International arbitration emerges as key mechanism for standard-essential patent licensing

Standard-essential patent (SEP) disputes highlight a clash between nationally granted patent rights and the globally interoperable technology market. Because standards such as Wi‑Fi, 5G, USB and Bluetooth incorporate patented technology, a licensing clash can trigger parallel infringement and FRAND (fair, reasonable and non‑discriminatory) proceedings in multiple jurisdictions.

Arbitration is being promoted as a way to resolve these disputes in a single, specialist forum. It allows parties to present an international SEP portfolio to one tribunal, select experts with legal, technical and economic expertise, keep sensitive licensing evidence confidential, and potentially set worldwide licence terms without litigating each national patent separately. However, arbitration depends on the parties’ consent, its awards bind only the parties, and its private nature raises concerns about the non‑discriminatory purpose of FRAND licensing. Issues of patent validity, competition law, transparency and enforceability also complicate the process.

Recent developments include the World Intellectual Property Organization (WIPO) and the Unified Patent Court’s Patent Mediation and Arbitration Centre designing procedures tailored to FRAND disputes, and a decision by the Court of Appeal of England and Wales on whether an SEP owner can meet licensing obligations by offering an interim licence whose final terms are settled in arbitration, as illustrated by the Acer v Nokia case.