Why 2024 was pivotal for SEPs in Europe and what to expect from 2025

2024 was a busy year regarding standard-essential patents (SEPs) in Europe. Not only the SEP licensors were active, but also the legislator and the European courts were productive and brought a number of noteworthy changes.

In 2024, patentees asserted patents essential to the much-discussed mobile communication standards (4G, 5G, WiFi, HEVC, etc.) and beyond that actively developed new fields of application for licensing including, e.g., the IoT and smart meter industries. Patentees have continued to choose European national courts for patent assertion and now increasingly include the UPC in their considerations. In the following, we summarize the key developments and court decisions.

First UPC decisions on SEPs and FRAND

The UPC handed down its first decisions of SEP cases in 2024, most notably the decisions 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). In these three first instance decisions, the UPC’s Court of First Instance established its approach to SEP matters and the FRAND defense in application of the CJEU ruling Huawei v. ZTE. Other early SEP cases before the UPC have been settled before a judgement was rendered.

In the Philips v. Belkin decision over a patent essential to the wireless charging standard “Qi”, the Munich Local Division granted an injunction. In this case no FRAND defense was raised because this particular wireless charging standard is one of many and thus does not lead to a market power of the patentee. Please refer to our further article on the question of service.

The UPC’s first decision on FRAND came shortly after, namely from the Mannheim Local Division in the Panasonic v. Oppo case. In this decision the Mannheim Local Division assessed the so-called “FRAND dance” test established by the Court of Justice of the European Union (CJEU) Huawei v. ZTE. For more details on this decision, please find our summary here. Particularly noteworthy here was the decision to hold the implementer’s counterclaim for FRAND license admissible, albeit unfounded in this case. With the counterclaim the implementer Oppo had asked the Court to order the SEP owner Panasonic to accept Oppo’s license offer or to submit a specific license offer or, in the alternative, to issue a declaratory ruling confirming the implementer’s right to a license. It remains to be seen whether the UPC Court of Appeal confirms this position.

In the Huawei v. Netgear decision of December 2024 concerning a patent essential to the WiFi standard, the Munich Local Division confirmed and further elaborated on the application of “FRAND dance” rules of Huawei v. ZTE. according to which the SEP owner must (1) first notify the implementer of the alleged patent infringement, that (2) secondly the implementer must declare willingness to take a license in reaction thereto and (3) thirdly the patent owner must then make a FRAND offer, which can be amended in the course of negotiations. If the implementer does not agree with this offer it must (4) make a FRAND counter-offer and, if declined, (5) provide security and render accounts. The Munich Local Division emphasized the importance of the parties’ FRAND compliant conduct throughout negotiations. Applying these principles, the Munich Local Division dismissed Netgear’s FRAND defense particularly as it held Netgear to have delayed negotiations and failed to comply with obligations of the “FRAND dance”.

The Munich Local Division thus granted an injunction against Netgear. Beyond the topic of the FRAND defense, a number of aspects are noteworthy:

• The Munich Local Division held that Huawei’s rights under the patent were exhausted under a license agreement between Huawei and Qualcomm for some attacked products equipped with Qualcomm modems. This is in line with the previous CQI-Report II decision of the German Federal Court of Justice on exhaustion (BGH, docket no. X ZR 123/20).
• The Munich Local Division followed the above-mentioned earlier decision of the Mannheim Local Division on several points, and in particular expressed disagreement with some of the positions taken by the European Commission in its amicus curiae brief filed in a proceeding before the Munich Appeals Court (see our detailed article).
• The Munich Local Division ruled that in the given case the withdrawal of the “opt-out” from the UPC system had been validly declared because the use of a particular template therefor had not been mandatory.

Overall, the UPC has established an SEP and FRAND practice in application of the CJEU ruling Huawei v. ZTE that emphasizes the parties’ conduct in negotiation. On this basis the UPC will likely attract further actions by SEP holders.

German court decisions in SEP cases

German courts, especially the Munich District Court, have remained a key venue of SEP litigation, in larger disputes often alongside other venues such as the UPC. While the Munich District Court has repeatedly applied its patentee-friendly approach to FRAND, the Munich Appeals Court issued a much-discussed order in the case VoiceAge EVS v. HMD in October 2024 (for details see our article). The Munich Appeals Court does have concerns about the District Court’s very strict approach to the question of FRAND willingness but emphasizes the implementer’s obligation to provide “adequate” security based on the patentee’s last offer.

SEP litigation in the UK

The UK remains an important jurisdiction for SEP litigation, with several notable decisions in 2024. Namely the decision Panasonic v. Xiaomi (particularly on the topic of interim license prior to FRAND determination) and the decision Interdigital v. Lenovo (particularly on methodology of FRAND rate calculation) have underscored the strategic importance of jurisdictional choices in SEP disputes.

European Union and political developments

The European Commission continued its efforts to shape the approach to SEP licensing and FRAND in Europe. In February 2024, the European Parliament adopted a draft regulation on SEPs, on which the European Council must now decide (more details in our article and further article). After this draft has been met with fierce criticism by SEP holders, it is currently unclear when and how the European Council will decide.

The European Commission again demonstrated its agenda to shape the topic of SEPs in Europe with its amicus curiae brief in the litigation between VoiceAge EVS v. HMD currently pending before the Munich Appeals Court (see above).

Outlook for 2025

The many 2024 events in the SEP arena set the stage for further developments in 2025. While the UPC’s first instance position on SEP and FRAND topics has become clear, the UPC Court of Appeal may intervene in 2025. Furthermore, particularly German jurisprudence may further develop in 2025. And the proposed SEP EU regulation could rewrite the rules (without moving the system’s pillars) in 2025. All in all, stakeholders are advised to closely monitor these evolving dynamics to navigate the shifting SEP landscape in 2025.