Published On: July 16, 2026
Authored By: Priya Ray
National Law University Delhi
Abstract
Standard Essential Patents (SEPs), being patents necessarily practised by any implementer of a technical standard, occupy a uniquely contested space in intellectual property law. The holders of such patents are contractually bound, through declarations to standard-setting organisations such as ETSI and the ITU, to license on Fair, Reasonable, and Non-Discriminatory (FRAND) terms. Yet neither the content of that obligation nor the royalty rates it permits has been authoritatively settled. The result is a global litigation ecosystem defined by forum shopping, competing judicial rate-setting, and the procedural weaponisation of Anti-Suit Injunctions (ASIs) and Anti-Anti-Suit Injunctions (AASIs) across the United Kingdom, United States, European Union, India, and China. This article examines three interlocking problems: the jurisdictional contest between national courts to set binding global FRAND royalty rates, the divergent methodologies (top-down apportionment, smallest saleable patent-practising unit, and comparables analysis) deployed by courts to determine royalty quantum, and the disproportionate competitive harm inflicted upon manufacturers and consumers in developing economies. Drawing on decisions including Unwired Planet International Ltd v Huawei Technologies Co Ltd [2020] UKSC 37, Sisvel International SA v Haier Deutschland GmbH, Federal Court of Justice of Germany (Bundesgerichtshof), Case No. KZR 36/17 (5 May 2020), and the Delhi High Court’s SEP jurisprudence, the article argues that the present regime systematically disadvantages the Global South and advocates for a binding international FRAND arbitration mechanism under WIPO auspices as the most principled and equitable systemic remedy.
Keywords: Standard Essential Patents; FRAND Licensing; Anti-Suit Injunction; Royalty Rate-Setting; Global South; Patent Hold-Up; Jurisdictional Competition; Technology Standards; Competition Law; International Arbitration
I. Introduction
Every time a smartphone connects to a 4G or 5G network, it relies on hundreds of patented technologies that have been deliberately woven into industry-wide standards. These are Standard Essential Patents (SEPs), being patents whose claims are necessarily practised by any implementer wishing to comply with a given technical standard. Unlike ordinary patents, a SEP holder cannot simply refuse to license: participation in a standard-setting organisation (SSO) such as the International Telecommunication Union (ITU) or the European Telecommunications Standards Institute (ETSI) requires the patent holder to commit, in advance, to licensing on Fair, Reasonable, and Non-Discriminatory (FRAND) terms.[1]
The FRAND obligation is both promise and puzzle. It is a promise because it prevents a SEP holder from deploying patent exclusivity to hold an entire industry to ransom after the standard has been adopted, a conduct economists call “patent hold-up.” It is a puzzle because neither statutes nor SSO policies define what rates and terms are, in fact, fair, reasonable, and non-discriminatory.[2] Courts in the United States, the United Kingdom, Germany, China, and India have each developed their own methodologies for setting FRAND rates, producing a proliferation of conflicting decisions and, increasingly, a jurisdictional arms race in which each court seeks to set a global royalty rate before a rival forum can do so first.[3]
This article examines three interlocking problems: (i) the procedural weaponisation of anti-suit injunctions across major jurisdictions; (ii) the unresolved doctrinal question of how FRAND royalties should be calculated; and (iii) the disproportionate burden that aggressive SEP litigation places on the technology markets of developing economies, particularly India and the broader Global South. It concludes by advocating for binding international arbitration as the most tractable systemic remedy.
II. The Jurisdictional Tug of War: Anti-Suit Injunctions and the Race for Global Rate-Setting
The defining procedural battleground in contemporary SEP litigation is the Anti-Suit Injunction (ASI), a domestic court order restraining a party from pursuing parallel proceedings in a foreign jurisdiction. In the SEP context, a patent owner may seek an ASI to prevent an implementer from litigating royalty rates in a court perceived to be more favourable to licensees, while implementers may seek an ASI to freeze enforcement actions in jurisdictions that might award injunctive relief.
The United Kingdom Supreme Court’s decision in Unwired Planet International Ltd v Huawei Technologies Co Ltd [2020] UKSC 37[4] was the landmark assertion that an English court could set a FRAND rate applicable worldwide. The Supreme Court held that an implementer that refused to accept a FRAND licence on global terms could be excluded from the UK market by injunction, even though the underlying assets in dispute spanned many countries. The decision emboldened courts in other common-law jurisdictions to assert similar extra-territorial competence.
India’s Delhi High Court has emerged as a surprisingly active participant. In Telefonaktiebolaget LM Ericsson v Lava International Ltd,[5] the Court not only granted an interim injunction against an Indian handset maker pending FRAND determination, but also engaged substantively with the question of whether the royalty demands were non-discriminatory across similarly situated licensees. More recently, in InterDigital Technology Corp v Xiaomi Corp,[6] the Delhi High Court restrained Xiaomi from pursuing or enforcing an anti-suit injunction it had obtained from the Wuhan Intermediate People’s Court — India’s first confirmed Anti-Anti-Suit Injunction (AASI), and part of the same broader pattern of dueling injunctions seen in European courts.
The Court of Justice of the European Union (CJEU) in Huawei Technologies Co Ltd v ZTE Corp (Case C-170/13)[7] had earlier sought to calibrate when a SEP holder could seek injunctive relief without abusing a dominant position under Article 102 TFEU. The Huawei v ZTE framework imposes a sequential duty of notification, negotiation, and written FRAND offer before an injunction may be sought — a procedural choreography that, in practice, major litigants have manipulated to accelerate, rather than de-escalate, conflict.
The result is a system in which the choice of litigation forum is itself a strategic weapon. Companies with global patent portfolios file simultaneously in multiple jurisdictions, generating a web of injunction applications designed to exhaust a smaller opponent’s litigation budget rather than to resolve the underlying royalty dispute on its merits. The asymmetry of this warfare is particularly acute for manufacturers headquartered in emerging economies, whose domestic courts may lack the institutional capacity, or the case law, to adjudicate complex global FRAND disputes swiftly.
III. Determining “FRAND-ness”: Judicial Methodologies and Their Limits
If the jurisdictional question is about who decides, the methodological question is about how. Courts have converged on several analytical tools, yet their outputs diverge so sharply that one is compelled to ask whether FRAND rate-setting is a principled legal exercise or an exercise in sophisticated estimation.
The dominant American approach, rooted in Georgia-Pacific Corp v United States Plywood Corp,[8] applies a multi-factor willing licensor/willing licensee analysis, adjusted for the FRAND context by the Ninth Circuit in Microsoft Corp v Motorola Inc.[9] Under this framework, the “smallest saleable patent-practising unit” (SSPPU) doctrine requires that the royalty base be limited to the specific component that practises the patent — typically a chip or a modem — rather than the entire handset. The objective is to prevent “royalty stacking,” where the cumulative demands of multiple SEP holders make device manufacture economically unviable.
In In re Innovatio IP Ventures LLC,[10] the Northern District of Illinois pioneered the use of a “top-down” approach: beginning with a reasonable aggregate royalty burden for a given standard, apportioning it across all essential patents in the pool, and then determining the licensee’s share based on the relative technical contribution of the patent-in-suit. This approach has intuitive appeal because it anchors the analysis in market-wide evidence rather than the particularities of individual bilateral negotiations.
The Qualcomm litigation, ultimately settled between Apple and Qualcomm in April 2019 after years of multi-jurisdictional combat,[11] exposed the practical difficulties of the SSPPU doctrine when the commercial bargaining reality is that global licences are negotiated at the device level. Courts acknowledged that Qualcomm’s practice of licensing at the device level, while legally contestable, reflected how the market had actually functioned for decades.
The UK Supreme Court in Unwired Planet adopted a flexible “comparables” methodology, examining prior licence agreements between the parties and with third parties as the best available evidence of what a willing licensor and willing licensee would have agreed.[12] The Federal Circuit, in reviewing the TCL v Ericsson matter, criticised this approach for insufficiently accounting for the fact that many comparable licences are themselves the product of litigation settlements, and therefore potentially infected by the very coercive dynamics that FRAND is designed to prevent.[13]
The common thread across methodologies is judicial discomfort with precision. Courts in TCL v Ericsson acknowledged that the determination involves “certain inevitable imprecision,”[14] a candid admission that FRAND rate-setting is, at least in part, an informed judicial estimate rather than a mathematically verifiable output. The English Court of Appeal in Conversant Wireless Licensing SARL v Huawei Technologies confirmed that there is a range of FRAND-compliant outcomes rather than a single correct royalty,[15] a concession that further undermines the claim that any one national court can authoritatively declare a globally binding rate. The UK Supreme Court, while endorsing global rate-setting in principle, notably acknowledged that “FRAND has a relative, not an absolute, character.”[16]
The European Commission’s 2023 proposal for a SEP Regulation, which would introduce mandatory essentiality checks and a third-party conciliation procedure for FRAND royalty determination prior to litigation,[17] represents the most ambitious recent attempt to impose methodological discipline. However, the proposal remains contested, and its scope is confined to the European Union, leaving global rate-setting tensions unresolved.
IV. Public Policy and Competitive Harm: The Global South Dimension
The consequences of FRAND litigation dysfunction are not evenly distributed. They bear most heavily on the manufacturers and consumers of developing economies, where mobile connectivity has become the principal vehicle for financial inclusion, healthcare delivery, and educational access.
India’s experience is instructive. When Ericsson initiated SEP enforcement actions against Indian handset manufacturers Micromax and Intex before the Competition Commission of India (CCI) in 2013–14,[18] the proceedings exposed a profound asymmetry: domestically-owned manufacturers with thin margins could not sustain the cost of global patent litigation against a Nordic telecommunications major with approximately 400 SEPs granted in India out of a portfolio of roughly 33,000 patents worldwide. The Delhi High Court subsequently stayed the CCI proceedings,[19] finding a jurisdictional conflict with its own parallel FRAND enquiry — a collision of domestic regulatory and judicial competences that left the core question of royalty quantum unresolved for years.
The systemic effect on market entry is significant. When SEP royalty demands are calculated as a percentage of device value rather than component cost — as was the practice challenged in the Ericsson India disputes — the effective royalty burden on a budget smartphone can constitute a disproportionate fraction of the manufacturer’s margin. Government policy documents, including recommendations by the Telecom Regulatory Authority of India (TRAI) and the Ministry of Electronics and Information Technology, have acknowledged that uncertain licensing costs inhibit domestic manufacturing investment.[20]
The German Federal Court of Justice’s landmark 2020 judgment in Sisvel International SA v Haier Deutschland GmbH[21] held that a would-be licensee must clearly and unconditionally declare its willingness to take a FRAND licence “on whatever terms are in fact FRAND,” and that a delayed or conditional response to a SEP holder’s notification can itself defeat the implementer’s competition-law defence to an injunction. The decision tightened the practical operation of the Huawei v ZTE framework in a manner that strengthens the hand of SEP holders, and its downstream effect on emerging-market implementers, who typically possess weaker negotiating positions, warrants close attention.
The automotive sector is generating a parallel crisis. As vehicles incorporate 5G connectivity and V2X (vehicle-to-everything) communication, automotive manufacturers previously outside the telecommunications patent ecosystem are receiving SEP licensing demands. German courts have issued injunctions against major vehicle manufacturers on SEP grounds,[22] with potential production-line implications that dwarf the mobile handset disputes. For countries like India that are simultaneously developing domestic EV manufacturing capability, the prospect of SEP exposure in the automotive domain represents a compounding competitive disadvantage.
The English courts have recently addressed the “willing licensee” standard in the context of injunctive relief in Optis Wireless Technology LLC v Apple Inc,[23] holding that Apple’s conduct in litigating rather than negotiating rendered it an “unwilling licensee” subject to injunction, notwithstanding Apple’s stated willingness to accept a court-determined FRAND rate. If applied to resource-constrained emerging-market defendants who litigate out of necessity rather than strategy, this standard risks converting the inability to settle into a legal disability.
The structural problem is that SEP licensing markets are bilateral monopolies: each licensor holds a portfolio of rights that are, by definition, impossible for the implementer to design around, while each implementer represents a specific revenue opportunity that the licensor cannot replicate elsewhere. In such markets, the bargaining outcome is determined less by objective value than by relative litigation capacity — a metric that systematically disfavours the Global South.[24]
The deployment of 5G infrastructure in the Global South is central to achieving targets under the UN Sustainable Development Goals, particularly SDG 9 (industry, innovation, and infrastructure). The ITU has reported over 5.4 billion unique mobile subscribers globally, with the majority of new subscribers concentrated in Asia-Pacific and Sub-Saharan Africa.[25] Yet the GSMA’s connectivity data demonstrates that the cost of handset hardware remains among the greatest barriers to mobile internet adoption in low-income markets.[26] Royalty stacking, where cumulative SEP demands from multiple patent holders on a single device can add materially to bill-of-materials costs,[27] directly inflates those barriers. The CCI itself, in its orders against Ericsson, found prima facie evidence that non-discriminatory licensing was illusory: larger, creditworthy licensees obtained materially lower effective royalty rates than smaller domestic manufacturers.[28]
V. Conclusion: The Case for International Arbitration
The SEP-FRAND regime, as currently constituted, is in a state of productive dysfunction. Courts are actively competing for jurisdictional primacy, methodologies for royalty determination diverge across legal systems, and the regulatory gap between a patent holder’s ability to sue globally and an implementer’s ability to defend globally is structurally unjust. These pathologies are not merely academic: they translate into elevated device prices, deterred market entry, and suppressed technology adoption in precisely the economies that most need connectivity-driven development.
The European Commission’s proposed SEP Regulation[29] is a meaningful but geographically limited intervention. What the global system requires is a dedicated international arbitration mechanism, operating under the auspices of the World Intellectual Property Organization (WIPO) or an analogous body, empowered to set FRAND rates with binding effect across jurisdictions, on the basis of transparent methodological guidelines and with procedural rules designed to equalise the participation costs of implementers from developing economies.[30]
Such a mechanism would need to address three design problems: first, ensuring that comparables data submitted by major licensors does not conceal discriminatory pricing buried in confidentiality clauses; second, developing a principled consensus on whether the SSPPU or device-level royalty base is the appropriate anchor for emerging-market implementers; and third, establishing a pro bono or fee-waiver regime to ensure that small and medium-sized manufacturers in the Global South can access the forum.
Continued forum shopping, proliferating ASIs and AASIs, and the fragmentation of global royalty rates across incompatible national decisions serves neither the declared objective of FRAND (promoting the wide adoption of beneficial technology) nor the broader international commitment to ensuring that digital infrastructure reaches the unconnected. In the age of 5G, 6G preparedness, and IoT ubiquity, the rules governing the price of access to foundational technology standards are too important to be left to adversarial cross-border litigation. Principled international arbitration is not merely desirable; it is overdue.
References
[1] ETSI, “ETSI Intellectual Property Rights Policy” (2023) cl 6.1.
[2] Jorge Contreras, “A Brief History of FRAND: Analyzing Current Debates in Standard Essential Patents and Fair, Reasonable and Non-Discriminatory Licensing” (2015) 80 Antitrust LJ 39.
[3] Ericsson Inc v D-Link Systems Inc, 773 F 3d 1201, 1230 (Fed Cir 2014).
[4] Unwired Planet International Ltd v Huawei Technologies Co Ltd [2020] UKSC 37; [2020] Bus LR 2422.
[5] Telefonaktiebolaget LM Ericsson v Lava International Ltd, CS(COMM) 65/2016, Delhi High Court, order dated 9 March 2022.
[6] InterDigital Technology Corp v Xiaomi Corp, CS(COMM) 295/2020, Delhi High Court, judgment dated 3 May 2021.
[7] Huawei Technologies Co Ltd v ZTE Corp (Case C-170/13) EU:C:2015:477; [2015] Bus LR 1261.
[8] Georgia-Pacific Corp v United States Plywood Corp, 318 F Supp 1116 (SDNY 1970).
[9] Microsoft Corp v Motorola Inc, 795 F 3d 1024 (9th Cir 2015).
[10] In re Innovatio IP Ventures LLC Patent Litigation, 956 F Supp 2d 925 (ND Ill 2013).
[11] Apple Inc v Qualcomm Inc, 4:17-cv-00108-H-MDD (SD Cal, settled April 2019); see Ian Sherr, “Apple-Qualcomm Settle Billion-Dollar Legal Battle” CNET (17 April 2019).
[12] Unwired Planet [2020] UKSC 37 (n 4) [76]–[80].
[13] TCL Communication Technology Holdings Ltd v Telefonaktiebolaget LM Ericsson, No CV 15-2370 (CD Cal 2017), rev’d in part, 943 F 3d 1360 (Fed Cir 2019).
[14] Ibid, 943 F 3d 1360, 1373.
[15] Conversant Wireless Licensing SARL v Huawei Technologies [2020] EWCA Civ 1292 [34].
[16] Unwired Planet [2020] UKSC 37 (n 4) [95].
[17] European Commission, “Proposal for a Regulation of the European Parliament and of the Council on Standard Essential Patents,” COM(2023) 232 final, 27 April 2023.
[18] Competition Commission of India, In re Micromax Informatics Ltd v Telefonaktiebolaget LM Ericsson, Case No 50/2013 (CCI, 12 November 2013); In re Intex Technologies (India) Ltd v Telefonaktiebolaget LM Ericsson, Case No 76/2013 (CCI, 16 January 2014).
[19] Telefonaktiebolaget LM Ericsson v Competition Commission of India, W.P.(C) Nos 464/2014 & 1006/2014, Delhi High Court, judgment dated 30 March 2016.
[20] TRAI, “Recommendations on Promoting Local Manufacturing of Mobile Handsets” (2017); Ministry of Electronics and Information Technology, “Draft National Policy on Electronics 2019” (Government of India).
[21] Sisvel International SA v Haier Deutschland GmbH, Federal Court of Justice of Germany (Bundesgerichtshof), Case No KZR 36/17, judgment dated 5 May 2020.
[22] Sharp Corp v Daimler AG, Regional Court Mannheim, Case No 2 O 34/19, judgment of 18 August 2020; Audi AG v Acacia Research Group LLC, Regional Court Munich I, Case No 21 O 3995/20.
[23] Optis Wireless Technology LLC v Apple Inc [2022] EWHC 1229 (Pat), affd [2023] EWCA Civ 1411.
[24] See Rudi Bekkers and others, “Intellectual Property and Standard Setting” (OECD Background Report DAF/COMP(2019)3, 2019) 47–52.
[25] ITU, “ICT Facts & Figures 2023” (International Telecommunication Union, Geneva 2023).
[26] GSMA, “The State of Mobile Internet Connectivity 2023” (GSMA Intelligence, London 2023).
[27] Keith Mallinson, “The Case Against Mandatory SEP Licensing Registries” (2022) 17 J Competition L & Econ 399, 411.
[28] Competition Commission of India, In re Micromax (n 18); In re Intex (n 18).
[29] European Commission, “Proposal for a Regulation … on Standard Essential Patents,” COM(2023) 232 final (n 17).
[30] WIPO, “WIPO Arbitration and Mediation Center: Standard Essential Patents” (WIPO, Geneva 2022); Jorge Contreras and David Newman, “Developing a Framework for Arbitrating Standard Essential Patent Disputes” (2014) J Disp Resol 23.
