FRAND Interim Licensing – Where Are The Limits?

Over the last year the UK Court of Appeal has been developing a new line of case law in the FRAND space – creating, for the first time, 'interim licences'. The principle that these decisions establish is that an implementer can ask the UK court to declare interim licensing terms, pending a determination by the UK court of full FRAND licence terms. If the SEP holder refuses to enter into the interim licence they risk being declared an unwilling licensor.

Interim licences

The first interim licensing decision arose in Panasonic Holdings Corporation v Xiaomi Technology UK Limited [2024] EWCA Civ 1143(which we covered here) and the circumstances in which interim licences are available was expanded in Lenovo v Ericsson [2025] EWCA Civ 182 (which we covered here). In both of these cases there was parallel litigation proceeding between the parties across multiple jurisdictions. The implementers had agreed to be bound by UK court determined FRAND terms but there remained a risk of injunction in other jurisdictions outside the UK.

The court's justification for ordering interim licences in these cases was that a willing licensor would not pursue injunctions in other proceedings when they know that they will ultimately be able to secure FRAND terms determined by the UK courts. The SEP holder continuing to pursue injunctive relief alongside the UK proceedings was taken as an indication that they sought supra-FRAND terms and so were arguably acting as an unwilling licensor. The UK courts therefore proposed interim licensing terms between the parties pending the outcome of the UK proceedings and, if the SEP holder refused to enter into such an interim licence, then the court would issue a declaration that they were indeed acting as an unwilling licensor.

Both the Panasonic and Lenovo cases ultimately settled following the UK court's declaration of interim licence terms.

The Samsung v ZTE decision

In the Samsung v ZTE case the parties, presumably mindful of the prior Court of Appeal decisions, both accepted that it was appropriate to enter into an interim licence. However, the parties proposed alternative approaches to the interim licences. By the time of the judgment the key distinction was as to the forum in which the final FRAND licence terms would be determined. Samsung sought a licence on the standard terms – i.e. pending a UK court determined full FRAND licence. In contrast, ZTE wanted the final FRAND licence terms determined by the Chongqing Intermediate People's Court in China.

There was no dispute as to whether the Chonqing court could determine FRAND terms and so the only question before the court was whether it was reasonable for ZTE to insist on Chongqing as the forum for a final FRAND determination. Mr Justice Mellor decided at first instance against ZTE, finding that a willing licensor in ZTE's position would have moved as quickly as possible to a final FRAND determination in the UK proceedings and would not have commenced parallel foreign proceedings seeking injunctive relief. Arguably of some relevance to his decision was the fact that the UK proceedings had been commenced first.

The decision has now been overturned on appeal. Lord Justice Arnold, giving the leading judgment, found that ZTE had not acted in bad faith. In particular, he noted that "it does not constitute bad faith for a SEP owner to seek to force an implementer to accept determination of FRAND terms by the SEP holder's preferred court rather than the implementer's preferred court" and so ZTE was justified in seeking a FRAND determination in the Chongqing court.

This is certainly not the end of interim licensing in the UK but does mark a limit on its scope. There remain many open questions around how and when it is appropriate for parties to seek injunctive relief in parallel proceedings and, as Lord Justice Birss noted "[t]he consequences of how to deal with more than one court being seised with the issue of determining what is FRAND will have to be worked out internationally over time on a case by case basis."

Interplay with European courts

As noted above, the Panasonic and Lenovo cases weresettled after the UK interim licensing decisions. This has led some commentators to suggest that the UK is seizing jurisdiction over global FRAND licence rate setting by the back door. The interim licence effectively means that other litigation in which an injunction is sought should cease (because the interim licence is in place) and it is only the final UK FRAND licence determination that should continue.

Importantly, this effectively ends parallel infringement actions in Europe – including in the UPC and Germany. This has led to a response from these courts, which came to a head in Amazon v InterDigital, where so called 'anti-interim licence injunctions' were ordered on an ex parte basis by the UPC and German national courts. These prevented Amazon from pursuing interim licence relief in the UK High Court.

This precipitated a number of hearings in the High Court in response. The net result has so far been an anti-anti-suit injunction (AASI) to prevent InterDigital taking action that would impede a final FRAND determination in the UK, but the AASI does not extend to the anti-interim licence injunction. The UK FRAND trial has also been ordered to take place on an expedited basis, such that it could be decided before German or UPC infringement proceedings. The basis for this expedition was to address "the risk of an injunction with the obvious commercial disruption and damage that would bring, and the danger of Amazon being coerced into agreeing supra-FRAND rates to avoid such an injunction".

This is clearly not the end of the discussion on how European and UK courts should address FRAND issues alongside each other, and there are likely to be more cases to come before it can be resolved.

Summary

FRAND disputes continue to be a rapidly developing area of law. While some limits have now been placed on the circumstances in which interim licences can be ordered, they remain a powerful tool for implementers. It remains to be seen how the award of 'anti-interim licence injunctions' will work itself out between the UK and other courts, but it seems clear that a race to filing and judgment will remain a key component of multi-jurisdictional FRAND disputes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.