The UPC’s Emerging FRAND Framework

Need to know

• The UPC consistently applies the CJEU’s Huawei v ZTE¹ framework to FRAND defenses but increasingly interprets it through a conduct-based and German-influenced lens.
• Decisions place significant emphasis on the implementer’s obligation to demonstrate clear, timely, and continuous willingness to take a license.
• Failure to satisfy the “willing licensee” requirement may defeat a FRAND defense before the court reaches questions concerning royalty rates or license terms.

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Three years after its launch in June 2023, the Unified Patent Court (UPC) has established itself as a central forum for standard essential patent (SEP) enforcement in Europe. The combination of centralized jurisdiction, rapid proceedings, and the availability of pan-European (and beyond) injunctive relief (see “Life After Electrolux”) has fundamentally altered the strategic landscape for both SEP holders and implementers.

Although the UPC’s SEP jurisprudence is relatively young, a discernible fair, reasonable, and non-discriminatory (FRAND) licensing framework is emerging. Three decisions — Panasonic v. Oppo², Huawei v. Netgear³ and Dolby v. Beko/Arçelik⁴ — provide an indication of the court’s direction of travel.

While the UPC consistently treats Huawei v ZTE¹ as the governing legal framework for assessing FRAND defenses, the court’s decisions suggest an increasing convergence with German SEP jurisprudence, particularly regarding the assessment of implementer willingness and the consequences of failing to engage constructively in licensing negotiations.  

The development of UPC SEP jurisprudence

Panasonic v. Oppo: The first UPC FRAND judgment

The UPC’s first comprehensive FRAND decision was issued by the Mannheim Local Division in Panasonic v. Oppo² in November 2024. 

The court confirmed that Huawei v ZTE¹ provides the governing framework for assessing FRAND defenses but rejected an overly formalistic application of the Court of Justice of the European Union’s (CJEU’s) requirements. Instead, the court emphasized that willingness must be assessed in light of the parties’ overall conduct during negotiations rather than through a purely procedural checklist.  

The decision also confirmed the UPC’s willingness to adjudicate FRAND-related issues and laid the foundations for the court’s emerging conduct-based approach. (For more details thereon, please see “Key Insights From the UPC’s First SEP Decision.”)

Huawei v. Netgear: Focus on the implementer’s obligations

In Huawei v. Netgear³ in December 2024, the Munich Local Division further developed the procedural architecture of UPC FRAND litigation.

The judgment aligns closely with the Mannheim Local Division’s earlier decision in Panasonic v. Oppo, including its focus on the parties’ conduct throughout the negotiation process rather than on formal declarations of willingness. At the same time, the Munich Local Division departed from the European Commission’s position by not requiring that an infringement notice contain all necessary details at the outset. It also confirmed that a patent proprietor may comply with FRAND obligations even when submitting multiple offers, with the assessment focusing on the final offer, and that an initial non-FRAND offer may legitimately serve as a starting point for negotiations. In addition, the court accepted that offering a pool license may suffice to meet the patentee’s competition law obligations.

Importantly, the decision provides further granularity on the implementer’s obligations at the counter-offer stage. The court held that a compliant counter-offer must be made without delay, be supported by appropriate security for past and ongoing use, and be accompanied by a proper accounting of the implementer’s use of the asserted patents.

Dolby v. Beko/Arçelik: Reinforcing the German-style approach

The Duesseldorf Local Division’s decision in Dolby v. Beko/Arçelik⁴ of March 2026 represents the most significant development in UPC FRAND jurisprudence to date.

The court expressly aligned itself with the earlier decisions in Panasonic v. Oppo and Huawei v. Netgear, confirming that Huawei v. ZTE remains the governing framework for FRAND defenses before the UPC. At the same time, the judgment reflects an increasingly strict approach to implementer conduct that closely resembles recent German SEP case law.

Perhaps most significantly, the court concluded that the defendants had failed to provide a sufficiently clear and timely declaration of willingness to take a license. Because that threshold requirement was not met, the court did not proceed to assess whether Dolby’s licensing offer was itself FRAND.  

The decision therefore suggests that failure to satisfy the willingness requirement may be fatal to a FRAND defense irrespective of any subsequent debate concerning royalty rates or licensing terms.

Key elements of the emerging UPC FRAND framework

Conduct matters more than formalities

Across all three substantive FRAND decisions, the UPC has rejected a rigid checklist approach to Huawei v. ZTE. Instead, the court increasingly focuses on whether the parties genuinely sought to conclude a license agreement. The analysis is therefore practical and conduct-driven rather than purely procedural.

The “willing licensee” as the central battleground

Recent UPC decisions suggest that the decisive issue in many SEP disputes is not necessarily the substantive assessment of FRAND terms but whether the implementer has demonstrated willingness to take a license at an early stage of negotiations.  

The court expects a clear and unambiguous expression of willingness followed by active participation in licensing discussions. Delayed responses, qualified statements, prolonged silence, or negotiation tactics perceived as obstructive may jeopardize a FRAND defense before the court reaches any assessment of the offered license terms.  

In practice, the UPC decisions indicate that the willing licensee analysis may become the decisive gateway issue in SEP litigation.

Market dominance and standards-based technologies

Another notable aspect of Dolby v. Beko/Arçelik is the court’s approach to market dominance.

The Duesseldorf Local Division accepted that a dominant position may exist where access to technology covered by a widely adopted standard is commercially indispensable. The court emphasized that manufacturers could not realistically market competitive products without compliance with the relevant standard and highlighted the importance of consumer expectations regarding interoperability and standards compliance.  

Although the implications of this aspect of the judgment remain to be tested, the decision suggests that UPC courts may be prepared to assume dominance relatively readily in SEP disputes involving widely adopted standards.

FRAND rate determination remains open

One of the most significant unresolved questions concerns the UPC’s future role in determining FRAND license terms and royalty rates.

To date, the court generally has avoided setting specific global FRAND rates comparable to the approach adopted by the English courts. Instead, the focus has remained on negotiation conduct and compliance with the Huawei v. ZTE framework.

Whether the UPC ultimately will assume a broader role in determining global licensing terms remains one of the most important unresolved questions in European SEP litigation.

The emerging role of the PMAC

The UPC Patent Mediation and Arbitration Centre (PMAC) recently has commenced operations and holds promise as a valuable venue for resolving valuation and licensing disputes — areas in which the court has been hesitant to adjudicate directly.

However, PMAC proceedings do not automatically stay UPC litigation. Given the speed of UPC infringement actions and the availability of injunctive relief, mediation is unlikely to replace litigation as the primary source of leverage in SEP disputes.

Its principal strategic value may lie in demonstrating constructive licensing conduct. As the UPC increasingly focuses on the parties’ behavior throughout negotiations, participation in mediation or arbitration may become relevant evidence when assessing FRAND compliance and willingness.

Strategic implications for SEP holders and implementers  

Considerations for SEP holders

For SEP holders, the UPC has emerged as an exceptionally attractive enforcement venue.

The availability of rapid pan-European (and beyond) injunctions combined with a judiciary that appears increasingly skeptical of hold-out behavior creates substantial litigation leverage.

At the same time, SEP owners must carefully document negotiation history, provide sufficiently substantiated licensing offers, and maintain commercially reasonable conduct throughout negotiations. Comparable licenses and valuation evidence are likely to become increasingly important as UPC jurisprudence develops.

Considerations for implementers

For implementers, recent UPC decisions significantly increase the risks associated with passive or tactical negotiation behavior.

The court’s case law strongly suggests that implementers must engage actively and promptly from the earliest stages of disputes. Delayed responses, ambiguous willingness statements, and failure to participate meaningfully in negotiations may substantially weaken FRAND defenses before substantive licensing issues are even considered.

Therefore, successful FRAND defenses will require a consistent and well‑documented course of conduct, including clear, prompt, and unequivocal expressions of willingness to license, commercially substantiated counter‑offers, and transparent, reasoned explanations of any objections to proposed terms. These efforts should be supported by comprehensive documentation of the negotiation process, the provision of appropriate security for both past and ongoing use, and a proper and verifiable accounting of the implementer’s use of the asserted patents.

Takeaways

Three years after its launch, the UPC has established itself as one of the most influential forums for SEP enforcement worldwide.

The current decisions indicate that the court is moving toward a stricter and increasingly German-influenced application of the Huawei v. ZTE framework. The practical focus of FRAND disputes is shifting away from abstract debates concerning royalty levels and toward the conduct of the parties during licensing negotiations.  

For implementers in particular, the ability to demonstrate clear, timely, and continuous willingness to take a license may increasingly determine the outcome of SEP litigation before the UPC. For SEP holders, the court offers a powerful enforcement mechanism supported by an emerging body of case law that places significant weight on commercially constructive conduct.

It remains to be seen how Local Divisions outside Germany will further shape and diversify the UPC’s developing FRAND framework and how the UPC Court of Appeal, sitting in multinational panels, will ultimately address these issues. The next phase of UPC SEP jurisprudence likely will show whether the court will move toward directly determining FRAND license terms and how alternative dispute-resolution mechanisms, such as the PMAC, will integrate with and influence the court’s increasingly developed FRAND framework.