FRAND at the UK Supreme Court: Optis v Apple

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6 July 2026

Last week, the UK Supreme Court heard Optis Cellular Technology LLC and others v Apple Inc and others, a landmark appeal raising fundamental questions about how fair, reasonable and non-discriminatory (FRAND) royalty rates for global standard essential patent (SEP) portfolio licences should be determined, the proper limits of appellate intervention in those valuations and whether limitation periods bear on royalties for past sales.

The dispute arises from the mobile telecommunications standards administered by ETSI. Optis, a patent assertion entity, owns a portfolio of SEPs declared essential to cellular standards, having acquired those patents from major industry players including Ericsson, LG, Panasonic and Samsung. Apple sells products implementing those standards, including the iPhone. After protracted technical trials, in which the courts found all asserted SEPs valid and six of seven essential and infringed, the parties could not agree FRAND licence terms. Apple ultimately committed to take whatever licence the UK court determined to be FRAND.

At first instance, the trial judge rejected the expert evidence of both parties, devised his own averaging methodology, and arrived at a lump sum licence fee of approximately $56.43 million plus interest. The Court of Appeal rejected that approach entirely and, rather than remitting the matter, conducted its own FRAND determination. Anchoring to what it called the best individual comparable licences, the Court of Appeal set a royalty of $0.15 per unit, producing a total payment to Optis of $502 million plus interest: approximately nine times the first instance figure, and implying an aggregate 4G royalty stack of around $40 per device. For context, the Court of Appeal's near-contemporaneous ruling in InterDigital v Lenovo implied (according to Apple) a stack of approximately $6 per device, as did the first instance judgment in the present case.

The Court of Appeal also ruled that limitation periods play no part in determining FRAND terms (making royalties payable on all Apple's past sales back to 2013) and treated any final US damages award as a floor for the global royalty. Apple appeals on five grounds: the rate itself, the methodology underlying it, the Court of Appeal's decision to determine that rate itself rather than remit, the exclusion of limitation periods and the US floor. The case has attracted submissions from multiple interveners including Intel, Qualcomm, Acer, Tunstall Healthcare, HMD Global, the Fair Standards Alliance and the Motion Picture Association.

We set out below the key points of broader significance from the hearing.

Outlook

While the outcome is to be seen, the character of the Court's questioning suggests that several of Apple's arguments, on comparables methodology, the limits of appellate fact-finding, and the relevance of limitation periods, were received with genuine interest and, at times, apparent sympathy. The Court returned repeatedly to the evidential constraint under which the Court of Appeal worked (having reviewed a fraction of the trial materials) and to the commercial logic of limitation periods.

The stakes extend well beyond the two parties. The Court of Appeal's implied aggregate 4G royalty stack is approximately $40 per device, against (according to Apple) approximately $6 implied by the first-instance determination in this case and by the Court of Appeal's ruling in InterDigital. The Supreme Court's guidance on FRAND comparables methodology, the weight owed to first-instance findings of fact, the role of limitation periods in SEP licences, and the relationship between English FRAND determinations and parallel foreign proceedings will shape SEP licensing across mobile telecommunications and every adjacent sector that is subject to standardisation. For those operating in this space, whether as implementers, SEP holders or platform administrators, the judgment will provide important clarity on how the English courts approach global FRAND rate-setting and will feed directly into licensing negotiations across the industry. Judgment is expected late 2026 / early 2027.

FRAND at the UK Supreme Court: Optis v Apple

Outlook

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FRAND at the UK Supreme Court: Optis v Apple

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FRAND at the UK Supreme Court: Optis v Apple

FRAND at the UK Supreme Court: Optis v Apple

Outlook

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FRAND at the UK Supreme Court: Optis v Apple

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Outlook

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FRAND at the UK Supreme Court: Optis v Apple