🇯🇵 Japan, SEP and FRAND: the New Frontier of Quasi-Adjudicative Mediation in Global Technology Disputes

by Pierfrancesco C. Fasano

For many years, disputes concerning Standard Essential Patents (SEPs) and FRAND (“Fair, Reasonable and Non-Discriminatory”) licensing have been characterised by aggressive litigation strategies, global forum shopping and negotiations frequently paralysed by reciprocal allegations of “hold-up” and “hold-out”.

The FRAND framework was originally conceived precisely to prevent these two systemic distortions, both of which risk undermining the balance between technological innovation, market access and fair competition.

“Patent hold-up” refers to the situation in which the owner of a SEP, once the relevant technological standard has been widely adopted and implemented across the market, exploits its position to demand excessive royalties or disproportionate licensing terms.

The implementer, having already invested in the standard, manufacturing chains and commercial deployment of compatible products, is effectively “locked in” and unable to replace the technology without incurring substantial industrial and economic costs.

“Hold-out”, by contrast, describes the opposite phenomenon: the implementer exploits the complexity, fragmentation and slowness of international litigation in order to delay the conclusion of a FRAND licence for as long as possible whilst continuing to use the standardised technology. In such circumstances:

• royalties and patent validity are systematically challenged;

• parallel proceedings are commenced across multiple jurisdictions;

• procedural mechanisms are used tactically to delay resolution;

• negotiations are prolonged whilst the benefits of the SEP technology continue to be enjoyed.

  
  

Within this framework, SSOs (“Standard Setting Organisations”) — namely international bodies responsible for developing and adopting shared technological standards — have progressively assumed a central role in maintaining equilibrium within innovation markets. Through the FRAND undertakings required from SEP holders, SSOs seek to ensure that essential standards such as 5G, Wi-Fi, IoT, cloud computing, connected automotive systems and AI-related technologies remain interoperable and accessible on non-discriminatory terms.

In recent years, however, the SEP ecosystem has revealed increasingly evident structural tensions:

• multiplication of parallel proceedings across different jurisdictions;

• anti-suit injunctions and anti-anti-suit injunctions;

• growing judicial conflicts between national courts;

• strategic forum shopping;

• extraordinary technical and economic complexity;

• difficulties in determining global FRAND royalty structures.

  
  

SEP disputes have now moved well beyond the traditional paradigm of domestic patent litigation. Decisions relating to royalties, injunctions and patent portfolios may directly influence global competitive dynamics across the telecommunications, automotive, semiconductor, consumer electronics and artificial intelligence sectors.

The defining feature of FRAND disputes lies precisely in their hybrid nature. Such disputes no longer concern merely patent validity or infringement, but increasingly involve:

• highly sophisticated economic assessments;

• global industrial strategies;

• standardisation policies;

• competition law considerations;

• technological interoperability;

• access to strategic markets.

For this reason, national courts have progressively evolved from purely adjudicative bodies into de facto regulators of global technology markets.

It is against this backdrop that Japan introduced, in 2026, the new “SEP Judicial Mediation” (SEPJM) system developed by the Tokyo District Court as a hybrid model of quasi-adjudicative mediation situated somewhere between mediation, judicial case management and technical evaluation.

The Google Litigation and the Japanese Turning Point

The Japanese shift was significantly influenced by litigation involving Google and other major players in the smartphone and advanced telecommunications sectors. In particular, the Japanese decision in Pantech v Google (2025) has been widely perceived as a decisive turning point.

That dispute demonstrated with remarkable clarity that SEP disputes no longer resemble conventional civil proceedings:

• licences are global in scope;

• royalty determinations affect entire industrial ecosystems;

• judicial decisions influence international markets;

• SEP injunctions may alter worldwide competitive balances.

Courts consequently found themselves required to address issues demanding simultaneous expertise in:

• law;

• economics;

• engineering;

• commerce;

• regulatory policy.

The litigation also exposed the growing inadequacy of traditional civil procedural mechanisms for managing global FRAND negotiations.

Determining:

• worldwide royalties;

• the value of SEP portfolios;

• market comparables;

• industrial licensing practices;

• the parties’ negotiating conduct;

• the balance between hold-up and hold-out,

  
  

necessarily places courts within a space situated between adjudication, economic regulation and international commercial negotiation.

The Google litigation further highlighted how traditional litigation timelines are frequently incompatible with the pace of technology markets. Multi-year proceedings may directly affect:

• production cycles;

• product launches;

• industrial strategy;

• research and development investment;

• shareholder value.

It is precisely from this context that the new Japanese model emerged: a procedure retaining consensual elements typical of mediation whilst introducing robust judicial and technical guidance, thereby transforming mediation into a form of quasi-adjudicative mediation or “court-assisted negotiation”.

The Tokyo JMSEP Model

The “Guidelines for Standard Essential Patents Judicial Mediation (SEPJM)” published by the Tokyo District Court in 2026 represent one of the most innovative ADR experiments currently emerging within technology disputes.

The stated objective is to position Tokyo as an international hub for the resolution of SEP/FRAND disputes by offering a framework that is faster, more technical and more predictable than traditional multi-jurisdictional litigation.

The model provides for:

• specialised judicial mediation;

• focus upon global FRAND royalty determination;

• expedited proceedings;

• substantial technical involvement;

• a court-driven procedural structure.

The procedure is expected ordinarily to:

• conclude within six months;

• involve only a limited number of sessions;

• be administered by a panel composed of judges and technical experts.

The Japanese model, however, cannot readily be equated with traditional facilitative mediation.

The court assumes a highly active role:

• directing the procedure;

• guiding technical discussions;

• exerting settlement pressure;

• assessing the parties’ co-operation;

• encouraging concrete settlement outcomes.

For this reason, many international commentators describe SEPJM as a hybrid system situated between:

• mediation;

• early neutral evaluation;

• judicial case management;

• adjudicative ADR.

In certain respects, the Japanese model even resembles forms of “managerial judging”, whereby the judge does not merely determine the dispute but actively participates in constructing the negotiated outcome.

Its most innovative aspect concerns the assessment of FRAND “willingness”.

Under the Japanese system, the parties’ conduct during the procedure may materially affect subsequent litigation.

A party which:

• unreasonably refuses to co-operate;

• artificially prolongs negotiations;

• obstructs mediation;

• adopts delaying tactics,

may ultimately be characterised as an “unwilling licensee”, potentially exposing itself to SEP injunctions.

Mediation therefore becomes, whilst not formally mandatory, strategically difficult to ignore.

It is precisely this form of indirect procedural compulsion that constitutes one of the most innovative features of the Japanese framework.

PMAC-UPC Mediation Rules and Tokyo JMSEP: Two Models Compared

The European system is likewise evolving towards increasingly specialised ADR structures.

The recent rules adopted by the Patent Mediation and Arbitration Centre of the Unified Patent Court (PMAC-UPC) expressly include provisions dedicated to SEP/FRAND disputes, thereby formally recognising the technical, economic and multi-jurisdictional nature of such proceedings.

The PMAC-UPC has been designed as a specialised centre for:

• mediation;

• arbitration;

• expert determination;

• hybrid procedures;

• complex technology disputes.

The new Mediation Rules provide for:

• enhanced confidentiality;

• tailor-made royalty management;

• highly specialised neutrals;

• extensive procedural flexibility;

• integration with the UPC ecosystem;

• procedural mechanisms specifically calibrated for FRAND and SEP disputes.

The comparison with the Japanese model is particularly revealing.

The Tokyo JMSEP system:

• is court-driven;

• integrates mediation with judicial case management;

• places substantial emphasis upon the parties’ co-operative conduct;

• uses procedural pressure as a settlement mechanism;

• displays characteristics closely aligned with adjudicative ADR and quasi-adjudicative mediation.

The PMAC-UPC model:

• is institution-driven;

• is grounded in consensuality;

• emphasises neutrality and party autonomy;

• offers modular ADR mechanisms;

• prioritises technical specialisation and procedural flexibility.

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These distinctions also reflect two different legal cultures.

The Japanese approach appears more closely aligned with a public-law, court-managed conception of technological dispute resolution.

The PMAC-UPC, by contrast, remains more firmly rooted in the European and international tradition of consensual ADR administered by an independent and specialised institution.

Yet the similarities may ultimately prove more significant than the differences.

Both systems:

• recognise the global nature of SEP disputes;

• move beyond purely domestic patent logic;

• rely upon multidisciplinary technical expertise;

• seek expedited outcomes;

• aim to reduce serial multi-jurisdictional litigation;

• regard ADR not as an ancillary mechanism but as a central component of technology governance.

  
  

Both the Tokyo District Court and the Patent Mediation and Arbitration Centre of the Unified Patent Court (PMAC-UPC) appear ultimately to share the same underlying intuition: in FRAND disputes, the objective is not merely to determine who is legally correct, but to establish commercially sustainable conditions for the continuation of markets, technological interoperability and global innovation.

Conclusions

For many years, mediation in SEP disputes was perceived as marginal when compared with international litigation. Large-scale technology disputes were considered too strategic, too technical and too economically significant to be genuinely entrusted to consensual dispute resolution mechanisms.

The year 2026 may well mark a structural turning point.

The Japanese Tokyo JMSEP model has introduced an innovative form of quasi-adjudicative mediation in which consensuality, judicial pressure, technical evaluation and strategic procedural management coexist within a single procedural architecture. Although not formally mandatory, mediation becomes an integral component of FRAND strategy and of the assessment of negotiating conduct.

At the same time, the recent rules adopted by the Patent Mediation and Arbitration Centre of the Unified Patent Court (PMAC-UPC) confirm that the European system is likewise evolving towards highly specialised ADR frameworks specifically designed for global technology disputes requiring interdisciplinary expertise, procedural flexibility and commercial responsiveness.

The two models remain fundamentally different.

The Japanese framework appears more closely oriented towards judicially managed technological conflict resolution, where mediation approaches a form of adjudicative ADR.

The PMAC-UPC, by contrast, remains anchored in the European tradition of consensual ADR administered by an independent specialist institution, with strong emphasis upon party autonomy and procedural modularity.

Nevertheless, both systems appear to share the same fundamental premise: SEP/FRAND disputes can no longer be addressed exclusively through traditional models of multi-jurisdictional litigation.

The growing technical, economic and geopolitical complexity of innovation increasingly requires a new dispute management ecosystem in which mediation, arbitration, technical evaluation and judicial case management progressively converge.

In this respect, SEP disputes may well be anticipating a broader transformation of international commercial justice itself: the transition from a purely contentious model towards a hybrid, technical and multi-layered framework in which the objective is not simply to determine legal rights, but to preserve interoperability, market continuity and the long-term sustainability of global innovation.