SEPs/FRAND Disputes | Patent Mediation and Arbitration Centre of the Unified Patent Court (PMAC)

Inclusion of dedicated FRAND provisions in the PMAC Rules is a unique feature that distinguishes the PMAC from other ADR providers, and makes it particularly attractive as worldwide forum for SEPs/FRAND disputes.

Considering that disputes involving SEPs are often highly complex and may include global cross-border litigation in different jurisdictions, the PMAC Rules have been designed to assist the parties to define the scope of the FRAND disputes to be submitted to ADR.

Advantages of using the PMAC Rules

Parties may benefit from ADR Information Sessions to explore ADR possibilities offered by the PMAC. The Information Sessions are confidential and free of charge.

Cross-border disputes can be resolved in one forum

Parties can choose the appropriate proceedings for resolution of their dispute (arbitration, mediation, expert determination, or other forms of ADR e.g., early neutral evaluation) and tailor them to their specific circumstances

PMAC Rules contain special provisions regarding the Scope of FRAND

Expedited proceedings are available in mediation and arbitration. Parties may appoint an Emergency Arbitrator

Mediation proceedings are suitable for cases when implementers avoid paying royalties to settle for sub-optimal FRAND rates (patent holdout)

Online proceedings

FRAND Model Clauses available including multi-tiered dispute resolution clauses: Med-Arb, Arbitration and Expert Determination, Mediation-Expert Determination

The parties can select an experienced expert from the PMAC’s list of accredited neutrals specialized in SEPs/FRAND-related topics, making the selection not only convenient but also reliable

PMAC Guidelines for FRAND disputes

Parties may benefit from attractive discounts

when parties refer the case from the UPC litigation to the PMAC, they are only required to pay 50% of the Registration Fee
SMEs and natural persons are only required to pay 50% of the Registration and Administrative Fees
the parties are required to pay 50% of the Administrative Fee if proceedings are conducted online

Expert Determination in FRAND disputes

Expert determination is specifically attractive for SEPs/FRAND disputes because it can include essentiality assessment of alleged SEPs and/or assessment of FRAND terms. By providing specific guidance on modalities and procedural details on SEP and FRAND disputes in expert determination, the PMAC offers a unique feature to parties willing to have an expert decision.

Advantages of Expert Determination in SEPs/FRAND disputes

It can be used in pending proceedings at the UPC or PMAC e.g., in mediation and arbitration. The Expert in patent disputes renders a decision on a specific issue of the dispute

Technical aspects can be assessed (also with the help of a neutral who has technical skills)

The outcome of the determination is binding on the parties, unless they agree otherwise

The parties are able to select an expert from the PMAC’s list of accredited neutrals specialized in SEPs/FRAND-related topics, making the selection not only convenient but also reliable

The Expert may also, following consultation with the Parties, invite a competent institution with special skills and knowledge in the field of patents and standards to provide an expert opinion

Is Expert Determination in SEPs/FRAND disputes limited to essentiality assessment of SEPs and FRAND terms?

All FRAND provisions in the PMAC Rules are of a facultative and exemplary nature. The determination may also include the following:

whether any optional and/or alternative portions of the standard or technical specification are to be assessed
whether any claim charts are to be submitted
whether a specific confidentiality regime needs to be applied
whether any optional and/or alternative portions of the standard or technical specification are to be assessed
whether any claim charts are to be submitted
whether a specific confidentiality regime needs to be applied

Our SEPs/FRAND Arbitration process

1 - ADR Information Session

Conducted by the selected Neutral in the presence of the parties and/or their representative(s), having authority to negotiate and conclude a mediated Settlement Agreement. If all the parties to a dispute agree to attend the ADR information session, the Centre will select a Neutral. During or after the ADR information session, the parties may agree to refer their dispute to appropriate ADR proceedings.

2 - Filing a request

Filing a request (unilateral or joint) for Arbitration or expedited arbitration under the PMAC Rules of Arbitration. The parties may submit a “Arbitration Agreement” in the form of arbitration clause or another contract. Parties may decide to apply Guidelines for FRAND disputes in accordance with article 48 of the PMAC Rules of Arbitration.

3 - Agreement

The parties agree on the number of arbitrator(s): a sole or three arbitrator(s). The Centre may decide, having regard on the complexity and the amount of the dispute, on the number of arbitrators. If the parties do not agree on the nominations of arbitrators, the Centre may appoint them.

4 - Language of proceedings, applicable law, and seat of arbitration

The parties agree on the language of the proceedings, the applicable law, and the seat of arbitration. If the parties do not reach an agreement, the Tribunal may decide on the language of the proceedings, the applicable law, and the seat of arbitration

5 - Prior to case management conference

Prior to the case management conference, the parties may decide on the matter to be addressed in arbitration. This may involve:

(identifying the SEP(s) relating to the license declaration to Standard-setting organization and list of standards in dispute) or (other patents concerned)
(identifying one or more patents which may serve as representative samples from the relevant patent portfolio(s), on which the arbitration will primarily focus, in which case the parties may agree on the sampling criteria)
(any patents that might be subject to cross-licensing)
(identifying the claims and defences)
(the determination of selected licensing terms and conditions)
(the determination on a temporary basis of any selected licensing terms pending determination of final licensing terms by the Tribunal or a competent court)
(the determination of the scope of the royalty base and range, including the territorial scope of the license)
(the determination of the scope of the royalty base and range, including the territorial scope of the license)
(the methodology for calculating FRAND terms, including the royalty rate)
(the potential necessity for an application for an order to the Tribunal or a competent court, such as an application for an order to produce evidence or an order concerning confidentiality)

6 - Case management conference

Case management conference – Definition of procedural rules and key issues. The tribunal may issue a procedural order regarding the Scope of FRAND disputes in arbitration, including confidentiality agreements.

7 - Evidence & hearings

Presentation of arguments and confidential evidence.

8 - Settlement agreement

If an agreement is reached between the parties, the parties may request the tribunal to issue a consent award. Consent awards are enforceable in all UPC CMS.

9 - Final Award

Parties may enforce the award internationally in member states of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

SEPs / FRAND Disputes