(2026). Third-Party Determination of Interim Licenses and Security Payments: A German Approach to the Huawei Framework.
Litigation of Standard Essential Patents (SEPs) takes place in Europe within the framework provided by the CJEU in its landmark decision Huawei v. ZTE. However, Courts in Europe are still struggling to find the best approach for the resolution of these disputes. German courts and the UPC rely on competition law and a determination of whether the parties have been willing to conclude a license. British courts focus on the setting of license terms but their approach is not entirely convincing, either. This article shows an alternative way forward based on instruments from German civil law that use third-party determination of contract terms. It combines these instruments with a preliminary calculation of a security and down-payments to provide parties with an interest-oriented way forward. The proposed third-party determination of FRAND terms is deliberately not a final determination but limited to the interim period before a final agreement. This preserves the autonomy of the parties while supporting them in the settlement process and it does not affect the right to be heard in court. Moreover, the obligation to demonstrate willingness to grant or take a license entails the necessity not to reject the other party's proposal for a third-party determination for the interim period. And in infringement proceedings it increases the pressure to negotiate constructively to reach a FRAND compliant agreement. While the method is based on German civil law, it is transferable to other legal systems and can be equally applied in the Unified Patent Court.
