such declining of jurisdiction by the English courts was already agreed as a basis for a FRAND dispute being arbitrated in 2014, in the Samsung commitments accepted by the European Commission.

The following day, the UPC Local Division Mannheim contributed its Settlement Proposal in Samsung v ZTE. That proposal suggested that the parties could agree on the sum of $640m for a five year licence as found to be FRAND by the Munich I District Court, or $730m for a six year licence as found to be FRAND by the Chongqing Intermediate People’s Court in China, or alternatively could agree to mediation (rather than arbitration) before the UPC’s brand-new Patent Mediation and Arbitration Centre (PMAC), which had opened its doors for mediation the previous day. 

Unsurprisingly, given recent tensions between the German, UPC and English courts, the Local Division Mannheim did not suggest the parties agree on the sum of $392m for a renewed licence, as it noted had been determined by the English High Court on 1 May 2026.

These tensions notwithstanding, it is notable that in successive days both the English High Court and the UPC Local Division Mannheim have made separate proposals for FRAND term determination to forms of Alternative Dispute Resolution. There are obvious differences between the ADR mechanisms proposed, but they do appear to be early signs that the courts now do want to make FRAND Somebody Else’s Problem. Just don’t look at it directly!