The year 2024 marked a significant turning point for standard-essential patents (SEPs) in Europe. From groundbreaking court rulings to legislative advancements, the SEP landscape underwent transformative changes, shaping the future of patent litigation and licensing across the continent.
Patent holders expanded their focus beyond conventional mobile interaction standards like 4G, 5G, and WiFi, venturing into emerging sectors such as the Internet of Things (IoT) and smart metering. European national courts remained a preferred venue for patent disputes, but the Unified Patent Court (UPC) emerged as a pivotal player, attracting attention from SEP holders and implementers alike.
Landmark UPC Decisions on SEPs and FRAND
In 2024, the UPC delivered its first rulings on SEP cases, setting a precedent for future disputes. Key decisions included Philips v. Belkin (UPC_CFI_390/2023, LD Munich, September 13, 2024), Panasonic v. Oppo (CFI_210/2023, LD Mannheim, November 22, 2024), and Huawei v. Netgear (UPC_CFI_9/2023, LD Munich, December 18, 2024). These cases solidified the UPC’s approach to SEP matters, especially in applying the CJEU’s Huawei v. ZTE framework for FRAND (Fair, Reasonable, and Non-Discriminatory) licensing.
The Mannheim Local Division’s ruling in Panasonic v. Oppo was particularly noteworthy. The court upheld the implementer’s counterclaim for a FRAND license, even though it was ultimately dismissed. Oppo had sought a court order requiring Panasonic to accept its license offer or provide a specific proposal. This decision highlighted the UPC’s willingness to entertain FRAND-related counterclaims, a development that could influence future SEP negotiations.
In Huawei v. Netgear, the Munich Local Division reinforced the principles of the “FRAND dance,” emphasizing the obligations of both SEP holders and implementers during licensing negotiations. The court ruled that Netgear had failed to comply with these obligations, leading to the dismissal of its FRAND defense and the issuance of an injunction. This case underscored the importance of timely and obvious negotiations in SEP disputes.
- The court also addressed patent exhaustion, ruling that Huawei’s rights were exhausted for products equipped with Qualcomm modems due to an existing licensing agreement.This aligned with the German Federal court of Justice’s earlier CQI-Report II decision (BGH, docket no. X ZR 123/20).
- Additionally, the Munich Local Division diverged from certain positions taken by the European Commission in its amicus curiae brief, signaling a nuanced approach to SEP jurisprudence.
- The court further clarified procedural matters, such as the validity of withdrawing an “opt-out” from the UPC system, emphasizing versatility in compliance requirements.
These rulings collectively established the UPC as a key forum for SEP disputes, with a strong emphasis on FRAND compliance and negotiation conduct. This development is likely to encourage more SEP holders to pursue litigation within the UPC framework.
SEP Litigation in the UK
The United Kingdom continued to play a central role in SEP litigation, with several high-profile cases in 2024. Decisions such as Panasonic v. Xiaomi and Interdigital v. Lenovo highlighted the strategic importance of jurisdiction in SEP disputes. These cases addressed critical issues, including interim licensing arrangements and methodologies for calculating FRAND rates, further shaping the global SEP landscape.
european Union and Political Developments
The European commission remained actively involved in shaping SEP policy, as evidenced by its amicus curiae brief in the VoiceAge EVS v. HMD case. This intervention underscored the Commission’s commitment to influencing SEP-related jurisprudence and regulatory frameworks across Europe.
Looking Ahead to 2025
The developments of 2024 have set the stage for an eventful 2025 in the SEP arena.The UPC Court of Appeal is expected to weigh in on key SEP and FRAND issues, potentially refining or challenging the first-instance rulings. Meanwhile, German courts are likely to continue evolving their jurisprudence, and the proposed EU SEP regulation could introduce further changes to the system.
For stakeholders navigating the SEP landscape,staying informed about these dynamic developments will be crucial. The interplay between legal rulings, regulatory changes, and market trends will shape the future of SEP licensing and litigation in Europe and beyond.
What is the significance of the UPC’s rulings in 2024, such as *Philips v. Belkin*, *Panasonic v. Oppo,* and *Huawei v. Netgear*, in shaping the future of SEP disputes?
Interview with Dr.Elena Müller, SEP and FRAND Licensing Expert
By Archyde News
archyde: Dr. Müller, thank you for joining us today. The year 2024 has been a landmark year for Standard-Essential Patents (SEPs) in Europe. From your outlook, what made this year so transformative?
Dr. Müller: Thank you for having me. Indeed, 2024 was a pivotal year for SEPs. We saw the Unified Patent Court (UPC) deliver its first rulings on SEP cases, wich set critically important precedents for how FRAND (Fair, Reasonable, and Non-Discriminatory) licensing disputes will be handled in the future. Additionally, patent holders expanded their focus beyond traditional mobile standards like 4G and 5G into emerging sectors such as the Internet of Things (IoT) and smart metering. This shift reflects the growing importance of SEPs in shaping innovation across industries.
Archyde: Let’s dive into the UPC’s role. The court’s decisions in cases like Philips v.Belkin, Panasonic v.Oppo, and Huawei v. Netgear have been widely discussed. What do these rulings tell us about the UPC’s approach to SEP disputes?
Dr. Müller: The UPC’s rulings in 2024 were groundbreaking. In Philips v. Belkin, the court reinforced the importance of the Huawei v. ZTE framework, which outlines the steps parties must take to negotiate FRAND licenses in good faith.This case clarified that both SEP holders and implementers have obligations to act fairly during licensing negotiations.
The Panasonic v. Oppo case was particularly captivating. The Mannheim Local Division upheld Oppo’s counterclaim for a FRAND license, even though it was ultimately dismissed. This decision signaled the UPC’s willingness to entertain FRAND-related counterclaims, which could encourage more implementers to seek court intervention in licensing disputes.
in Huawei v.netgear, the Munich Local Division emphasized the importance of the “FRAND dance,” the back-and-forth negotiation process between parties. The court made it clear that both sides must engage in good faith, and failure to do so could result in unfavorable outcomes.
Archyde: How do these rulings impact the broader SEP landscape, especially for industries like IoT and smart metering?
Dr. Müller: These rulings provide much-needed clarity for industries that rely heavily on SEPs. As IoT and smart metering technologies become more prevalent, the number of SEP-related disputes is highly likely to increase. The UPC’s decisions set a framework for resolving these disputes efficiently and fairly.
For example, the emphasis on good faith negotiations in Huawei v. Netgear is particularly relevant for IoT companies, where multiple stakeholders often need to license SEPs. The UPC’s approach ensures that SEP holders cannot abuse their dominant position, while implementers must also act responsibly during negotiations.
Archyde: looking ahead, what challenges do you foresee in the SEP landscape, and how might the UPC address them?
Dr. Müller: One of the biggest challenges is the increasing complexity of SEP licensing,especially as technologies like IoT and AI continue to evolve. Determining what constitutes a FRAND license in these emerging sectors can be challenging, as there are often no established benchmarks.
the UPC will need to continue refining its approach to these cases, balancing the interests of SEP holders and implementers. Additionally, we may see more legislative developments at the EU level to address issues like transparency in SEP licensing and the role of patent pools.
Archyde: what advice would you give to companies navigating the SEP landscape in 2025 and beyond?
Dr. Müller: My advice would be to stay informed about the latest legal developments and to engage in proactive, good-faith negotiations. Companies should also consider the UPC as a viable venue for resolving disputes, given its growing expertise in SEP matters.
For SEP holders, it’s crucial to ensure that licensing offers are truly FRAND-compliant. For implementers, it’s important to respond to licensing offers promptly and constructively. Ultimately, collaboration and transparency will be key to navigating the SEP landscape successfully.
Archyde: Thank you, Dr. Müller, for your insights. It’s clear that 2024 was a transformative year for SEPs, and your expertise has shed light on what lies ahead.
Dr. Müller: Thank you. It’s been a pleasure discussing these important developments with you.
End of Interview
