SEP Licensing in 2025: What Implementers and Patent Holders Need to Know

Every smartphone, Wi-Fi router, connected car, and IoT device on the market implements one or more technical standards — 4G, 5G, Wi-Fi 6, Bluetooth, USB-C, HEVC. Those standards are protected by standard essential patents (SEPs): patents whose claims cover technology that is, by definition, required to implement the standard. You cannot build a standards-compliant product without using them.

That creates an unavoidable licensing relationship between two parties with opposing interests. SEP holders — large technology companies like Qualcomm, Nokia, Ericsson, InterDigital, and Huawei — spent decades and billions of dollars developing the technology underlying these standards. Implementers — the device manufacturers, automotive OEMs, and connected hardware companies that build standards-compliant products — need access to that technology to ship anything. The price of that access is what FRAND litigation is about.

In 2025, the landscape that governs these negotiations is more complex, and in some ways more contested, than at any point in the past decade. Three overlapping developments are reshaping how SEP licensing negotiations happen and what leverage each side brings to the table: the EU's proposed SEP Regulation, the Unified Patent Court's emerging case law, and a widening US/China divergence in how courts approach FRAND rate-setting. Understanding each is now table stakes for anyone entering a SEP licensing negotiation.

What Are SEPs and Why Does Licensing Matter?

A standard essential patent is a patent that a standards body — the 3GPP for cellular, the IEEE for Wi-Fi, the Bluetooth SIG for Bluetooth — has determined is essential to implement a published standard. "Essential" has a precise meaning: the claim covers technology that cannot be designed around without violating the standard. You either use it, or your product does not comply.

Because the standard creates an unavoidable monopoly on the patented technology, the major standards bodies require SEP holders to commit — at the time they contribute technology to a standard — to license their SEPs on Fair, Reasonable, and Non-Discriminatory (FRAND) terms. This commitment is the bedrock of the entire licensing system. Without it, a single SEP holder could demand any royalty they chose and block all non-licensees from selling compliant products.

The problem is that "FRAND" is not a number. It is a contractual commitment to offer terms within a range of what is fair and reasonable, without discriminating between similarly situated licensees. What rate falls within that range is a factual question that, when parties cannot agree, courts must resolve. The body of court decisions setting FRAND rates is growing — but rates still vary significantly by jurisdiction, technology, and portfolio composition.

FRAND Obligations: What Each Side Must Do

The Huawei v ZTE (CJEU, 2015) decision remains the foundational framework for FRAND negotiations in Europe, and its influence extends globally as a behavioral template. It establishes a sequential set of duties on both sides.

SEP holders must:

• Alert the implementer of the alleged infringement before seeking an injunction, identifying the specific SEPs and the manner in which they are allegedly infringed.
• Make a written FRAND licensing offer, specifying the royalty rate and calculation method, after the implementer expresses willingness to take a license.
• Respond promptly and in good faith to counter-offers from the implementer.
• Not seek an injunction while good-faith licensing negotiations are underway — unless the implementer is acting in bad faith or is clearly dilatory.

Implementers must:

• Respond to the SEP holder's notice with a clear expression of willingness to take a FRAND license.
• Engage diligently and in good faith in negotiations — not use the negotiation process to delay while continuing to infringe.
• Submit a written counter-offer if they reject the SEP holder's offer, with the counter-offer also meeting the FRAND standard.
• Provide appropriate security (escrow, bank guarantee) pending final rate determination, if an injunction is to be avoided.

Failure by either party to follow this framework can shift leverage dramatically. An implementer who refuses to engage seriously — or who simply continues selling infringing products without making any licensing effort — risks being found not to be a "willing licensee," which is the trigger for injunctive relief under both Huawei v ZTE and the UPC's first enforcement ruling in Panasonic v Oppo (2024).

Key 2025 Developments

1. The EU SEP Regulation: Stalled but Still Alive

The European Commission's proposed SEP Regulation — which would introduce mandatory essentiality checks, a FRAND royalty determination procedure, and a central SEP register administered by the EUIPO — has been one of the most contested IP legislative proposals in EU history. It was first tabled in 2023. As of April 2026, it has not entered into force.

The proposal stalled in Council and European Parliament negotiations over several core disputes: who pays for mandatory essentiality checks, how the EUIPO's conciliation procedure interacts with court proceedings, and whether the regulation should apply to declared SEPs or only to patents that have passed an independent essentiality check. Industry opposition has been substantial, particularly from Ericsson, Nokia, and Qualcomm, who argue that the proposal undermines FRAND licensing without meaningfully improving implementer access to technology.

What matters for practitioners is what the regulatory uncertainty itself does to negotiations. SEP holders are negotiating harder on current terms, anticipating that a future regulation might constrain rates. Implementers are sometimes using the uncertainty as a reason to delay signing licenses — hoping a regulatory outcome improves their position. Both strategies carry risk. Negotiations conducted in bad faith during this period still create exposure under Huawei v ZTE and UPC case law.

2. The UPC's Emerging Enforcement Posture

The Unified Patent Court opened in June 2023 and is already reshaping the leverage calculus in European SEP negotiations. Its first significant SEP ruling — Panasonic v Oppo (2024) — confirmed that the UPC will grant pan-European injunctions where implementers fail to behave as willing licensees, without waiting for a full FRAND rate determination.

For implementers, this means that a single adverse UPC ruling can now block product sales across 17+ EU member states simultaneously. The national-proceedings era, where a loss in Germany only blocked Germany, is over for European patents. We covered this in detail in our piece on how the UPC is reshaping FRAND rate-setting in Europe.

The UPC's first full FRAND rate-setting trial is expected to conclude in the 2025–2026 window. When it does, it will establish European precedent on FRAND methodology — whether the court prefers comparable licenses, top-down aggregate royalty approaches, or some hybrid — that will define negotiations for years.

3. US/China Divergence

The US Federal Circuit has continued to refine the comparable licenses approach established in Ericsson v D-Link (2014), while pushing back on royalty stacking theories and "holdup" arguments. The US SEP environment in 2025 is characterized by relatively high transactional costs (discovery-intensive litigation) but relatively predictable outcomes: courts set rates based on actual comparable licenses, adjusted for portfolio strength and technical contribution.

China has moved sharply in the opposite direction. Chinese courts — particularly the Guangdong High Court and the Supreme People's Court — have demonstrated willingness to set global FRAND rates for Chinese implementers, in some cases issuing anti-suit injunctions to block foreign proceedings. The Huawei v Conversant and Sharp v Oppo lines of cases established that Chinese courts will adjudicate global SEP portfolio rates covering technology practiced worldwide, creating direct conflict with US and UK jurisdiction claims.

For implementers with Chinese manufacturing or sales operations — which includes most major consumer electronics OEMs — this creates real forum selection complexity. A favorable Chinese rate determination may be challenged or ignored in Western courts. A Western court rate determination may be blocked by Chinese anti-suit injunctions. Multi-jurisdictional SEP negotiations in 2025 require coordination across all active forums simultaneously.

Pre-Negotiation Checklist for Implementers

The moment a SEP holder sends a licensing notice, a legal clock starts. Your response — or failure to respond — within the first few weeks shapes how courts will later characterize your conduct as a willing or unwilling licensee. The following checklist covers what implementers should do before entering formal FRAND negotiations.

How PatentPulse Tracks SEP Licensing Developments

The information advantage in SEP licensing negotiations belongs to whoever knows what rates courts have actually set, what methodologies different jurisdictions favor, and which cases are actively moving through the docket. Building and maintaining that knowledge base manually — reading every UPC filing, every Federal Circuit decision, every Chinese SPC ruling — is a full-time job.

PatentPulse automates it. The platform monitors court filings and published decisions across the US, UK, Germany, France, the UPC, China, India, South Korea, and two additional jurisdictions — updating the database daily as new decisions are published. Every landmark decision is tagged by jurisdiction, technology standard, royalty methodology, and rate outcome.

For anyone entering a FRAND negotiation in 2025, knowing what rates courts have set across comparable portfolios is no longer optional — it is the starting point for any credible counter-offer. PatentPulse makes that data available in a searchable dashboard, without requiring hours of manual research before every negotiation session.