EPO FRAND valuation study identifies comparable licenses as dominant legal method

This study clarifies the fragmented legal landscape for streaming technology providers navigating standard essential patent disputes. By identifying comparable licenses as the dominant benchmark, the findings suggest that historical market rates will continue to dictate costs for video codecs and connectivity standards, even when those rates are opaque. For the broader ecosystem, the distinction between U.S. apportionment and European injunctive relief means global streaming platforms must maintain bifurcated legal strategies to manage patent risk across jurisdictions. As market fragmentation persists, watch for whether future UK or EU decisions adopt the U.S. requirement to strictly separate patented technical contributions from the value added by industry-wide adoption of a standard.

The European Patent Office's FRAND study arrives amid an intensifying wave of standard essential patent litigation involving companies central to streaming infrastructure. In 2025, InterDigital and Lenovo resolved their long-running patent dispute after multiple jurisdictional rulings that spanned the UK, France, and China, establishing cross-border royalty benchmarks for video codec patents used in connected devices. That settlement followed years of parallel proceedings and reinforced the comparable-license methodology the EPO study now identifies as dominant. Meanwhile, Ericsson and D-Link reached a global licensing agreement covering Wi-Fi standard essential patents in early 2025, adding another data point to the pool of comparable licenses courts will reference when setting FRAND rates for connectivity standards that underpin streaming delivery.

On the regulatory and business front, the EPO study lands as the European Commission continues to deliberate on its proposed SEP Regulation, which would introduce a mandatory transparency register and essentiality checks before patent holders can seek injunctions. The Commission's draft regulation has drawn opposition from major patent holders including Ericsson and InterDigital, who argue the framework would weaken enforcement leverage and depress royalty rates below market levels. The study's finding that European courts rely more heavily on injunctive relief than U.S. courts directly informs this policy debate: if the regulation passes, the European approach to FRAND enforcement that the EPO documents could shift toward a more U.S.-style damages model. Cisco has also weighed in on FRAND policy, advocating for balanced licensing terms that prevent hold-up while preserving incentives for standards contributors.

Technical and methodological benchmarks from recent case law further contextualize the EPO findings. Birss J's ruling in InterDigital v. Lenovo at the UK High Court established a global FRAND rate using a comparable-license approach that weighted existing agreements more heavily than top-down analysis, a methodology the EPO study now confirms as the prevailing judicial preference. Enrico Bonadio and co-authors published analysis in 2025 examining how courts in different jurisdictions apply top-down methodologies to SEP portfolios, finding that top-down rates vary by a factor of three or more depending on the assumed aggregate royalty burden, which underscores why courts default to comparable licenses when available. UK Supreme Court confirms jurisdiction over InterDigital Avanci 5G FRAND rates and CSIRO's patent licensing program for Wi-Fi standards, which generated significant revenue through litigation and settlements with major device manufacturers, provides another comparable-license data point that courts may reference in future FRAND determinations affecting streaming connectivity patents.