Context:
- In the spring, the UPC’s Mannheim Local Division (LD) encouraged a settlement between ZTE and Samsung on terms that were materially consistent with findings by a Chinese court and the Munich I Regional Court (May 12, 2026 ip fray article). Under those terms, Samsung would pay $640M for a 5-year deal, or $730M for a 6-year license. As a fallback to an immediate agreement, the Mannheim LD also proposed PMAC mediation. The UPC’s alternative dispute resolution center is capable of helping parties resolve global disputes over fair, reasonable, and non-discriminatory (FRAND) licensing terms (October 7, 2026 ip fray interview with PMAC Director Aleš Zalar).
- While there is widespread consensus apart from the UK as an outlier jurisdiction, implementers often take licenses only when commercial impact is imminent. In the spring, the Munich I Regional Court granted ZTE a Germany-wide standard-essential patent (SEP) injunction against Samsung (April 30, 2026 ip fray article). No enforcement impact has been reported from Germany yet, which could be due to the appeals court having raised the security amount.
What’s new: The UPC’s Mannheim LD has issued and published a preparatory order (PDF) ahead of a November 18-19, 2026 oral hearing over EP3577874 (“Methods, apparatus and systems for determining a transport block size in a wireless communication”). It comes with a stern (and underlined) warning that “the patent-in-suit is likely to be infringed and valid”. The order furthermore raises concerns over Samsung’s FRAND compliance.
Direct impact:
- This patent appears to cover a technique that Samsung could not easily work around. First, it has to do with fundamental data structures at the transport level, so Samsung would have to put itself out of compliance with cellular standards in order to design around an injunction, and network operators would not appreciate that. Second, any such change would likely take more than a simple software update. If Samsung had to ask Qualcomm to modify its high-end baseband chipsets, that could be a non-option.
- Samsung can still try to persuade the court, but the dispute appears to turn on claim construction. There is an admissibility dispute regarding invalidity where the Mannheim LD’s stance appears consistent with UPC practice (one can’t argue lack of inventive step at a later stage even if the prior art references have been cited before because it’s a different kind of theory). And on FRAND, the Mannheim LD’s settlement proposal indicated the likely outcome of a royalty determination, but the court might not even get there (or might do so on a purely optional basis, thereby hardening the judgment for an appeal) if Samsung was found an unwilling licensee on behavioral grounds.
- Enforcement security is a big topic in Munich, but could be a commercial non-issue in this UPC dispute. And the market impact would be substantial as ZTE is seeking an injunction with respect to eight UPC member states, among them three large economies (Germany, Italy, France) and five smaller ones (the Netherlands, Sweden, Finland, Portugal, and Romania).
Wider ramifications:
- Samsung has demonstrated its determination to defend itself vigorously, but it would act rationally now by accepting a deal on terms reasonably consistent with what three courts found to be a FRAND amount for this deal.
- A settlement in the coming weeks or months would be proof of the UPC’s enforcement powers, also with a view to the chilling effect of the security amounts set by the Munich appeals court.
- The Mannheim LD has traditionally helped parties and their counsel with pretrial orders outlining an initial inclination. In many cases, those orders expressed the judge-rapporteur’s view. Here, Judge-rapporteur Tobias Sender explicitly states that he entered the order “after consultation with the Presiding Judge and the technically qualified [j]udge”. That is not the full panel as there is a second legally qualified judge, but it would be a majority in the (less likely) event of a split panel.
- Many non-German UPC divisions have long been reluctant to outline their preliminary views even at the start of a hearing, much less ahead of trial. But that attitude has been recognized as one of the reasons for which most UPC infringement cases get filed with Germany-based divisions, and something is changing. For instance, the Paris LD departed from its past practice of not indicating a preliminary opinion in a high-profile case against OpenAI earlier this month (October 7, 2026 ip fray article).
Due to redactions, the FRAND-related part of the order must be interpreted with caution as far as its references to different UK proceedings are concerned, but one part is perfectly clear:
Samsung will hardly be able to convince the Mannheim LD that a royalty amount substantially below the one proposed in the May 12, 2026 order would be sufficient. The new Mannheim order references that settlement proposal and (without revealing details to the general public) the FRAND discussion held behind closed doors in the spring at a hearing in a related case. Given that the Mannheim LD order doesn’t express the slightest doubts about whether the court’s past position on the royalty amount was correct, Samsung cannot realistically prevail on its FRAND defense if it refuses to pay such an amount.
So the most important aspect of the FRAND part of the new order is not what’s in it. The key thhing is what Samsung would have needed and what is missing. There’s no doubt, concern, or anything else that would call into question the Mannheim LD’s prior position on the royalty amount.
The question is not whether Samsung can realistically prevail on FRAND. It’s just whether a royalty determination is needed or whether something else is in and of itself dispositive of Samsung’s FRAND defense.
A potential shortcut that would obviate the need for a FRAND determination is found in the part that discusses the UK proceedings (which were brought by Samsung). If Samsung is deemed an unwilling licensee, numbers are not needed.
Let’s look at the (heavily redacted) second and final part of the FRAND section first:
“Against this background it may be held against [Samsung] that they, according to [ZTE], apparently still [REDACTED BY THE COURT], even though they defend this decision [emphasis added]. Instead, it is the understanding of the Court that [Samsung] [REDACTED BY THE COURT]. It appears to be questionable and will have to discussed in the oral hearing, if such behaviour can be assumed to be compliant with the conduct of a willing licensee working constructively towards the conclusion of a FRAND license agreement.”
The previous paragraph is rather long, and it talks about two decisions, but there are overwhelming reasons to assume that “this decision” means the UK FRAND determination, which was far below the consensus of three other jurisdictions (May 1, 2026 ip fray article). It is the only ruling explicitly called “decision” in the previous paragraph, even though it subsequently (and in the sentence preceding the one that says “this decision”) talks about a win by Samsung on the technical merits of one of Samsung’s own SEPs (August 28, 2026 ip fray article), which is technically also a decision. It is worth nothing that the commercial leverage Samsung can gain from a UK injunction against ZTE is negligible compared to what ZTE is now likely to win in the UPC, but let’s refocus on interpretation.
The passage quoted above indicates that there appears to be some contradiction (from a FRAND point of view) between Samsung defending a decision (presumably the rate determination) and the duty to work constructively toward the conclusion of a license agreement on FRAND terms. It is impossible to see that defending a patent validity ruling would be non-FRAND as the alternative would be to concede the patent’s invalidity.
It is not unreasonable to read between the lines of the first paragraph on FRAND and see potential misgivings by the Mannheim LD of Samsung “continu[ing its] active litigation campaign in the UK” despite the fact that even the FRAND determination Samsung itself sought shows that Samsung will be the net licensee and make a balancing payment to ZTE. But the ellipsis after “apparently still” does not necessarily relate to Samsung’s UK patent enforcement: it could also have to do with payments made by Samsung in the aftermath of the UK ruling as one would normally expect a party like Samsung to at least accept the UK outcome as an undisputed minimum royalty amount and pay that amount (as opposed to merely making a deposit). The suspicion of inconsistent conduct could also have to do with something else. Let’s not jump to conclusions for now, and whatever this is, it is just an additional path (and potential shortcut) to victory for ZTE, while Samsung has no realistic chance of prevailing on FRAND at this stage.
The Mannheim LD clearly considers this a case in which Samsung should accept ZTE’s offer and take the deal or it will, barring a surprise, be enjoined with respect to eight countries.
We will never know whether Samsung could have struck a better deal prior to this Mannheim order, which gives ZTE major leverage.
Court and counsel
Panel: Presiding Judge Prof. Peter Tochtermann, Judge-rapporteur Tobias Sender, Judge Carine Gillet (Paris, France), and Technically Qualified Judge Klaus Loibner.
Counsel for ZTE: Vossius & Partner’s Dr. Georg Andreas Rauh (UPC) and Taliens’s Dr. Thomas Lynker.
Counsel for Samsung: A&O Shearman’s Dr. Jan Ebersohl and Zimmermann & Partner patent attorney Dr. Joel Naegerl (“Nägerl”).