👨‍🏫 FRAND at a Crossroads

Strategic Use of PMAC-UPC Mediation, Arbitration and Expert Determination in SEP Disputes

Executive Lecture Report

by Pierfrancesco C. Fasano

from European Patent Organization Academy - Online 25 June 2026

Introduction

FRAND and Standard Essential Patent disputes now sit at the intersection of law, technology, economics and business strategy. They are no longer merely patent enforcement disputes. They are complex, cross-border licensing conflicts involving global portfolios, technical standards, commercial relationships and long-term market access.

The emergence of the Unified Patent Court has changed the European litigation landscape. At the same time, the Patent Mediation and Arbitration Centre of the Unified Patent Court offers new opportunities to integrate mediation, arbitration and expert determination into SEP dispute resolution.

The central question is therefore no longer whether litigation or ADR should prevail. The more relevant question is how litigation and ADR can interact strategically to transform legal certainty into commercial certainty.

1. Why SEP Disputes Are Different

SEP disputes differ from ordinary patent litigation because they rarely concern a single patent, a single product or a single jurisdiction. They often involve hundreds or thousands of patents, global licensing programmes, multinational products and parties whose business relationship may continue long after litigation has ended.

FRAND commitments add a further layer of complexity. They require assessment of fairness, reasonableness, non-discrimination, valuation, industry practice, competition concerns and commercial reality. The dispute therefore becomes multidimensional: legal questions interact with economic questions, technical questions and strategic business considerations.

This explains why SEP disputes frequently generate parallel litigation across Europe, the United Kingdom, China, the United States, India and other jurisdictions. Parties are often engaged not in a single lawsuit, but in a global procedural chess game.

2. Why the UPC Changes the Game

The Unified Patent Court represents one of the most significant developments in European patent litigation. Historically, European patent enforcement was fragmented. Patent owners litigated country by country, while defendants often relied on procedural differences between jurisdictions.

The UPC changes that equation. It offers a supranational forum capable of producing remedies with broad territorial effect. This increases efficiency, but also concentrates litigation risk. A claimant may obtain relief with wider commercial consequences; a defendant may face greater exposure.

Paradoxically, stronger litigation may increase rather than reduce the relevance of ADR. Effective litigation creates pressure. ADR creates opportunities. Litigation establishes legal certainty; ADR may facilitate commercial certainty.

The UPC should therefore be seen not merely as a court, but as part of a broader European dispute resolution ecosystem.

3. Litigation Remains Essential, but Not Sufficient

Litigation is not the problem. It is an essential component of the solution. Courts determine validity, infringement, remedies and procedural rights. They provide precedent, legitimacy and legal certainty.

However, SEP disputes often continue beyond judicial determination. Even after infringement has been established, parties may still need to agree on royalty structures, licence terms, portfolio coverage, future technologies, reporting obligations and implementation mechanisms.

A judgment may resolve the legal dispute, but not necessarily the commercial relationship. This is particularly important in sectors such as telecommunications, connected vehicles and IoT, where today’s opponent may remain tomorrow’s licensing partner.

The objective is therefore not always victory. Often, it is a workable, implementable and commercially sustainable outcome.

4. Why Sophisticated Parties Choose ADR

Sophisticated users of ADR are often sophisticated litigants. They understand litigation and, precisely for that reason, understand its costs, risks and limits.

ADR offers several strategic advantages.

First, confidentiality. SEP disputes frequently involve sensitive licensing policies, royalty methodologies, negotiation strategies and portfolio valuation models.

Second, flexibility. ADR allows parties to explore cross-licensing arrangements, portfolio-wide settlements, phased implementation, future cooperation and creative solutions that courts cannot impose.

Third, expertise. SEP disputes often involve technical essentiality, economic valuation, telecommunications standards and licensing practices.

Fourth, efficiency. Parallel proceedings across multiple jurisdictions are costly and create uncertainty. ADR may offer a faster route to predictability.

Finally, relationship management. Many SEP parties are repeat players. Preserving a functional commercial relationship may have substantial economic value.

5. The PMAC-UPC as a Dispute Resolution Architecture

The PMAC should not be understood as offering a single solution. It offers a toolkit composed of mediation, arbitration and expert determination.

Mediation supports structured negotiation and commercially oriented outcomes. Arbitration provides final and binding determination, with procedural flexibility and international enforceability. Expert determination may address highly specialised technical or economic questions, including royalty calculations, portfolio valuation, essentiality issues and licensing methodologies.

The key is not to choose a process in the abstract. The key is to match the process to the problem. A relationship issue may require mediation. A finality issue may require arbitration. A technical valuation issue may require expert determination.

In this sense, PMAC is not simply an ADR institution. It is a dispute resolution architecture capable of reflecting the complexity of modern patent disputes.

6. Mediation in FRAND Disputes

Mediation is sometimes misunderstood as mere compromise. In reality, it is a structured negotiation process designed to help parties identify commercially acceptable solutions.

In FRAND disputes, parties often become locked into legal positions. A patent owner may seek recognition of portfolio value. An implementer may seek commercial certainty. Mediation creates a space in which both sides can explore broader solutions.

These may include portfolio-wide licences, cross-licensing structures, future collaboration, royalty models and phased implementation mechanisms.

Mediation is not suitable for every case. Some disputes require judicial determination or binding adjudication. However, where parties need a commercially sustainable outcome, mediation may be particularly well suited.

7. Arbitration and Finality

Arbitration offers finality, enforceability and procedural flexibility. In global SEP disputes, this may be particularly valuable.

Extended litigation across multiple jurisdictions can generate uncertainty. Arbitration allows parties to obtain a binding determination within a framework they can design, including the selection of decision-makers with appropriate expertise.

Its international enforceability is a major advantage for businesses operating across jurisdictions. Although arbitration is not a universal solution, particularly where validity or public law issues arise, it may play an important role within a broader SEP dispute resolution strategy.

8. Expert Determination: The Underused Tool

Expert determination may be the PMAC mechanism with the greatest untapped potential in SEP disputes.

Many FRAND questions are not purely legal. They are technical, economic or valuation-based. How should a royalty rate be calculated? How should a portfolio be valued? How should essentiality be assessed? How should a licensing methodology be evaluated?

Expert determination allows parties to submit specific questions to appropriately qualified experts. It offers speed, specialisation, technical credibility and proportionality.

Not every disagreement requires a full judicial process. Sometimes parties need a reliable answer to a specialised question. Expert determination can narrow issues, reduce complexity and facilitate settlement.

9. The PMAC Flexibility Model

The PMAC model reflects a philosophy of party autonomy and procedural flexibility. This is captured by what may be described as the “Any Rule”: any representative, any seat, any language.

In SEP disputes, parties are often multinational corporations with legal teams, witnesses and commercial operations spread across several jurisdictions. Flexibility is therefore not merely convenient. It is strategically necessary.

The ability to choose representatives, select an appropriate seat and conduct proceedings in a suitable language can increase efficiency, accessibility and user confidence.

10. Integrating ADR Before Litigation

One of the most valuable moments for ADR may be before litigation begins. At this stage, parties may still retain flexibility, even though positions are beginning to harden.

In FRAND disputes, negotiation is often already underway. The question is whether it is effective. Mediation can organise the negotiation, clarify priorities, identify areas of agreement and distinguish genuine disagreements from misunderstandings.

Even where settlement is not immediately achieved, a structured ADR process may improve the quality of future negotiations and reduce unnecessary escalation.

11. ADR During UPC Proceedings

ADR may also operate in parallel with UPC litigation. Litigation generates information, clarifies strengths and weaknesses, creates procedural milestones and influences settlement behaviour.

At the same time, ADR provides a forum for discussing solutions beyond the scope of the litigation. Parties may litigate infringement or validity while mediating licensing terms or referring technical valuation issues to expert determination.

This parallel approach may reduce delay, preserve negotiation momentum and narrow issues. For judges, ADR may also support efficient case management and reduce procedural fragmentation.

12. ADR After Liability Decisions

After a liability decision, the dispute may not be over. Indeed, some of the most difficult questions may only arise once rights have been determined.

The parties may still need to define royalty structures, licence frameworks, implementation mechanisms, monitoring arrangements and future obligations.

At this stage, ADR can translate legal certainty into commercial implementation. Mediation may assist negotiation. Expert determination may resolve valuation issues. Arbitration may provide binding resolution of residual disputes.

This is not duplication. It is specialisation.

13. Hybrid Models as the Future

The future of SEP dispute resolution is likely to be hybrid.

A dispute may begin before the UPC. The parties may then enter mediation. Specific technical or economic issues may be referred to expert determination. Remaining disputes may be resolved through arbitration.

Complex disputes should not necessarily be forced into a single procedural channel. Different questions require different tools.

Hybrid models allow parties to design bespoke dispute resolution architectures, allocating legal, commercial and technical questions to the process best suited to each.

14. Looking Ahead

The PMAC creates an opportunity to develop a distinctive European model for technology dispute resolution.

Europe already has world-class courts, practitioners and innovators. The PMAC may complement these strengths by offering specialised ADR procedures for patent disputes.

The main challenges will be awareness, confidence, user experience, institutional credibility and the development of specialised neutrals. Ultimately, dispute resolution institutions are judged not by their rules, but by their results.

The real test will be whether users find practical value in the system.

Conclusions

FRAND and SEP disputes are global, technical, economic and relationship-based. The UPC is transforming European patent litigation, but litigation alone will not always resolve the full commercial dispute.

Mediation, arbitration and expert determination can expand the strategic toolkit available to judges, litigators, patent attorneys and businesses. They do not replace litigation. They complement it.

The most effective future strategies will combine judicial authority with procedural flexibility, legal certainty with commercial certainty, and litigation with ADR.

Final Takeaways

1. SEP disputes are structurally different from ordinary patent disputes.

2. The UPC concentrates litigation risk and increases the need for sophisticated dispute resolution strategies.

3. Litigation remains indispensable, but it does not always resolve commercial implementation.

4. PMAC-UPC offers a flexible toolkit: mediation, arbitration and expert determination.

5. Expert determination may become particularly valuable for technical and valuation questions.

6. ADR can be used before, during and after UPC litigation.

7. Hybrid models are likely to become central to future SEP dispute resolution.

The key question is no longer whether ADR has a role in SEP disputes, but how it can be deployed strategically.

Closing Reflection

Litigation establishes legal certainty. ADR can create commercial certainty. The future of SEP dispute resolution depends on the effective integration of both.