Top German Court Doubles Down on SEP Approach Favoring Patent Owners
The first few weeks of 2026 were a busy time for the standard essential patent (SEP) space in Germany. On January 27, the country’s Federal Court of Justice reaffirmed its prior patent owner-friendly approach to fair, reasonable, and nondiscriminatory (FRAND) licensing disputes, under which implementers have rarely been able to avoid injunctions in SEP cases, and declined to refer the matter for review by the EU’s highest court. Meanwhile, the Munich I Regional Court, one of Germany’s busiest first-instance courts for patent litigation, issued a pair of decisions that give updated guidance on FRAND matters earlier in January. All three decisions upheld injunctions in notable SEP disputes.
The Federal Court of Justice’s decision came in the closely watched appeal of a SEP judgment for VoiceAge EVS GmbH & Co. KG, a Fortress Investment Group LLC plaintiff, against HMD. That same court established the SEP approach here at issue in its two landmark decisions in Sisvel v. Haier (Sisvel I, 2020; and Sisvel II, 2021; collectively, “Sisvel”). Those decisions set forth the court’s views on the proper application of Huawei v. ZTE, a 2015 decision by the Court of Justice of the European Union (CJEU) that lays out a series of steps parties must adhere to during FRAND negotiations to be found compliant with their respective obligations.
Sisvel established that a SEP owner does not abuse its dominant position under antitrust law by enforcing its patents against an unwilling licensee. It also provides that parties can later remedy non-compliance with the negotiation steps laid out by Huawei, essentially allowing their application out of order (thus, for instance, allowing a patent owner to make an initial offer that is not FRAND but then later submit a FRAND-compliant offer). Sisvel additionally imposes stringent requirements on implementers hoping to make a showing of willingness, mandating that they “clearly and unambiguously” demonstrate their willingness consistently and continuously throughout negotiations. Only if the implementer makes that showing do the SEP owner’s duties come into play. The result, according to JUVE Patent, is that the implementer is “almost always considered unwilling”, especially in the Munich I Regional Court (from which this appeal originated).
The European Commission pushed back against this approach in April 2024, taking the rare step of filing an amicus brief in that appeal in which it argued that the less rigid application of Huawei followed by German courts since Sisvel does not comply with EU law. In particular, the Commission’s brief argued that allowing parties to satisfy the steps out of order would undermine the balance of interests established by Huawei by incentivizing patent owners to immediately seek injunctions and implementers to allege abuse of dominance without negotiating. As such, the Commission asserted that the steps must be followed in strict sequence.
– Munich Higher Regional Court Elevates Importance of Securities
In late October 2024, the Munich Higher Regional Court reportedly acknowledged certain fundamental problems with post-Sisvel caselaw at a hearing in this appeal. To that end, on the eve of the hearing, the court took the unexpected step of issuing a preliminary opinion that affirmed the lower court’s injunction—and in the process detailed a revised FRAND approach. The court then further explained its rationale in a March 2025 judgment. Both are cited and quoted below based on unofficial translations.
Of particular relevance here is that the court held, consistent with Sisvel, that while parties should adhere to the Huawei steps in principle, “strict compliance with these steps should not be an end in itself”. Rather, it held that a court must examine the “meaning and purpose of each of the steps”, as well as whether parties can, in good faith, leverage “purely ‘formal’ errors” made during an “earlier stage of the negotiations at a later point in the court proceedings”.
To that end, the court held that for the first step of Huawei, where a patent owner must provide notice of infringement, an implementer cannot later challenge the sufficiency of that notice if it still entered into negotiations with the patent owner. Similarly, the court held for step two—under which an implementer must respond to the patent owner’s notice of infringement with a declaration of willingness to take a FRAND license—that if an implementer fails to respond within reasonable time or in reasonable manner, but then the patent owner makes an offer, the patent owner can no longer argue in good faith that the FRAND defense does not apply due to lack of willingness on the part of the implementer.
As to the third step of Huawei, which contemplates the patent owner’s first offer, the court’s preliminary opinion cited Sisvel as providing that this offer does not have to be FRAND or evaluated by the court for FRANDness—rejecting the Commission’s contrary position (as paraphrased by the court) that the FRAND defense should always succeed if that offer is non-FRAND. Rather, the court underscored that a non-FRAND first offer is not an abuse of dominance because it “is only the starting point of the negotiations” during which a FRAND offer “is to be developed”. In its March 2025 opinion, the court clarified (among various points) that a patent owner must not deliberately make an initial offer that is excessive and non-FRAND, but that even if it does, this does not mean that the FRAND defense prevails.
With respect to Huawei step four, concerning the implementer’s counteroffer, both the provisional and final judgment reiterate Sisvel II’s holding that for an obviously non-FRAND offer it may be sufficient for the implementer to not submit a counteroffer but instead to merely explain why the offer was non-FRAND. Yet the final judgment further clarified that where the implementer submits a counteroffer, it is not necessary to examine whether that counteroffer is non-FRAND. The court explained that the Huawei requirement that this offer comply with FRAND conditions merely obligates the implementer to “participate constructively in the negotiations” and submit an offer that is subjectively FRAND-compliant from its point of view, and that it not “abuse the counter-offer step for mere tactics or delays”.
Most significant was the Higher Regional Court’s approach to Huawei step five, under which the implementer must provide an “appropriate security, in accordance with recognised commercial practices in the field”. Here, it held that the implementer cannot be found to be a willing licensee without providing an appropriate security, but conversely that if it does provide such a security after having submitted a counteroffer, it will both be deemed willing and (as further stated in its provisional opinion) will have “cured” any delay. The court held that the amount of such a security should be based on patent owner’s last offer, not on any counteroffer by the defendant. If that last offer was for a worldwide license, the court further held that the security must cover the rate for that worldwide license and not be scaled down just to cover German patents.
Additionally, the Higher Regional Court held that the implementer must give a binding declaration that if the offer is proved to be FRAND-compliant and infringement is affirmed, the patent owner will receive the security. Here, the court acknowledged that this is not explicitly mandated by Huawei but determined that it can be inferred from the requirement of an “appropriate security”, since it would defeat the purpose of a security if the implementer could “change its mind” and later waive its FRAND defense, accept an injunction, and get the security back, thus enabling “pure delaying tactics”.
The court additionally rejected concerns expressed by the defendant at the hearing that this approach to the required security would incentivize patent owners to make excessive demands in order to make the security so expensive that defendants could not pursue FRAND defenses. The court countered that the patent owner’s interest is in the execution of a license agreement rather than in enforcing a permanent injunction, and the patent owner is thus not likely to make an offer so high that the implementer could neither provide a security nor accept the offer unconditionally. Moreover, the court found that a patent owner would not want to run the risk that a defendant could still afford that high security, since this could lead to a successful FRAND defense and thus the defeat of the patent owner’s injunction request.
However, the court did not address the plaintiff’s concerns that this system could provide the opposite incentive to the one flagged by HMD—to encourage implementers to decline an otherwise FRAND offer and pay a deposit to delay a dispute’s resolution.
Based on those criteria, the court held that defendant HMD had failed to provide an adequate security—in part because it had based the amount on its last counteroffer, rather than on the patent owner’s last offer, finding the security “more insufficient” because the patent owner’s “last offer exceeds the counteroffer and the security provided many times over”. Additionally, the court noted that HMD had not made a binding commitment to provide that security if the plaintiff’s offer were found to be FRAND. Thus, the court concluded that HMD had not fulfilled step five of Huawei and that its FRAND defense failed as a result.
– Federal Court of Justice Confirms that Huawei Steps May Be Followed Out of Sequence
On January 27, the Federal Court of Justice announced that it had issued a judgment on appeal in VoiceAge EVS v. HMD. While the full opinion has not yet been released publicly, the court’s press release provides an overview of its conclusions. Per that release (discussed and quoted here via a machine translation), the court has reaffirmed its holding that under Huawei and Sisvel, a SEP owner does not abuse its dominant position by enforcing its patents in court against an unwilling licensee.
Additionally, the court found that the “defendant’s conduct here shows a lack of willingness to license”. On this point, the court cited the timing of HMD’s responses during the negotiations—observing that it had responded to the patent owner’s first offer nearly six months later, and to a confidentiality agreement (required for the plaintiff to disclose licenses with other companies, and provided alongside the offer) three months after that. The court also observed that HMD responded to a subsequent offer more than three months later, characterizing the negotiations as having “dragged on for several years”. Furthermore, the court pointed to the security provided by the defendant as being “significantly below that [last offer] resulting from the license agreement offers it had made itself”.
Notably, as mentioned above, the court also stated that there was “no need to make a referral to the [CJEU]”, contrary to what some had expected. Here, the court explained that referral is not required where the question at issue “is not material to the decision, if the provision of EU law has already been the subject of an interpretation by the Court of Justice, or if the correct interpretation of EU law is so obvious that there is no room for any reasonable doubt”. The court further stated that under Huawei, a national court must duly consider the “specific legal and factual circumstances of each case”, applying its own national procedural law.
As a result, the court concluded that “it must be assumed without reasonable doubt that EU law (Article 102 TFEU) does not prescribe a fixed sequence of procedural steps that must be strictly observed in any case”, thus affirming another one of Sisvel’s key holdings. The court declined to reach “[t]he question of whether the amount of a security to be provided by the defendant must be based on the patent proprietor's license agreement offer”, stating that this was “not relevant here, because the security provided was significantly lower than the defendant’s own offer”.
– Munich I Regional Court Clarifies FRAND Rules
Meanwhile, in two recent decisions, the Munich I Regional Court further clarified its own approach to FRAND litigation, in some instances underscoring how its approach differs from the Munich Higher Regional Court (the appellate court that reviews its decisions).
One of those decisions came on January 8, when the court’s Seventh Civil Chamber reportedly granted a permanent injunction for Korean plaintiff Wilus Institute of Standards & Technology, Inc., a Sisvel International S.A. licensor, against Wi-Fi 6 products sold by defendant ASUS. The full decision has not been published, but it has been reviewed by media outlets including JUVE Patent and IP Fray, both of which have published translated versions of the headnotes/key points from those decisions (see here and here). The JUVE Patent translation is quoted below.
The headnotes detail four overarching concepts, beginning with a “partial payment obligation”. Here, the court provides that in its assessment of willingness, “it is considered particularly significant whether the licence applicant makes a partial payment”. This obligation applies when the parties agree that a license payment is required but only dispute the amount; in that situation, the defendant must provide the undisputed amount as a payment that remains permanently with the patent owner, as a “down payment on the subsequent licence fee”.
Moreover, the court states that in some instances there may be a need to provide an additional security (in contrast to the Higher Regional Court’s treatment of a security as a requirement to establish willingness). Significantly, the court further provides that where a party has sought a rate determination in another jurisdiction, it “must provide the amount set by the court in addition to the partial payment as security, regardless of whether the defendant in the other jurisdiction has agreed to the proposal of the court there or not”. Subsequent developments in another case, discussed further below, clarify that the “amount set by the court” may include the interim FRAND license fees that UK courts have increasingly ordered since early 2025.
Second, the court underscores the value of comparable licenses, stating that agreements “concluded recently with other licensees of approximately the same size and with a comparable product portfolio” serve as a “very strong indication” that the specified rate is within the FRAND range. However, the court also remarks that many companies are not willing to enter license agreements “without the corresponding pressure from infringement proceedings”, and states that filing such proceedings is thus a “normal and acceptable part” of licensing negotiations. As a result, it cautions that the “fact that infringement proceedings took place prior to the conclusion of the agreement should not be overestimated”. The court further states that plaintiffs may choose whether to use comparable licenses to support their claims, and that if so they may decide which licenses to use—additionally providing that they are not obligated to submit every comparable license “concluded by the plaintiff regarding the subject matter of the licence”.
Third, the court addresses “compensation for past release”, which here concerns whether and to what extent a patent owner asserts license claims covering past infringing use. The impact of prior discounts or waivers for past sales has been a point of contention in FRAND litigation, with some implementers arguing that this allows SEP owners to inflate rates covering future sales in order to establish higher comparables. UK courts have attempted to account for this by adjusting rates derived from comparables to account for such discounts (see, e.g., the Court of Appeal’s July 2024 decision in InterDigital v. Lenovo). Here, though, the Munich court rejects that approach and framing of the issue:
It is a permissible business decision for any patent holder whether to assert claims for past payments. This decision must be accepted unless there are exceptional indications of abuse. There is no reason to suspect that waiving claims arising from past use is solely intended to set an inflated future rate in order to create comparative license agreements with high royalties.
Fourth, the court contemplates the use of a “top-down” approach for royalty calculation, where the relative value of a specific SEP portfolio is apportioned based on the aggregate royalty that would be paid for all SEPs covering the applicable standard. The court states that a top-down approach may be used as a “control calculation”—i.e., as a cross-check for a rate derived from comparable licenses—“at least when the patent holder has a substantial share in the standard”, suggesting a 1% share as sufficient in the mobile communications space.
IP Fray additionally reports that the full decision also refers to patent pools, characterizing the court as holding that “pools ‘practically never exhaust’ the full price potential of the assets they license”—meaning that “if a licensing offer can be justified based on a pool rate, an implementer will have a hard time convincing the court that the royalty demand is supra-FRAND”.
The other decision from the Munich I Regional Court mentioned above, also from the Seventh Civil Chamber, came on January 22—granting an injunction for Nokia in video codec litigation against Acer and ASUS (the third defendant, Hisense, having recently settled). While that decision has not yet been published, JUVE Patent, reporting on the hearing at which the injunction was issued, indicates that the court applied the concept of the “partial payment obligation” set forth in the Wilus decision. Presiding Judge Oliver Schön reportedly discussed how, while the implementer must pay the amount of its FRAND offer, this amount is typically low—and how an UK interim license ruling, if available, could help determine the amount to be paid.
That was indeed the case here, as the broader dispute between Nokia on the one hand and Acer, ASUS, and Hisense has also involved a UK rate-setting action filed by those implementers against the patent owner. On December 18, 2025, the UK High Court ruled that Nokia must offer an interim FRAND license, in the process addressing certain issues for the first time—including whether a SEP owner can defeat a UK court’s jurisdiction by offering to resolve the licensing dispute via arbitration.
For details on that decision, see “UK High Court Orders Interim License in Video Codec SEP Dispute” (December 2025). Additional coverage of the broader jurisdictional battle triggered by the UK’s interim license jurisprudence can also be found at “German Court and UPC Issue First-Ever Anti-Interim-License Injunctions in SEP Dispute” (October 2025) and “UK High Court Bars InterDigital from Blocking Final FRAND Ruling in Amazon Case (October 2025).
