Chongqing No. 1 Intermediate People’s Court Sets Global FRAND Rate for 5G SEPs at $0.707/Unit in Nokia/OPPO Case

In a heavily redacted decision released December 13, 2023, the Chongqing No. 1 Intermediate People’s Court made a first-instance judgment in the case of OPPO v. Nokia’s standard essential patent royalty dispute ((2021)渝01民初1232号).  The Court set the global fair, reasonable and non-discriminatory (FRAND) rates for Nokia’s standard essential patents in what is believed to be the first SEP FRAND rates set and published by a Chinese court.  Notably, the Court set discounted FRAND rates in China compared to the US. The majority of OPPO’s sales are in China.

The rates are as follows:

5G mobile phone single unit license fee:

Zone 1: US$1.151/unit; Zone 2 (Mainland China) and Zone 3 (other countries and regions except Zones 1 and 2): US$0.707/unit;

4G mobile phone single unit license fee:

Zone 1: US$0.777/unit; Zone 2 (Mainland China) and Zone 3 (other countries and regions except Zones 1 and 2): US$0.477/unit.

Nokia was asking for 3 Euros per unit for the 5G SEPs.

The Court also held that the global cumulative rate of 5G standards in the mobile phone industry is 4.341%-5.273%.  The judgment also determined the value proportions of 2G, 3G, 4G and 5G intergenerational standards in 5G multi-mode mobile phones with a value ratio of 5G-2G is 50:40:5:5.

The global patent dispute between Nokia and OPPO broke out in July 2021. The two parties have launched infringement litigation, rate litigation, patent invalidation, etc. in multiple jurisdictions including Germany, the United Kingdom, France, Finland, Sweden, India, Indonesia, and China.

Nokia has said it will appeal the decision to China’s Supreme People’s Court potentially giving the Delhi High Court time to make its ruling with perhaps higher FRAND rates.

The redacted decision is available here: Oppo v. Nokia (Chongqing First Intermediary Court) (Chinese only).

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