UK sets out targeted plans to improve transparency and early dispute resolution in SEP ecosystem

Pinsent Masons patent experts Mark Marfé and Sarah Taylor were commenting after the UK government published its response to its consultation on SEPs.

The consultation, launched in July 2025, aimed to promote innovation in the UK and focused on looking at how the SEP ecosystem in the UK can operate more effectively and transparently to support UK businesses in the fair, reasonable and non-discriminatory (FRAND) licensing process for use of standardised technologies. The overarching aim was to enable implementers, especially small and medium sized enterprises (SMEs) to navigate FRAND licensing more easily.

The response follows extensive debate between SEP owners and implementers over whether reform is necessary and, if so, what form it should take.

“The response indicates that targeted, earlier intervention is preferred over wholesale reform of the approach to SEPs in the UK,” said Taylor “That the UK government has indicated in the response that intervention must be evidence led is to be welcomed, although at this stage the proposals lack detail so further debate over their feasibility is expected.”

SEPs protect technologies that are considered essential to implementing technical standards, such as those used in mobile communications and connected devices. Businesses seeking to use those standards must typically obtain licences on FRAND terms. As the use of standardised technologies has expanded beyond traditional telecommunications markets into sectors such as streaming services, the internet of things (IoT), energy, infrastructure and manufacturing, questions around how the FRAND system operates have become increasingly important.

The consultation aimed to address these issues, having proposed a wide range of interventions including a specialist, dedicated FRAND rate determination track (RDT) within the Intellectual Property Enterprise Court (IPEC), mandated disclosure of SEPs to support a centralised searchable database, and potential legislative change to limit the availability of injunctions in FRAND disputes.

In its response, the government acknowledged concerns raised in some responses during the consultation regarding information asymmetries, the expense and complexity of negotiations, and the difficulty some businesses, particularly SMEs, face when navigating SEP licensing. However, it also recognised the importance of preserving incentives for innovation and avoiding interventions that could create further uncertainty.

After evaluating the responses from a broad range of stakeholders, the government determined that the evidence did not support the more wide-ranging interventionalist proposals set out in its original consultation.  Instead, the response outlines a revised approach, consisting of a package of seven measures which the government said are intended to make SEP licensing more transparent, predictable and accessible while remaining proportionate and aligned with international developments.

While the idea of creating a dedicated FRAND RDT within IPEC has been abandoned, the government plans to explore a “court anchored early FRAND determination” process. If adopted, this would not create a new standalone rate-setting forum. Instead, it could build on the courts’ existing case-management powers to introduce a clearer procedural pathway for SEP/FRAND cases once a claim has been issued. The courts of England and Wales already have broad case management powers to provide an early indication of FRAND terms with the aim of encouraging earlier settlement and reducing litigation costs.

The government also intends to explore the development of FRAND licensing guidelines and a potential UK Intellectual Property Office (UKIPO) led FRAND opinion service, subject to further engagement with stakeholders. This engagement will help determine whether the introduction of a voluntary, non-binding FRAND opinion is feasible, and if so, determine the design with any pilot to be developed with the involvement of industry.

The consultation response also reflects concerns about transparency. The government plans to explore the creation of a voluntary disclosure mechanism through the UKIPO that could provide businesses with better information about SEPs. The intention is to reduce the information gaps that can complicate licensing negotiations and make it difficult for implementers to identify which patents may require licences.

Questions around transparency have been a recurring feature of policy debates both in the UK and internationally. Previous proposals considered by UK policymakers included independent essentiality checks, while the European Commission’s now-abandoned SEP reform also centred on greater transparency through SEP registration and verification mechanisms. Although the proposed disclosure mechanism is voluntary, the government indicated that it would be willing to consider mandatory disclosure if there is widespread non-compliance.

The government also said it will explore ways to improve information exchange between parties during SEP negotiations within the existing civil procedure framework, including the possibility of developing a SEP-specific pre-action protocol – although doing so alongside FRAND licensing guidelines. “Many respondents emphasised that any approach should align with the CJEU’s Huawei v ZTE framework that sets out what steps must be taken when negotiating FRAND licences in good faith,” said Marfé. “Respondents raised some concerns that a UK protocol could create friction in global licensing negotiations or encourage parallel proceedings abroad if not aligned with international practices.”

The consultation explored whether an independent mechanism to assess whether patents are genuinely essential to standards could assist negotiations and reduce disputes. However, ministers have concluded that they will focus on improving transparency, encouraging higher-quality information and supporting more informed use of existing services.

While some respondents raised concerns regarding alleged “bad faith” negotiation tactics, ministers concluded that restrictions on injunctions were not justified. Instead, the government will explore the development of best practice guidance for SEP negotiations in collaboration with industry.

Following the consultation, there will be no new standalone alternative dispute resolution (ADR) service or expansion to the IPO’s mediation service specifically for SEPs. The government will instead look at improving access to existing ADR services by providing clearer practical guidance and signposting their availability. “The highlighted aim of encouraging greater uptake of ADR where appropriate, rather than creating new and potentially overlapping services, is topical given the recent opening of the UPC Patent Mediation and Arbitration Centre (termed PMAC), and implicitly acknowledges the need for the UK to compete with other dispute resolution centres given the international aspect of SEP disputes,” said Taylor.

“Stakeholders’ views on ADR diverged on its effectiveness, although some respondents with mediation or arbitration experience said it was useful in principle particularly where parties engaged constructively, exchanged information early, and narrowed the disputed issues,” said Marfé.

The UKIPO will also build on its existing non-regulatory measures, including leading international work through the Intergovernmental SEP Network (ISN) and engagement with standards development organisations, to help reduce fragmentation in the global SEPs ecosystem and complement the broader package of measures. 

As complex questions around forum selection, cross-border enforcement and comity issues have arisen where parallel FRAND disputes have taken place in, for example, the UK, Germany, the UPC and China, proposals for greater international collaboration were supported, with the response noting that “the government does not wish to exacerbate existing jurisdictional complexities through its policymaking”.

“The proposals are aimed at addressing concerns on both sides of the debate,” said Taylor. “The measures aimed at addressing transparency issues will undoubtedly reassure implementors, while SEP holders will likely welcome the voluntary nature of many of the measures. That said, further work is needed to ascertain exactly what these proposals will look like which will take time.” 

The response confirms that further work will now be undertaken with industry stakeholders, the judiciary and technical experts, with any legislative changes expected to be introduced over a longer timeframe.