Analysis
Last month, we looked at what appeared to indicate smartphone maker HMD’s compliance with a recent pair of UPC injunctions (September 18, 2026 ip fray article). We still can’t find smartphones on the sections of HMD’s website designed for visitors from the countries covered by those UPC injunctions. But that also suggests the related dispute hasn’t been resolved.
It’s good not to be a soft target, but only within reason
No one wants to be a soft target for patent assertions. Once a company has that reputation, more and more patent holders will come, make outrageous demands, or simply sue right away. That’s why a company may very well elect to overspend on certain lawsuits. Even if it’s not worth it in the short term, it may save costs in the long run.
That said, there comes a point where protracted litigation ceases to be economically justifiable. There are those situations in which taking a license, especially if the relevant industry has largely accepted the terms, is the rational choice unless, of course, a company serves as a stealth-funded stalking horse for others with far greater economic interests. It wouldn’t be per se illegal, and it would change the calculation.
Three current disputes: Huawei, Via, VoiceAge EVS
VoiceAge EVS brought its first litigation against HMD in October 2019. Active pre-pandemic patent disputes are hard to come by in the smartphone industry.
Huawei first sued HMD in 2022. For Huawei, that is an unusually long-running dispute. Huawei v. ZTE was an exception, but that’s because it went all the way up to the European Court of Justice.
Orange and Navigate, whose Advanced Audio Coding (AAC) patents can be licensed through a Via Licensing Alliance pool, sued HMD in late March 2025. Compared to the disputes mentioned in the previous paragraphs, that may sound rather recent. But that depends on the point of reference. Via’s AAC pool is extremely successful: it has well over 900 active licensees, and over the course of a decade, only about 10 implementers were sued. To the extent that litigation had to be brought, it typically settled ahead of trial. In fact, the median duration of those cases is four months.
Via, VoiceAge and Huawei have licensed virtually the entire smartphone industry (by volume), and concluded numerous agreements without the need for enforcement.
Litigation expenses that are sometimes above the royalty amounts at stake
When the Munich Higher Regional Court heard VoiceAge EVS v. HMD (October 31, 2024 ip fray article), it became known that the total amount of litigation expenses at that stage already exceeded the lifetime value of a license.
HMD sent so many lawyers to that appellate hearing (from two different law firms) that some of them had to sit in the spectators’ area of the courtroom.
It is possible that HMD will also spend more on litigation than a license to Via’s AAC pool would cost. HMD’s sales volumes can be estimated, and Via’s rates are published. The annual amount is probably in the low seven digits (in U.S. dollars).
HMD is represented against those Via licensors by a top-notch firm. In the lawsuits against Orange and Fraunhofer, three equity partners (two attorneys-at-law and one patent attorney) plus a long list of associates appeared. We found out that at the interim conferences in the Orange and Fraunhofer cases, at least six attorneys were present, which is quite a lot for a UPC interim conference.
At some recent UPC hearings, HMD’s attorneys also outnumbered their counterparts: Navigate was represented by four attorneys, but HMD sent six UPC representatives. Orange was represented by three attorneys, while seven UPC representatives showed up for HMD.
Judicial skepticism of HMD’s FRAND defenses
Not a single fair, reasonable, and non-discriminatory (FRAND) licensing defense by HMD has succeeded to date. Injunctions have come down in the UPC, in Germany, and in Brazil.
In the VoiceAge EVS case, the Federal Court of Justice of Germany made a landmark decision, but the judges (also at the courts below) were not convinced that HMD was entitled to a compulsory license on antitrust grounds, given that it argued that it could keep selling phones in Germany despite a half-dozen injunctions, which is hard to reconcile with allegations of an abuse of market power.
In the UPC dispute with Fraunhofer, HMD said it wanted bilateral licenses instead of a pool license, but that did not convince the Hamburg Local Division (LD):
Choosing the bilateral route does not ease the implementer’s obligation to show its willingness to take a licence throughout the course of the negotiations. In particular, an implementer’s insistence on bilateral licensing can still indicate unwillingness when the implementer fails to present comprehensible reasons for its decision to opt for bilateral agreements, failed to conclude bilateral agreements with the other SEP pool licensors within reasonable time, and refrained from placing a security. This is even more true when initially being provided a FRAND pool offer.
A Munich ruling will come down in late October, and apparently the court indicated an inclination to follow the Hamburg LD’s reasoning.
When will those three disputes settle?
Given that HMD likes to exhaust its appeals, it’s hard to tell if any of this will settle in what remains of 2026.
HMD has the right to leave no stone unturned and to spend as much on litigation as it wants. But the economic justification of this is a mystery.