Standard essential patents: new EPO Observatory study provides greater clarity on determination of FRAND licensing rates
The standards and patents programme at the European Patent Office (EPO) is providing unique insights into how the high-stakes, global interplay between technology standards, digital connectivity and interoperability shapes market adoption of game-changing new technologies. The study will be presented today at a major Euractiv event on European competitiveness in emerging technologies, comprising one of several major programme milestones.
EPO combines launch of study with expert discussion at Euractiv event
Today, the EPO Observatory presents a new study that aims to offer all stakeholders greater clarity on the determination of fair, reasonable and non-discriminatory (FRAND) licensing rates for standard essential patents (SEPs). This is a topic of crucial strategic importance, as the outcomes of related negotiations and disputes directly affect the implementation of patented technologies included in standards. Commitments to FRAND licensing rates aim to preserve the incentives for contributing patented technology to standards while ensuring that standard-compliant products and services continue to benefit consumers, including in major areas that shape our daily lives such as wireless communication and video streaming.
The study reviews the most comprehensive global corpus of related court decisions to date. Its analysis can be used to inform licensing negotiations between technology providers and implementers, as well as the decisions of judges, mediators and arbitrators involved in licensing disputes, including at venues such as the recently inaugurated Patent Mediation and Arbitration Centre of the Unified Patent Court.
The EPO will present the findings of the study at today’s Euractiv event on how Europe can strengthen its competitiveness in emerging technologies, which focuses on the role of standards, policy and licensing frameworks, with quantum technologies as a case study. The event will also examine how standardisation and licensing practices can accelerate market adoption.
Key findings from the analysis of major court judgements from seven jurisdictions
To achieve greater clarity in this complex area, the new study from the EPO Observatory and the research consultancy BRELA examines 65 major court decisions that address key SEP licensing issues, and reveals trends in judgements from seven jurisdictions during the period 2013-2025. The global corpus under review consists of 20 cases and 33 reasoned decisions in which courts set the licensing rate for the parties, a further 19 decisions in which courts assessed whether rates set between parties were fair, and 13 decisions relating to the admissibility of certain calculation methods.
The study shows that, despite differences in legal frameworks, courts across jurisdictions share a common purpose: FRAND licensing terms aim to strike a fair balance between rewarding patent owners and ensuring widespread access to the standard. It also reveals that courts are shifting their focus from defining licensing conditions to applying them. Here, comparable-licence analysis has emerged as the primary method, with top-down analysis used less frequently, often as a cross-check. Both approaches face considerable implementation challenges. Comparable-licence analysis requires careful selection, unpacking and adjustment of licences, while top-down analysis depends on determining an aggregate royalty rate and apportioning it to the patent portfolio at issue. Patent data is central to both approaches, though some indicators are contested. Looking ahead, the Observatory’s patents and standards programme intends to provide support in this area.
How standards drive competition and the role of FRAND licensing terms
Technology standards underpin much of the modern digital economy, enabling interoperability across connectivity and multimedia technologies such as 5G, Wi-Fi, and the major video codecs – precisely the areas to which the court decisions in the new study relate. Many patented technologies may be pertinent to a standard and patent owners will seek licensing fees to recover their investments in these technologies. To ensure that licensing costs are capped at a level that does not hinder other companies from implementing these technologies for the benefit of consumers, the licences must have fair, reasonable and non-discriminatory (FRAND) terms. Standards development organisations (SDOs) therefore work to establish industry-wide technical standards that balance the needs of patent owners and technology implementers. In effect, standards themselves become drivers of economic growth and competition.
Close interplay between SDO documentation and patents
The new study marks the latest milestone in the patents and standards programme, following the first study published in May 2025, which revealed the interplay between the millions of technical documents held by standards development organisations (SDOs) for developing new standards and the tens of millions of patent documents published by patent offices. This initial study showed the increasing use that EPO patent examiners make of SDO documents when considering the patentability of inventions in patent applications. It was also found that some 37% of declared SEPs cited at least one SDO document. Further, from a cohort of 125 143 patent applications where SDO documents were cited or that were ultimately declared SEPs, a high proportion (17.4%, ca. 21 833) both cited SDO documents and were declared SEPs.
EPO Patent Standards Explorer to become more accessible and user friendly
The May 2025 study was launched together with the Patent Standards Explorer, which contains the full SDO document dataset. Later in 2026, this tool will evolve into an interactive web page, significantly enhancing accessibility, exploration and usability for users.
