Standard-essential patent (“SEP”) disputes expose a fundamental mismatch between territorial patent rights and global technology markets. Although patents are granted and enforced nationally, the standards they protect, and the products that implement those standards, operate across borders. A single licensing disagreement may therefore trigger parallel infringement, validity and fair, reasonable and non-discriminatory (“FRAND”) rate-setting proceedings in several jurisdictions, together with anti-suit and anti-anti-suit injunctions designed to control where the dispute will be heard.
FRAND arbitration offers a potentially more coherent alternative. It allows parties to place an international SEP portfolio before a single specialist tribunal, select decision-makers with relevant legal, technical and economic expertise, and protect commercially sensitive licensing evidence from public disclosure. It may also enable a tribunal to determine global licence terms without requiring each national patent to be litigated separately.
Yet arbitration is not a complete solution. Its authority ordinarily rests on consent, its awards generally bind only the parties, and its private character sits uneasily with the non-discriminatory dimension of FRAND licensing. Questions of patent validity, competition law, transparency and enforceability may also complicate the arbitral process.
These issues have acquired new practical significance. Institutions such as the World Intellectual Property Organization and the Unified Patent Court’s Patent Mediation and Arbitration Centre are developing procedures tailored to FRAND disputes, while the Court of Appeal of England and Wales has considered whether an SEP owner may satisfy its licensing obligations by offering an immediate interim licence whose final terms are to be determined in arbitration. Against that background, this article examines why FRAND disputes arise, the advantages and limitations of arbitration, recent institutional developments and the implications of Acer v Nokia for the future of global SEP licensing.
Why FRAND Disputes Arise
Devices such as smartphones, laptops, tablets and headphones need to be able to communicate with one another, even where different companies manufacture them. This interoperability is made possible through standardised communication protocols, or “standards”, such as Wi-Fi, 5G, USB and Bluetooth.[1]
These standards almost always incorporate patented technology. Patents that are necessary to implement the mandatory parts of a standard are known as SEPs.[2]
Once a patent becomes standard-essential, any company wishing to manufacture products that comply with the relevant standard will need to use the patented technology. Because there may be no practical way to design around a SEP, its owner could theoretically demand excessive royalties from companies wishing to use it.[3] Potential licensees may have relatively little bargaining power because they cannot simply substitute another technology without losing compliance with the standard.[4]
To balance patent owners’ entitlement to receive compensation for the use of their inventions against the need for widespread access to essential technology, standard-setting organisations (“SSOs”) generally require companies whose patents are incorporated into a standard to undertake to license them on FRAND terms.[5]
FRAND does not prescribe a single royalty rate or universally accepted valuation methodology. Whether a particular offer falls within the range of FRAND terms therefore remains a frequent source of dispute.[6]
The Territorial Patent Problem
A particular difficulty arises from the mismatch between territorial patent rights and global licensing arrangements.
Patents are granted by national or regional authorities and are ordinarily enforceable only within the territory for which they were granted.[7] FRAND commitments, by contrast, relate to standards that are implemented in products manufactured and sold around the world.[8] SEP portfolios may include many patents across numerous jurisdictions, while implementers will often attempt to negotiate a single global licence in order to have freedom to operate.[9]
This tension can result in proceedings being brought in several countries at the same time. An SEP owner may seek to enforce individual national patents from its portfolio before the corresponding national courts.[10] Implementers may respond by seeking declarations of non-infringement or challenging the validity or essentiality of the patents relied upon.[11]
Courts in some jurisdictions have also held themselves capable of determining the terms of a global FRAND licence.[12] The parties may therefore find themselves engaged simultaneously in national patent litigation and competing proceedings concerning the appropriate terms of a worldwide portfolio licence.
The resulting jurisdictional conflict can lead to anti-suit injunctions intended to prevent proceedings from being commenced or continued elsewhere.[13] Those orders may in turn provoke applications for anti-anti-suit injunctions and further procedural escalation.[14]
Differences between national approaches compound the problem. Courts in different jurisdictions may have significantly different views about the methodology for calculating a FRAND royalty, the circumstances in which an injunction should be granted and the terms that may fall within the permissible range of FRAND outcomes.[15]
Arbitration may provide a means of resolving the underlying global dispute without requiring the parties to litigate every national patent separately.
Why Arbitrate a FRAND Dispute?
- One global proceeding: A tribunal may determine licensing terms for an entire international SEP portfolio, reducing parallel litigation and inconsistent outcomes.[16]
- Neutral forum: Arbitration can limit forum shopping and the procedural battles associated with competing national proceedings.[17]
- Specialist tribunal: Parties can appoint arbitrators with relevant patent, technical, economic and competition-law expertise.[18]
- Confidentiality: Sensitive royalty information and comparable licences can be protected, although confidentiality is not automatic.[19]
Difficulties and Limitations
- Consent is required: Arbitration depends on an agreement between the parties, who may be wary of arbitration for transparency or appealability reasons.[20]
- Comparable licences: Confidentiality can make it difficult to assess whether similarly situated licensees have received materially different terms. Other implementers, tribunals and courts may be unable to access comparable licences or the reasoning underlying previous awards, limiting their ability to evaluate the “non-discriminatory” element of FRAND.[21]
- Limited effect: Although a tribunal may, where permitted, determine validity issues inter partes, an award will generally not revoke a patent erga omnes or alter the official patent register.[22]
- Enforcement risks: Issues of patent validity or competition law may render FRAND awards unenforceable in some jurisdictions on public policy or arbitrability grounds, though this represents a small minority of jurisdictions.[23]
Institutional Developments
In order to address the issues that may arise when arbitrating FRAND disputes, several institutions have attempted to develop rules and clauses specifically adapted to FRAND arbitration. Two examples of this are the Patent Mediation and Arbitration Centre (“PMAC”) of the Unified Patent Court (“UPC”) and the World Intellectual Property Organization (“WIPO”) Arbitration and Mediation Center.
1. The UPC Patent Mediation and Arbitration Centre
The PMAC is a new arbitration institution that forms part of the UPC, a common patent court for participating EU Member States. The PMAC is intended to serve “as a specialized institution for resolving patent disputes through mediation, arbitration and other appropriate dispute resolution processes.”[24]
As the PMAC held its inauguration ceremony only on 2 June 2026, its practical role in SEP and FRAND dispute resolution remains to be seen. Nonetheless, its Arbitration Rules of the Patent Mediation and Arbitration Centre (“PMAC Rules”), adopted by the UPC Administrative Committee on 24 April 2026, appear to contemplate a procedure well suited to complex international patent disputes, with a section (Section 7) specifically dedicated to FRAND disputes.
The PMAC Rules foresee FRAND arbitrations including matters such as:
- Flexible case design, allowing the parties to define the patents, claims and issues to be decided;[25]
- Portfolio sampling, under which representative patents may be selected using agreed criteria;[26]
- Staged proceedings, permitting technical and economic issues to be addressed separately;[27]
- Interim licence terms, which allow the tribunal to determine selected licence terms that will temporarily apply while the final decision is pending;[28]
- Enhanced confidentiality protections, including access restrictions, confidentiality advisers and non-disclosure agreements;[29]
- Coordination with parallel proceedings, such as related patent, SEP, invalidity, competition-law or regulatory proceedings, which may be stayed or permitted to continue separately;[30]
- Potential essentiality assessment, conducted under the Centre’s separate Rules on Expert Determination;[31]
- Document production, including applications to the Tribunal or a competent court for orders relating to comparable licences and other relevant documents;[32] and
- An efficient timetable, supported by early case management, expedited proceedings and target deadlines.[33]
Article 49 of the PMAC Rules also provides for the establishment of non-binding guidelines for dealing with FRAND disputes, which will “set out best practice recommendations for Arbitrations in which FRAND Disputes arise”.[34]
The Centre’s development reflects a broader recognition that patent disputes, particularly FRAND disputes, may require procedures capable of addressing technical, economic and international issues within a single framework.
2. WIPO Arbitration and Mediation Center
The WIPO Arbitration and Mediation Center is a neutral, international dispute-resolution body forming part of the World Intellectual Property Organization. Established in 1994, it administers mediation, arbitration, expedited arbitration and expert determination proceedings, with a particular focus on intellectual property and technology disputes.[35]
The WIPO Arbitration and Mediation Center has developed a Model Submission Agreement for FRAND disputes that parties can use to refer an existing dispute to arbitration.[36]
The WIPO Model Submission Agreement goes considerably further than a conventional arbitration clause. It offers a FRAND-specific procedural framework under which the parties may define the relevant standards and patents,[37] appoint a three-member tribunal drawn, where possible, from WIPO’s specialist patent-in-standards neutrals,[38] and follow a detailed timetable for pleadings, document production, witness evidence and the hearing.[39]
One of its most notable optional features is the exclusion of the tribunal’s power to issue interim injunctions, coupled with the ability to order security into escrow.[40] This is intended to preserve the implementer’s access to the standard while providing some protection for the SEP owner pending the final award.
Model agreements of this kind can reduce the difficulty of negotiating the procedural framework after a dispute has arisen. They may address matters such as the tribunal’s mandate, the applicable law, confidentiality, document production and the relationship between the arbitration and pending court proceedings.
The availability of institutionally developed procedures does not itself produce consent. It can, however, make arbitration a more realistic and attractive option by giving the parties an established framework rather than requiring them to design the process from the beginning.
Case Study: Acer v Nokia
One example of the role that arbitration can play in a FRAND dispute can be found in the recent Court of Appeal of England and Wales case, Acer Incorporated and another v Nokia Technologies Oy; Asustek Computer Inc and another v Nokia Technologies Oy [2026] EWCA Civ 564 (“Acer v Nokia”).
The case concerned whether Nokia could comply with its “RAND” licensing obligation by offering Acer and ASUS an immediate interim licence whose final terms would be determined through arbitration (in this case, the agreement was for reasonable and non-discriminatory terms, but the court recognised that the omission of “fair” made no material difference).
Nokia owned a portfolio of SEPs relating to the H.264/AVC and H.265/HEVC video standards. Acer and ASUS accepted that they required global licences but disputed the terms and royalties sought by Nokia.[41]
Nokia offered each company an “Adjustable Licence”. This was an immediate global interim licence under which the final terms, together with any necessary payment adjustments, would be determined by an ICC arbitral tribunal applying the RAND standard.[42]
The central question was whether this constituted an offer on RAND terms even though Acer and ASUS had not previously agreed to submit the dispute to arbitration.
Was Arbitration Being Imposed?
The Court accepted that arbitration is fundamentally consensual and that the relevant ITU-T declaration did not itself require licensing disputes to be arbitrated.[43]
It nevertheless held that Nokia was not compelling Acer and ASUS to arbitrate. Nokia was offering them a choice. They could accept an immediate licence, in which case its final RAND terms would be determined through arbitration, or reject the offer and bear the consequences of refusing a RAND licence.[44]
The distinction was between being legally forced to arbitrate and being presented with a commercially significant choice. Acer and ASUS remained formally free to refuse the offer, but that refusal was not necessarily commercially neutral.[45]
In this sense, arbitration was embedded in the mechanism through which Nokia proposed to perform its RAND licensing undertaking.
More Than an Agreement to Arbitrate
The Court emphasised that Nokia’s proposal was not merely a standalone agreement to arbitrate.
The Adjustable Licence gave Acer and ASUS an immediate worldwide licence while the final terms were being determined. It therefore protected them from exclusionary relief during the interim period.[46]
The adjustable nature of the licence was also consistent with the purpose of interim licensing. Such arrangements preserve the parties’ positions pending a final determination, with payments subsequently adjusted to reflect the final RAND terms.[47]
The arbitration was therefore part of a wider licensing arrangement that provided Acer and ASUS with an immediate commercial benefit.
Was the Offer Objectively RAND?
The Court held that the arbitration mechanism did not render the offer non-RAND.
The proposed tribunal would be independent and impartial, and Nokia had agreed to accept whatever final terms the tribunal determined to be RAND. The licence offered was therefore objectively RAND.[48]
Acer and ASUS could not reject the offer merely because they preferred the English courts to determine the final terms. Where more than one set of terms may fall within the range of RAND outcomes, the SEP owner is entitled to select the RAND terms most favourable to it.[49]
The Court accordingly held that Nokia had complied with its RAND obligation by making the Adjustable Licence Offers. If Acer and ASUS refused them, they could not continue to present themselves as willing licensees seeking a RAND determination from the English courts.[50]
The Limits of the Decision
The decision is important because it confirms that, in appropriate circumstances, an SEP owner may satisfy its RAND obligation by offering an immediate adjustable licence linked to arbitration.
Commentators have recognised it as offering SEP owners a “powerful new tool”, allowing them to “effectively foreclose the implementer-led FRAND rate-setting proceedings that have become a feature of UK litigation in recent years” simply by making an arbitration-linked FRAND-compliant adjustable licence offer.[51]
The decision does not, however, establish that any arbitration-linked licensing offer will necessarily be RAND.
The Court left open the position where an implementer has a legitimate objection to the proposed arbitral process or suggests a reasonable alternative form of arbitration.[52]
The fairness of the procedure will remain important. Relevant considerations may include the independence and impartiality of the tribunal, the neutrality of the seat, the applicable rules, the allocation of costs, the scope of document production and whether the arbitration gives the implementer a genuine opportunity to present its case.
The terms of the interim licence will also matter. An offer that exposes the implementer to exclusionary relief while the arbitration is pending may be assessed differently from one that provides an immediate worldwide licence and protects the implementer until the final terms have been determined.
Conclusion
FRAND arbitration is attractive because it addresses the commercial reality of SEP licensing more directly than fragmented national litigation. A single tribunal may determine the terms of a global portfolio licence, draw on specialist patent, economic and competition-law expertise, preserve commercially sensitive evidence and tailor the procedure through patent sampling, staged hearings, interim licensing arrangements and coordination with related court proceedings.
Those advantages should not be overstated. Arbitration still depends on a valid basis of consent. Comparable licences may be difficult to obtain, awards generally affect only the parties before the tribunal, and questions of validity, competition law, arbitrability and public policy may complicate recognition and enforcement. Confidentiality, while commercially valuable, may also limit the development of public guidance on royalty methodologies and the boundaries of FRAND conduct.
The emerging institutional frameworks of WIPO and the UPC Patent Mediation and Arbitration Centre nevertheless show that arbitration is becoming better adapted to the distinctive demands of SEP disputes. Acer v Nokia adds a further and potentially significant development: an SEP owner may, in appropriate circumstances, comply with its RAND or FRAND obligation by offering an immediate global licence whose final terms are determined through a fair and independent arbitral process.
The decision does not make arbitration compulsory, nor does it establish that every arbitration-linked offer will be FRAND. Much will depend on the neutrality of the process, the terms of the interim licence and whether the implementer has a genuine opportunity to present its case. It does, however, demonstrate that arbitration may form part of the substantive licensing offer itself, rather than merely serving as a procedural alternative after negotiations fail.
Arbitration is therefore unlikely to displace national patent litigation altogether. Courts will continue to play an essential role in infringement, validity and enforcement. But where the real dispute concerns the terms of a worldwide portfolio licence, arbitration may increasingly provide the most coherent forum for resolving the commercial centre of the controversy.
[1] S. Pepe et al., International Arbitration of SEP FRAND Royalties, 39(2) Touro Law Review 579, p. 580.
[2] Id. p. 581.
[3] T. Halket, Divergence and Convergence in the Arbitration of IP Disputes, in N. Comair-Obeid and S. Brekoulakis (eds.), The Plurality and Synergies of Legal Traditions in International Arbitration: Looking Beyond the Common and Civil Law Divide (2023), p. 353.
[4] S. Pepe et al., International Arbitration of SEP FRAND Royalties, 39(2) Touro Law Review 579, p. 581.
[5] T. Halket, Divergence and Convergence in the Arbitration of IP Disputes, in N. Comair-Obeid and S. Brekoulakis (eds.), The Plurality and Synergies of Legal Traditions in International Arbitration: Looking Beyond the Common and Civil Law Divide (2023), p. 353; P. Picht and G. Loderer, Arbitration in SEP/FRAND Disputes: Overview and Core Issues, 36(5) J. of Int’l Arb. 575, p. 576.
[6] R. Murthy, Why Can’t We Be FRANDS?: Anti-Suit Injunctions, International Comity, and International Commercial Arbitration in Standard-Essential Patent Litigation, 75(5) Vanderbilt Law Review 1609, p. 1612; P. Picht and G. Loderer, Arbitration in SEP/FRAND Disputes: Overview and Core Issues, 36(5) J. of Int’l Arb. 575, p. 578; S. Pepe et al., International Arbitration of SEP FRAND Royalties, 39(2) Touro Law Review 579, p. 580.
[7] K. Korea, The Anti-Suit Injunction Conundrum: How We Got Here and How to Avoid It, 15 February 2022, https://ipwatchdog.com/2022/02/15/anti-suit-injunction-conundrum-got-avoid/# (last accessed 20 July 2026); I. Nikolic, Global Standard Essential Patent Litigation: The Anti-Suit and Anti-Anti-Suit Injunctions, 30(2) Geo. Mason L. Rev. 427, pp. 431-433.
[8] K. Korea, The Anti-Suit Injunction Conundrum: How We Got Here and How to Avoid It, 15 February 2022, https://ipwatchdog.com/2022/02/15/anti-suit-injunction-conundrum-got-avoid/# (last accessed 20 July 2026); I. Nikolic, Global Standard Essential Patent Litigation: The Anti-Suit and Anti-Anti-Suit Injunctions, 30(2) Geo. Mason L. Rev. 427, pp. 431-433.
[9] I. Nikolic, Global Standard Essential Patent Litigation: The Anti-Suit and Anti-Anti-Suit Injunctions, 30(2) Geo. Mason L. Rev. 427, p. 431.
[10] I. Nikolic, Global Standard Essential Patent Litigation: The Anti-Suit and Anti-Anti-Suit Injunctions, 30(2) Geo. Mason L. Rev. 427, p. 431.
[11] Id. p. 432.
[12] Hoffman Eitle, Unwired Planet v Huawei – UK Supreme Court decision on FRAND Licensing for SEPs, https://www.hoffmanneitle.com/news/case-reports/20200911%20he-unwired-planet-v-huawei-decision-report.pdf (last accessed 23 July 2026).
[13] I. Nikolic, Global Standard Essential Patent Litigation: The Anti-Suit and Anti-Anti-Suit Injunctions, 30(2) Geo. Mason L. Rev. 427, p. 429.
[14] Ibid.
[15] See S. Al-Marzoog et al., Competing Global FRAND Determinations: UK and Chinese Courts Reach Divergent Conclusions in Samsung-ZTE Cellular SEP Dispute, 6 May 2026, https://www.clearygottlieb.com/news-and-insights/publication-listing/competing-global-frand-determinations (last accessed 23 July 2026).
[16] J. Lamberson and S. Gopalan, Arbitration as the new forum for global FRAND disputes? What the UK Court of Appeal’s Nokia ruling means for SEP licensors and implementers, 27 May 2026, https://www.whitecase.com/insight-alert/arbitration-new-forum-global-frand-disputes-what-uk-court-appeals-nokia-ruling-means (last accessed 23 July 2026).
[17] S. Pepe et al., International Arbitration of SEP FRAND Royalties, 39(2) Touro Law Review 579, p. 587.
[18] P. Picht and G. Loderer, Arbitration in SEP/FRAND Disputes: Overview and Core Issues, 36(5) J. of Int’l Arb. 575, p. 579; J. Lamberson and S. Gopalan, Arbitration as the new forum for global FRAND disputes? What the UK Court of Appeal’s Nokia ruling means for SEP licensors and implementers, 27 May 2026, https://www.whitecase.com/insight-alert/arbitration-new-forum-global-frand-disputes-what-uk-court-appeals-nokia-ruling-means (last accessed 23 July 2026); S. Pepe et al., International Arbitration of SEP FRAND Royalties, 39(2) Touro Law Review 579, p. 599.
[19] P. Picht and G. Loderer, Arbitration in SEP/FRAND Disputes: Overview and Core Issues, 36(5) J. of Int’l Arb. 575, p. 579.
[20] C. Heard et al., Arbitration of FRAND disputes, 4 November 2022, https://cms.law/en/aut/legal-updates/Arbitration-of-FRAND-disputes (last accessed 23 July 2026).
[21] T. Halket, Divergence and Convergence in the Arbitration of IP Disputes, in N. Comair-Obeid and S. Brekoulakis (eds.), The Plurality and Synergies of Legal Traditions in International Arbitration: Looking Beyond the Common and Civil Law Divide (2023), p. 354; S. Pepe et al., International Arbitration of SEP FRAND Royalties, 39(2) Touro Law Review 579, pp. 602-603.
[22] S. Pepe et al., International Arbitration of SEP FRAND Royalties, 39(2) Touro Law Review 579, p. 603.
[23] T. Alkaladi, Arbitration of Patent Disputes: A Comparison of the Law in the United States, Switzerland, and Australia–Part III, 78(4) Dispute Resolution Journal 367, p. 370; T. Halket, Divergence and Convergence in the Arbitration of IP Disputes, in N. Comair-Obeid and S. Brekoulakis (eds.), The Plurality and Synergies of Legal Traditions in International Arbitration: Looking Beyond the Common and Civil Law Divide (2023), p. 352.
[24] UPC, Welcome to the page of the Patent Mediation and Arbitration Centre of the Unified Patent Court, https://www.unifiedpatentcourt.org/en/court/patent-mediation-and-arbitration-centre (last accessed 23 July 2026).
[25] PMAC Arbitration Rules, Article 48(1)-(3).
[26] Id. Article 48(2)(ii).
[27] Id. Article 48(2)(v).
[28] Id. Article 48(2)(vii)-(viii).
[29] Id. Article 47.
[30] Id. Article 50.
[31] Id. Article 48(2)(vi).
[32] Id. Article 48(2)(xi).
[33] Id. Article 48(3).
[34] Id. Article 49.
[35] WIPO, WIPO Arbitration and Mediation Center, https://www.wipo.int/amc/en/center/background.html (last accessed 23 July 2026).
[36] WIPO, WIPO Arbitration for FRAND Disputes, https://www.wipo.int/amc/en/center/specific-sectors/ict/frand/annex1/ (last accessed 23 July 2026).
[37] Id. para. 1.
[38] Id. para. 2.
[39] Id. para. 4.
[40] Id. para. 8.
[41] Acer Incorporated and others v Nokia Technologies Oy [2026] EWCA Civ 564 [4]-[6].
[42] Id. [11], [27] and [29].
[43] Id. [63]-[67].
[44] Id. [69], [83]-[85].
[45] M. Dhenne, Come Together? Acer v Nokia and the Contractual Turn of FRAND Arbitration, 13 May 2026, https://legalblogs.wolterskluwer.com/patent-blog/come-together-acer-v-nokia-and-the-contractual-turn-of-frand-arbitration/ (last accessed 23 July 2026).
[46] Acer Incorporated and others v Nokia Technologies Oy [2026] EWCA Civ 564 [74]–[77].
[47] Id. [75].
[48] Id. [80]-[84].
[49] Id. [69], [85].
[50] Id. [89]-[91].
[51] J. Lamberson and S. Gopalan, Arbitration as the new forum for global FRAND disputes? What the UK Court of Appeal’s Nokia ruling means for SEP licensors and implementers, 27 May 2026, https://www.whitecase.com/insight-alert/arbitration-new-forum-global-frand-disputes-what-uk-court-appeals-nokia-ruling-means (last accessed 23 July 2026).
[52] Acer Incorporated and others v Nokia Technologies Oy [2026] EWCA Civ 564 [80], [87].
