English Court of Appeal backs arbitration for global RAND determination in SEP dispute

The Court of Appeal has confirmed that an SEP owner can, in appropriate circumstances, offer an immediate license under which final RAND terms are determined by arbitration, potentially providing a single mechanism for resolving global licensing terms.

The English Court of Appeal has provided an important clarification of the role arbitration can play in global standard-essential patent (SEP) licensing disputes, holding that a particular arbitration-based licensing proposal made by Nokia was capable of satisfying its RAND obligations.

The decision in Acer Incorporated & Anor v. Nokia Technologies OY [2026] EWCA Civ 564 concerned Nokia’s video codec SEP portfolio and offers made to Acer and ASUS under which they could take immediate licenses, with the final terms to be adjusted following determination of RAND terms by an arbitral tribunal.

The Court held that Nokia’s offers were offers of licenses on RAND terms capable of acceptance. Acer and ASUS therefore could not reject those offers and at the same time rely on the English courts’ declaratory jurisdiction to determine alternative RAND terms. The Court consequently allowed Nokia’s appeal against the refusal to grant a case management stay of the English RAND proceedings.

The judgment could have wider implications for the increasingly complex relationship between national patent litigation, global SEP licensing, and arbitration.

Nokia’s global SEP dispute

Nokia owns a portfolio of SEPs declared essential to the ITU-T H.264/AVC and H.265/HEVC video standards. Acer and ASUS brought claims in the English Patents Court seeking, among other relief, determination of the RAND terms for licenses to Nokia’s codec SEP portfolio. Both companies gave undertakings to enter into any license determined to be RAND.

The dispute was taking place against the backdrop of parallel patent litigation in several jurisdictions. Nokia had commenced infringement proceedings involving the portfolio in Germany, the territory covered by the Unified Patent Court, the United States, Brazil, and India.

Nokia subsequently made what the Court called its “Adjustable Licence Offers.” These provided Acer and ASUS with immediate interim licenses, with the terms subject to adjustment once an arbitral tribunal determined the terms of the final RAND licenses.

Nokia proposed arbitration under the rules of the International Chamber of Commerce (ICC). It was also prepared to allow the parties to select the seat of the arbitration, subject to certain conditions, and proposed a three-member tribunal. Nokia offered to provide early disclosure of comparable licenses and subsequently proposed that the arbitrators publish a non-confidential summary of the principal points decided and the overall valuation approach.

Acer and ASUS did not make a counterproposal for a different form of arbitration.

Court of Appeal overturns High Court approach

The High Court had rejected Nokia’s position, concluding that the Adjustable Licence Offers did not themselves constitute offers of RAND licenses capable of acceptance. Instead, the High Court considered them to be offers to enter into arbitration, with a RAND license only becoming available after the arbitration.

The Court of Appeal took a different approach. Lord Justice Arnold, giving the leading judgment, distinguished between the immediate interim license and the mechanism for determining the final terms. The immediate license was capable of acceptance and protected Acer and ASUS from the prospect of exclusion from markets while the dispute over the final terms was resolved.

The fact that the final terms would be determined by arbitration did not prevent the offer from being a RAND offer. The Court reasoned that Nokia was offering an immediate license on whatever terms the arbitral tribunal ultimately determined to be RAND. The Court also rejected the argument that the absence of an arbitration clause in Nokia’s ITU-T undertaking necessarily prevented this approach.

It acknowledged that arbitration is fundamentally consensual. However, in the circumstances of this case, the Adjustable Licence Offers did not compel Acer and ASUS to arbitrate. Rather, they presented the companies with a choice: accept the proposed RAND license, including its arbitration mechanism, or reject it. If they rejected the offer, the consequence was that they could not rely on the English courts’ declaratory jurisdiction to obtain a different RAND determination.

Potential global role for arbitration

The Court expressly recognized the potential advantages of arbitration in global RAND disputes. It noted that arbitration can provide a mechanism for resolving the terms of a global license before a single tribunal with global jurisdiction, with an award potentially enforceable under the New York Convention.

That contrasts with the position of a national court, which will generally enforce its determination through orders whose effect is territorially limited. The Court identified this as potentially reducing the risk of jurisdictional conflict that has featured prominently in recent global SEP litigation. The distinction is particularly significant in disputes involving portfolios covering patents in multiple jurisdictions.

A national court may be asked to determine the terms of a global license, but enforcement of its orders can raise difficult questions about territorial jurisdiction and competing proceedings. Arbitration potentially offers a single decision-making forum and an award capable of recognition and enforcement across jurisdictions under the New York Convention. The Court nevertheless stopped short of suggesting that arbitration is now the standard mechanism for global RAND disputes.

It expressly observed that there is no settled industry practice for (F)RAND disputes to be determined by arbitration. It also left open the question of what would happen where an implementer had a legitimate and substantiated objection to a SEP owner’s proposal for arbitration.

Transparency remains an issue

The judgment also addressed concerns about the transparency of arbitral proceedings.

The High Court had criticized arbitration as a mechanism for determining RAND terms partly because of potential transparency concerns. The Court of Appeal noted that the ICC Rules do not contain an automatic or default requirement for confidentiality, leaving the issue to the arbitrators. Lord Justice Arnold said he saw no reason why an arbitral tribunal determining RAND terms should not publish its award, subject to redaction of genuinely confidential information, in a manner comparable to an English court.

Nokia had already proposed publishing a non-confidential summary of the principal points in its award and its overall approach to valuation, although the Court indicated that it would be preferable to go further.

A significant limitation

The Court’s ruling does not give SEP owners an unrestricted ability to impose arbitration on every aspect of a licensing dispute. This became particularly clear in the Court’s consequential judgment of May 18, 2026. A disputed term in Nokia’s Adjustable Licence Offers would have required the parties to stay, withdraw or abandon litigation concerning certain other patents and could have brought disputes concerning Acer and ASUS’s own SEP portfolios within the arbitration.

The Court held that this term was not RAND. The reasoning was important: if a SEP owner has a choice between arbitration and court determination for disputes concerning its own SEPs, that choice also belongs to the owner of the other SEPs. Nokia could not use its RAND obligation in relation to its own portfolio to compel Acer and ASUS to arbitrate disputes concerning their separate patent portfolios.

The Court therefore made the case management stay conditional on removal of the disputed term.

Implications for SEP licensing

The decisions provide SEP owners and implementers with an important new point to consider when structuring global licensing negotiations.

For SEP owners, the case demonstrates that an arbitration-based mechanism can, in the right circumstances, form part of a RAND-compliant licensing offer. The Court’s reasoning also confirms that an SEP owner is entitled to choose the forum it considers best suited to its interests, although the precise consequences of that choice will depend on the circumstances of the dispute. For implementers, Acer v. Nokia demonstrates that refusing an arbitration-based RAND offer can have consequences for their ability to pursue an alternative judicial determination in England.

The decision does not, however, mean that an implementer must accept any proposal labeled “arbitration” or “RAND.” The Court specifically left open the position where an implementer has a legitimate and substantiated objection to the proposed arbitral process.

The case also leaves important questions for future disputes, including how courts in other jurisdictions will respond to arbitration-based RAND offers and how arbitral determinations will interact with parallel infringement and validity proceedings.

From national litigation to global licensing

The Court of Appeal’s judgment does not eliminate national patent litigation. Questions of patent validity, infringement, and other matters remain subject to the jurisdiction of the relevant courts. What Acer v. Nokia does demonstrate is that the mechanism for determining the commercial terms of a global SEP license need not necessarily be a national court.

In this case, the Court accepted that an immediate RAND license incorporating ICC arbitration could satisfy Nokia’s obligation and provide a route toward determination of global licensing terms by a single arbitral tribunal. For parties involved in multinational SEP disputes, the decision therefore adds another significant consideration to licensing strategy: not simply where patent rights will be litigated, but which forum should determine the terms of the global license.

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