The Chongqing First Intermediate People’s Court has issued a first instance judgment in the case filed by OPPO against Nokia over royalties for standard essential patents (SEPs). This landmark decision confirmed global fair, reasonable, and non-discriminatory (FRAND) licensing rates for Nokia’s portfolio of 2G, 3G, 4G and 5G SEPs, and is the first Chinese court decision setting global FRAND rates and the first to address 5G SEP rates.
While confidential data was redacted in the publicly announced decision, the key conclusions are clear. Specifically, the court determined FRAND royalties per handset for:
5G multi-mode mobile phone single unit licence fee:
- First Territory: USD 1.151
- Second Territory (including Mainland China) and Third Territory (other countries): USD 0.707
Single unit licence fee for 4G multi-mode handsets:
- First Territory: USD 0.777
- Second Territory (including Mainland China) and Third Territory (other countries): USD 0.477
The court rulings are much lower than Nokia’s proposed uniform rate of EUR 3/unit for 5G patent licensing.
Additionally, the Chinese court affirmed OPPO’s claim on a global cumulative royalty range of 4.341% to 5.273% for the handset sector implementing 5G SEP technologies. Relative patent value distribution across generations was set at 50:40:5:5 for 5G:4G:3G:2G.
Since the beginning of the dispute in July 2021, Nokia and OPPO have engaged in infringement litigation, rate determinations and patent invalidations across Germany, UK, France, Finland, Sweden, India, Indonesia, and China. Previously, Nokia had filed a jurisdictional challenge as to whether Chinese courts have jurisdiction over global FRAND rates for SEPs. After the China’s Supreme People’s Court hearing, it finally rejected Nokia’s jurisdictional objection and confirmed the jurisdiction of Chinese courts over global FRAND cases.
This is the first Chinese court decision setting global FRAND rates and the first Chinese decision to address specifically 5G SEP rates. OPPO has issued a statement expressing its willingness to comply with and implement the global FRAND royalty rates determined by the court for Nokia patents. OPPO also stated that it hopes to resolve the patent royalty dispute with Nokia and expects Nokia to comply with the court decision. As of publication, there has been no response from Nokia.
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