Standard-essential patent (SEP) licensing remains a critical issue in Europe, where political bodies and national courts at times diverge in the interpretation of fair, reasonable, and non-discriminatory (FRAND) licensing requirements. A notable decision from the Munich Higher Regional Court in VoiceAge EVS v. HMD, announced on March 20, 20251, underscores German courts’ approach to FRAND defenses, particularly in Munich, where implementers have often failed to prevail on such defenses. The ruling highlights the court’s requirement that implementers provide sufficient security matching the SEP owner’s position to be considered for a FRAND defense.
In 2019, VoiceAge sued HMD over five patents, including EP 2 102 619, covering the EVS speech-coding standard. On May 25, 2022, the Munich I Regional Court found patent infringement and rejected HMD’s FRAND defense. HMD appealed, and following a hearing on October 31, 2024, the Munich Higher Regional Court affirmed the lower court’s findings on March 20, 2025.
In its March 20, 2025, decision, the Munich Higher Regional Court ruled that HMD’s unwillingness to provide sufficient collateral matching VoiceAge’s royalty demand disqualified its FRAND defense, obviating the need to evaluate the FRAND compliance of VoiceAge’s offer. This security-centric approach differs from the Court of Justice of the European Union approach outlined in Huawei v. ZTE,2 which prioritizes balanced, step-by-step negotiations.3 The court, however, did acknowledge unresolved questions, including whether a FRAND analysis should hinge on collateral and how a defendant’s willingness to license should be assessed. It thus granted leave to appeal those issues to the Bundesgerichtshof (Federal Court of Justice), Germany’s top patent court, due to their fundamental importance.
Takeaways
As the issue progresses through appeals, implementers negotiating SEP licenses must heed Munich’s stringent FRAND requirements, including offering sufficient collateral matching the SEP owner’s demand to secure a full judicial FRAND review. In this evolving landscape, both SEP implementers and owners must navigate a reality in which security, rather than just negotiation conduct, may increasingly shape outcomes.
