FRAND rate setting at the UPC: an emerging route for SEP owners?

There is an unresolved question at the Unified Patent Court: can it, and will it, determine a FRAND rate for a SEP portfolio, particularly at the request of a patentee? The UPC’s approach to date has predominantly followed the familiar German model. Under that approach, FRAND is primarily assessed as a defence to injunctive relief, with injunctions being awarded without an actual rate being determined. However, recent patentee-led actions, together with indications from several judges, suggest that the UPC may be moving towards a more active rate-setting role.

The issue matters strategically. A UPC action can produce remedies across multiple participating Member States, on a fast and front-loaded timetable. If the UPC is prepared not only to assess FRAND under Huawei v ZTE, but also to determine a specific rate and conditions for a FRAND license agreement between the parties, SEP owners may acquire a powerful European alternative to FRAND rate setting proceedings in the UK and China, and to national infringement actions which result solely in an injunction.

In one of the UPC’s early FRAND decisions, the Mannheim Local Division refused to determine a FRAND license agreement, at the request of Oppo (by way of counterclaim) in its dispute with Panasonic; however, this was mainly due to how the respective requests were worded. Since then, two further cases at the UPC have indicated a different approach.

Sun Patent Trust v Vivo: keeping the door open

Sun Patent Trust’s (“SPT’s“) UPC proceedings against Vivo are the clearest example so far of a patentee attempting to frame a UPC infringement action so that the court can also address FRAND licence terms. SPT brought two infringement actions in the Paris Local Division concerning 4G SEPs. Alongside declarations of infringement, SPT asked the court to find that its proposed licence terms were FRAND, or alternatively to adjust them so that they fell within the FRAND range. Injunctive and corrective relief was sought conditionally: if infringement was established and Vivo did not enter into a licence on FRAND terms within the period set by the court, then the injunction would follow.

Vivo challenged this by preliminary objection, arguing that a request for determination of FRAND terms from the SEP owner alongside an infringement claim (i.e., not a counterclaim) was outside the UPC’s competence under Article 32 (1) (a) UPCA, which explicitly establishes jurisdiction for “counterclaims concerning licences”. Vivo also challenged the Paris Local Division’s territorial competence. The Paris Local Division did not determine the admissibility of the FRAND request at the preliminary stage. Instead, it treated the infringement action as the core of the dispute and the FRAND determination as a likely incidental issue of the conditional injunctive relief sought by SPT. The Court of Appeal upheld that procedural approach in March 2026, confirming that the Court of First Instance had discretion to defer the admissibility issue to the main proceedings.

That decision is deliberately limited. It does not hold that the UPC has jurisdiction to conduct a freestanding FRAND rate-setting exercise. Nor does it determine how far the court could or should go in adjusting licence terms. Nevertheless, it is significant because the request was not initially struck out, and the fact it was allowed to proceed to the full hearing has been seen by some as an indication that the court would go on to determine FRAND terms. The strength of this presumption was somewhat lessened by the fact that the court then scheduled only a little over half a day to deal with the FRAND issues, and as the case subsequently settled, the issue remains unresolved. However, the structure of SPT’s claim may become a template for SEP owners seeking a UPC FRAND determination: bring an infringement action, anticipate the FRAND defence, and ask the court to approve or adjust licence terms as a necessary step in deciding whether injunctive relief should be granted.

Ericsson v Transsion: a further patentee-led rate-setting action

Ericsson’s litigation against Transsion took a very similar approach. Ericsson commenced actions against Transsion in several jurisdictions, including the UPC, Brazil, India and Nigeria. Within the UPC, proceedings were brought before The Hague Local Division, Mannheim Local Division and the Paris seat of the Central Division. In The Hague proceedings, Ericsson sought not merely infringement remedies but a FRAND declaration in respect of its proposed terms, with Ericsson’s Chief Patent Enforcement Officer IPR & Licensing, Robert Earle, confirming that “Ericsson has filed cases before the UPC in which we ask the court to confirm that our cross licence offer is FRAND-compliant. If the court finds our cross licence offer is not FRAND-compliant, then to determine how the terms of our cross licence offer should be adjusted to be FRAND-compliant. Once the court determines that a FRAND-compliant cross licence offer has been made to and rejected by Transsion, granting of the requested injunctions is appropriate for the infringement of valid standard essential patents.”

The Ericsson v Transsion dispute then settled in July 2026, but again this demonstrates that SEP owners are beginning to look to the UPC for not just enforcement but rate setting.

Judicial commentary

Several judges have demonstrated an openness to UPC rate setting, with both Judge Brinkman and Judge Kalden having expressed the view that the UPC has jurisdiction to set a FRAND rate. In particular, Judge Kalden stated that she sees two ways to obtain a FRAND determination from the UPC: a SEP holder may request for an injunction conditional on the defendant (implementer) not accepting a court determined FRAND rate (FRAND injunction); and an implementer may start a declaratory non-infringement action arguing that it does not infringe, because it will pay the FRAND rate that will be set by the court (although presumably this could also be raised by a defendant by way of a counterclaim).  

Perhaps the most concrete judicial indication of how UPC rate setting might work came from Judge Tochtermann in the Mannheim Local Division. During a hearing in the ZTE v Samsung dispute, the Judge (who was part of the judicial panel which had refused Oppo’s request in the Panasonic litigation) took the opportunity to outline how a UPC FRAND rate setting process could be conducted before the UPC.

Judge Tochtermann envisaged a dedicated hearing of around three to four days to set a FRAND rate. On the first day, the court would identify open questions and points requiring clarification. The parties would then present their offers, calculations and supporting methodologies. Economic experts and in-house representatives with decision-making authority would be expected to attend. Over the following days, the court and the parties would work through specific scenarios, with the objective of narrowing the issues and identifying a FRAND corridor within which the court could set the rate.

This envisaged process is court-led, inquisitorial and compressed. It reflects the UPC’s procedural approach: active case management, written front-loading, limited oral hearings and a strong focus on efficiency. It also resembles a structured mediation or settlement exercise, although with the important difference that the court may ultimately determine the rate or rate range if necessary.

Where is the UPC heading?

Patentee-led FRAND relief at the UPC is no longer purely theoretical. Parties are actively pursuing this strategy, and whilst the UPC has not yet answered the central jurisdictional question, it seems that at least some UPC judges are open to the possibility. If the UPC does engage in rate setting, it is likely to do so in its own procedural style: shorter and more interventionist, with emphasis on the written case, albeit with possibly more oral evidence than a conventional patent trial.

However, the fact that the Mannheim Local Division already had the opportunity to conduct a FRAND determination but refused to do so shows that following the correct procedural strategy, in particular with respect to how the requests for a FRAND determination are framed, is of crucial importance. There are different reasons why a FRAND determination might not ultimately be conducted. Aside from the admissibility question (depending on the procedural approach), the proceedings between Panasonic and Oppo show that requests can also be rejected for, inter alia, being lacking in specificity or not aimed at resolving the issue by, for example, excluding China from the FRAND determination. It will therefore be essential to provide the court with a sufficient basis to make the FRAND determination, for example, by submitting a comprehensive offer the claimant believes is FRAND, and by filing requests that are actually aimed at resolving the dispute by way of a FRAND license.

Whilst the UPC has not yet become a fully-fledged FRAND rate-setting forum, the direction of travel is clear enough to matter.

What could UPC rate setting mean for your SEP strategy?

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