The entry into force of the Unitary Patent system and the growing influence of the Unified Patent Court (UPC) have profoundly reshaped the international technology litigation landscape. In highly standardised sectors such as cellular telecommunications, the Internet of Things, artificial intelligence and video compression, standard-essential patents (SEPs) are central to value creation and frequently give rise to complex disputes. Although procedural harmonisation was the European legislature’s stated objective, the interaction between the exclusive rights conferred by a patent and the requirements of good-faith negotiation on fair, reasonable and non-discriminatory (FRAND) terms has acquired an unprecedented strategic dimension before the UPC. Direct access to a unified market of more than 300 million consumers now gives portfolio holders a uniquely powerful enforcement tool, while requiring industrial companies to overhaul the way they manage litigation risk.
Historically, the handling of SEP disputes in Europe was marked by geographical fragmentation and significant differences in legal approach. German courts traditionally took a strict position and were willing to grant injunctions where an implementer had failed to comply with procedural requirements, whereas courts in other countries favoured a more pragmatic approach, focusing on the determination of an appropriate royalty or refusing injunctive relief. By establishing a single court comprising local and regional divisions and a central division, the unified system removes these territorial barriers. For right holders, the UPC’s principal attraction lies in the cross-border reach of its decisions. A single injunction issued by a local division may halt the marketing of equipment or components throughout the participating Member States, creating an immediate and systemic operational risk for any industrial company targeted.
This power to grant pan-European injunctions fundamentally alters the balance of power during pre-litigation negotiations. The pace imposed by the UPC Rules of Procedure, which provide for streamlined proceedings leading to a hearing on the merits within a target period of 12 months, deprives implementers of the delaying or avoidance strategies sometimes used before slower national courts. Faced with the threat of an injunction across the continent, the financial risk of suspended deliveries will often exceed the additional cost of a disputed royalty. The mere prospect of UPC proceedings therefore requires parties throughout the value chain to approach licence negotiations more promptly and to document their commercial positions rigorously.
Against this procedurally demanding background, the application of the framework established by the Court of Justice of the European Union in Huawei v ZTE is a central issue in proceedings before the UPC. The UPC judges must assess whether the parties acted in good faith at every stage of the pre-litigation process: detailed notification of the infringement; the implementer’s expression of willingness to take a licence on FRAND terms; the SEP holder’s submission of a firm and sufficiently detailed offer; and, where appropriate, a counter-offer supported by suitable financial security. The UPC examines whether the SEP holder’s conduct is abusive within the meaning of Article 102 of the Treaty on the Functioning of the European Union, or whether the implementer has engaged in delaying tactics to postpone the conclusion of a licence agreement.
One of the UPC’s main contributions to the developing case law is its ability to harmonise the concept of the willing licensee. Previous national case law applied differing criteria when assessing response times or the precision of royalty calculations. The UPC is developing a pragmatic analytical framework based on international commercial practice. Its divisions require implementers to provide full transparency concerning their sales volumes and to demonstrate impeccable financial discipline, including by promptly placing funds in escrow or providing independent guarantees. The success of a FRAND defence now depends on the implementer’s ability to show that the failure to reach an agreement results solely from the SEP holder’s unreasonable financial demands, rather than from a fundamental reluctance to pay fair remuneration.
Alongside the issue of injunctive relief, considerable attention is being paid to whether the UPC has jurisdiction to determine the amount of global royalties. Although the Court’s primary role remains to remedy infringement and assess patent validity, the increasing overlap between substantive patent law and the FRAND defence is leading its judges to examine the true economic value of patent portfolios. When assessing the proportionality of the remedies sought or the amount of damages, the UPC must consider the parties’ pricing methodologies, the cumulative cost of licences, known as royalty stacking, and comparable agreements concluded with third parties in the market. This fact-specific assessment brings the UPC closer to specialist courts in common-law jurisdictions that determine worldwide royalty rates, strengthening its position as a leading forum for resolving the economic aspects of disputes involving major high-tech companies.
In response to these developments, both patent holders and industrial implementers must plan their pre-litigation strategies carefully. For a patent holder, bringing proceedings before the UPC requires thorough preparation before the statement of claim is filed. The selected patents must be technically robust enough to withstand counterclaims for revocation before the central division. The infringement case must also include clear evidence of essentiality, supported by rigorous claim charts and a complete record of each stage of the FRAND negotiations. Any haste or lack of transparency in the initial offer may result in the refusal of injunctive relief and undermine the entire licensing programme.
For implementers, preparing for litigation risk requires continuous monitoring of proceedings and the development of preventive responses. As soon as a potential dispute with an SEP holder is identified, the company must structure its communications so that its willingness to enter into a licence on fair terms is documented unambiguously. Filing protective letters with the UPC Registry can help guard against the risk of provisional measures or evidence-preservation orders being granted without the defendant being heard. From a financial perspective, the ability to arrange bank guarantees promptly to secure the retroactive payment of royalties is an essential prerequisite for resisting applications for preliminary or permanent injunctions.
The Unified Patent Court is ultimately reshaping the global technology litigation landscape. By combining the power to grant pan-European injunctions with rigorous scrutiny of the competitive balance required under the FRAND framework, the UPC provides a faster and more predictable decision-making environment, with strong incentives for investment in research and development. Although the system places greater technical and legal demands on practitioners, it confirms Europe’s position as a major centre for the regulation and resolution of SEP disputes. Companies that incorporate these developments into their global intellectual property strategy will be better placed to manage risk and protect their position in innovation-driven markets.
September 2026
Contributing author
