On August 13, 2026, the Seventh Civil Chamber of the Munich Regional Court issued a 67-page set of FRAND guidelines, systematically summarizing the reasoning behind four significant SEP rulings heard by the chamber this year: Wilus v. ASUS, Nokia v. ASUS, Broadcom v. Renault, and ZTE v. Samsung.
Presiding Judge Oliver Schön stated that this move aims to address divergent interpretations of review methods in practice, provide parties with clearer expectations regarding litigation, and lay a solid factual foundation for the Chamber’s future rulings. Although the guidelines are internal working guidelines, their specific content and clear stance are expected to further solidify Munich’s position as the preferred venue for global SEP litigation.
In the introduction, the guidelines rank global SEP jurisdictions: Germany and the Unified Patent Court hold a dominant position, while the United Kingdom and Brazil play only a supplementary or auxiliary role; the status of Chinese courts remains to be seen but is expected to grow in importance. The panel criticized the European Commission’s amicus curiae brief submitted in the VoiceAge v. HMD appeal for “placing excessive emphasis on consumer interests and failing to treat the arguments of both parties equitably,” thereby missing an opportunity to provide constructive input to the SEP/FRAND discussion.
1. Two-Stage “Willingness” Test
The most significant change in the guidelines is the breakdown of the licensee’s “willingness to license” into two tiers:
External Will (Procedural): The implementer must not engage in manifestly dilatory conduct and must continue to pay the undisputed portion of the license fee (typically its own final offer). If the implementer’s offer is less than 60% of the patent holder’s demand and the difference exceeds $10 million, the implementer must provide a security deposit equivalent to one year’s worth of the patent holder’s demand. If the implementer has initiated a rate determination proceeding in another country, the security deposit must be based on the ruling of that foreign court or the amount requested by the implementer itself.
Internal Willingness (Substantive): Only after passing the external review will the court conduct a substantive review to determine whether the patent holder’s offer falls within the FRAND range. The panel clarified that the scope of this review is equivalent to rate determinations by the High Court of England and Wales or Chinese courts, but rejected the introduction of expert witnesses, holding that the rate is a legal issue rather than a factual one.
2. Calculation of the FRAND Rate
Regarding how to determine the FRAND rate, the guidelines establish a clear hierarchy of priority:
The primary tool is comparable licensing agreements. Such agreements must not be older than five years, and multi-standard licenses and cross-licenses generally do not qualify as valid comparators.
The panel takes the median value from comparable agreements and sets the FRAND range at “the median ±50%.” If a directly comparable agreement exists, the patent holder may increase the rate by up to 15% based on that agreement’s rate, but such increases may not be stacked multiple times.
Validation is conducted using a top-down approach. The unit price for mobile phone standardization is set at $170, with a cumulative 5G licensing burden of 8% ($13.60 per unit). After combining mobile, Wi-Fi, and streaming services, the total burden is approximately 18% ($30.60 per unit). If the results from comparable agreements are significantly higher than the validated values, a re-examination is required.
3. Uniform 15% Discount on Chinese Patent Portfolios
The most notable rule in the guidelines is that judges presume “artificial inflation” in the patent portfolios of Chinese companies, on the grounds that past financial incentive policies for patent applications in China have distorted the relationship between portfolio size and actual innovative contributions. Therefore, in future proceedings, a uniform 15% discount will be applied to Chinese patent portfolios, without corresponding upward adjustments to portfolios from other countries. The panel even applied this rule retroactively to the ZTE v. Samsung case. Although the final award remained within the FRAND range proposed by ZTE, the total one-time license fee was reduced from $640 million to $550 million, and the FRAND ceiling was lowered from $798.6 million to $678.8 million.
4. Regarding Streaming Service Rates
For streaming services, the court provided reference monthly license fees: approximately 0.63 euros for a standard Netflix subscription, approximately 0.49 euros for Disney+, and 1.05 euros and 0.84 euros, respectively, for premium subscriptions; however, it explicitly stated that these figures are not binding. The court also held that patent exhaustion does not apply to streaming service providers, as the provision of playback functionality by a device constitutes a different form of use from the provision of the service itself.
On the procedural front, the court had considered introducing a “safe harbor” mechanism, whereby implementers could be exempt from injunctions if they agreed to binding arbitration. However, this proposal was ultimately rejected due to the potential for abuse and harm to the interests of patent holders. Instead, parties may apply for an early “FRAND Priority” hearing, with written submissions limited to 25 pages. Furthermore, the court noted that the Patent Mediation and Arbitration Center, established in June 2026, did not bring about any substantive changes, as existing mediation and arbitration channels were already in place.
5. Regarding the Avanci Patent Pool
Regarding the Avanci 5G patent pool’s demand of $32 per vehicle, the court held that this rate withstands the top-down test. Notably, the court found that, given the longer service life of automobiles, a rate of $36.72 per vehicle would be closer to a FRAND rate, implying that the patent pool has not yet exhausted its licensing potential.
Regarding “past use” prior to the signing of a licensing agreement, the court has adopted a stricter stance since 2015, holding that implementers should have been aware of their licensing obligations from that point onward. Whether to waive recourse is a commercial decision of the patent holder, subject only to the doctrine of abuse of rights.
The Munich Regional Court registered 332 new patent cases last year, and the Seventh Chamber anticipates handling 40 to 50 SEP cases annually. These guidelines will undoubtedly further solidify the court’s status as the “preferred venue” for global SEP litigation. However, it remains to be seen whether practices outlined in the guidelines—such as the presumption of a discount and the exclusion of expert evidence—will be upheld on appeal, and whether implementers will consequently turn to other courts.
