First FRAND judgment of the UPC

On 22 November the UPC handed down its first full decision addressing the merits of a FRAND defence in Panasonic v OPPO UPC_CFI_ 210/2023 (22/11/2024) (published in German here). In its decision, the Mannheim local division has followed an approach to FRAND licensing very similar to that of the German national courts.

In infringement proceedings brought by Panasonic, the UPC ordered an injunction against Oppo covering Germany, France, Italy, the Netherlands and Sweden. This followed from the UPC's finding that Panasonic's patent was valid, infringed and essential to the 4G standard, and its dismissal of Oppo's FRAND defence.

Of particular interest is how the UPC has approached the FRAND defence raised by Oppo, which resulted in a finding that Oppo was an unwilling licensee. Applying the ECJ guidance in Huawei v ZTE, the UPC's decision on this point was based on its finding that (1) Oppo had delayed licensing negotiations and failed to provide sufficient information about its products, and (2) Oppo had made offers restricted to Europe, the USA and Japan, rather than for a worldwide licence.

The general approach adopted by the Mannheim local division is in line with our earlier predictions that the German local divisions at the UPC were likely to take an approach to FRAND very similar to that of the German national courts set by the Sisvel v Haier decision. This is despite an amicus curiae brief recently submitted by the European Commission in German national proceedings criticising that approach (which we reported on here). The UPC noted this criticism but stepped through the Huawei v ZTE decision and its application by European and UK courts across some 20 pages of the judgment, ultimately concluding that it was satisfied the UPC/German approach was consistent with the ECJ's guidance. It is also worth noting that the UPC declined to step in to set a FRAND licence rate itself (in contrast to the approach of the UK courts) and has instead left it to the parties to reach agreement on this.

Overall, this first ever FRAND decision from the UPC is broadly in line with expectations – the Mannheim local division has followed a similar approach to that of the German national courts. If this approach is adopted more broadly across the UPC divisions then it will make the UPC an attractive venue for enforcement by SEP holders, offering the leverage of an injunction covering multiple European jurisdictions. However, we will need to wait for FRAND issues to reach the UPC Court of Appeal before a truly clear and unified approach can emerge.