When negotiations stall: English Courts step into global SEP licensing disputes

A recent decision of the Patents Court in Acer Inc & Ors v Nokia Technologies Oy reinforces a developing trend: English courts are increasingly willing to take an active role in shaping the commercial framework of standard essential patent (SEP) licensing disputes.

For technology businesses, this has practical implications for licensing negotiations, dispute strategy, and forum selection.

We consider the key elements of the decision and the implications for businesses below.

When negotiation breaks down

SEP holders occupy a unique commercial position. Where patented technology is essential to an industry standard, implementers (manufacturers of compliant products) have no realistic alternative but to use it. In return, patent owners commit to licensing on fair, reasonable, and non-discriminatory (FRAND) terms.

The difficulty is that “reasonable” is not defined by standards bodies and there is no universally accepted pricing methodology. FRAND therefore operates as a legal and commercial concept shaped through negotiation and, increasingly, judicial scrutiny. When negotiations stall, the leverage shifts from the negotiating table to the dispute forum.

That is the context in which Acer, ASUS and Hisense turned to the English courts. Despite prolonged negotiations with Nokia (SEP Holder), agreement on global portfolio terms could not be reached. Nokia argued that arbitration was the appropriate mechanism and that a national court should not determine the terms of a global license.

The Court was not resolving the final FRAND rate at this stage. Instead, it addressed whether it had jurisdiction to determine FRAND terms and, importantly, whether it could impose interim license terms pending final resolution.

Jurisdiction – FRAND disputes within the Court’s remit

Ultimately, the Court rejected the suggestion that its role should be confined or displaced. Echoing earlier decisions including Amazon v InterDigital, the Court confirmed that it may determine FRAND terms even where the licence in question has global scope.

Although patents remain territorial rights, the dispute concerns the contractual framework arising from FRAND commitments given to standard bodies and under which a multinational portfolio is licensed. The Court treated those commitments as enforceable obligations capable of judicial determination. In absence of a binding arbitration agreement, the mere proposal of arbitration was insufficient to displace the Court’s jurisdiction.

The direction of travel is clear, English courts are positioning themselves as being capable of resolving the commercial architecture of multinational SEP licensing terms, not just adjudicating infringement of individual national patents.

Interim licence terms - A shift in dynamics

The most commercially significant aspect of the decision is the Court’s willingness to declare that interim license terms should apply pending final determination of FRAND.

SEP disputes can take years to reach a final decision. During that time, uncertainty over whether products can be sold and on what financial basis creates material business risk. By imposing interim terms, the Court introduced a structured framework under which products can continue to be marketed while pricing disputes are resolved.

This alters negotiation dynamics in several ways, such as reducing the effectiveness of delay as a tactical tool, mitigating the risk of hold-up or hold-out pressure, and introducing judicial oversight into what has traditionally been a purely commercial negotiation space.

Litigation in this context is not only a mechanism for final enforcement, but also a tool for stabilising commercial relationships at the point of impasse.

Why does this matter?

For businesses managing global technology portfolios, the implications are practical.

Forum strategy is now central. England is emerging as a jurisdiction prepared to determine FRAND terms and manage interim arrangements, which is attractive to those seeking clarity and structured outcomes over fragmented cross-border disputes.

Dispute resolution clauses require precision. Parties intending to rely on arbitration must ensure that agreements are clear, binding and enforceable. A general willingness to arbitrate may not prevent court proceedings.

Negotiation conduct may be tested. Courts are increasingly prepared to examine whether parties have acted reasonably in the context of FRAND commitments, meaning commercial positions may be later scrutinised in litigation.

Litigation may arise earlier. The availability of interim declarations means court involvement may arise sooner than previously expected, affecting risk allocation and bargaining power.

This decision sits within a wider pattern of English courts taking a more proactive approach in SEP and FRAND disputes. Where negotiations falter, the judiciary is demonstrating a willingness to step in and shape the commercial relationship under which licensing continues. For global tech businesses, this development highlights the growing alignment between licensing strategy, dispute management, and jurisdictional considerations.

For further information on the issues raised in this article, please contact Iain Rutherford, Clare Matheson, or our IP Technology and Data Team.