FRAND Willingness in Munich: Pay the Undisputed Amount - or Risk an Injunction

Munich's 7th Civil Chamber has sharpened its FRAND playbook: where implementers dispute only the amount of the licence fee (not the obligation to pay), security alone may no longer be sufficient. In three recent decisions (Wilus v. Asus 7 O 5007/25; Nokia v. Asus 7 O 4102/25; Broadcom v. Renault 7 O 7655/25), the Court has signalled that a cash partial payment of the undisputed amount can be a prerequisite to demonstrate licensing willingness – raising the injunction risk for hold-outs and forcing in-house teams to rethink their negotiation and litigation strategy.

The Court's new further condition for demonstrating willingness to take a licence

The 7th Civil Chamber has established a new condition, which is to be considered in addition to the prevailing requirements for demonstrating willingness to take a licence. This new condition pertains to the obligation of the implementer to make partial payments in circumstances where there is no dispute between the parties regarding the implementer's obligation to make a payment at the end of the day, and the sole point of contention is the amount. In this case, the 7th Civil Chamber determined that the undisputed amount must be paid to the patent holder, thereby ensuring that the payment remains permanently in their possession. This initial payment is regarded as an advance on the total licence fee, which is to be settled upon determination of the precise amount. The amount of this initial payment is determined by the offer of the implementer. Consequently, when the parties are negotiating a worldwide licence, the amount is not limited to the territory of the Federal Republic of Germany.

The 7th Civil Chamber's initial statement on this matter was established in its notice order of 14 July 2025, which was issued in the context of a dispute between ZTE and Samsung (7 O 64/25 and 7 O 2750/25). However, it was not until January 2026 that the Court was able to address this point in an initial ruling, which was followed shortly afterwards by two further rulings. Munich I Regional Court established a significant precedent in this matter by determining that the mere provision of security was insufficient to demonstrate a willingness to take a licence.

Subsequent to Munich I Regional Court's establishment of this new condition in the two Asus cases, (7 O 5007/25 and 7 O 4102/25) the German Federal Court of Justice (BGH) delivered its judgment in VoiceAge v. HMD (in Germany also known as FRAND Objection III), KZR, 10/25, on 27 January 2025 and stated at margin no. 89 of this decision that as long as it remains unclear whether a licence agreement will be concluded and, if so, under what terms, the user cannot be required to make payments to the patent holder. However, it is objectively reasonable for the user, in light of the fact that they are already using the protected technical teaching, to demonstrate their willingness to take a licence by providing security that guarantees the enforceability of the patent holder's claims under the licence agreement to be concluded. Concurrently, this measure safeguards the interests of the patent holder by mitigating the risk of financial loss in the event of the user becoming insolvent during the course of negotiations.

The first headnote of Munich I Regional Court's recent decision of 5 February 2026 in Broadcom v. Renault, 7 O 7655/25, stated that the decision of the German Federal Court of Justice (BGH), KZR 10/25 (judgment of 27 January 2026) does not conflict with its recent case law (notice order of 14 July 2025 in cases 7 O 64/25 and 7 O 2750/25, as well as judgments in cases 7 O 5007/25 and 7 O 4102/25).

Munich I Regional Court continued by making a distinction between the external and the internal willingness to take a licence (äußere und innere Lizenzwilligkeit, see here: Munich I FRAND Ruling on Internal Willingness to License). The existence of external willingness to take a licence is presumed in the absence of any obvious hold-out. This is typically the case when the defendant has settled the undisputed amount and provided security. Only then should the substance of the claimant's offer be examined to determine whether it falls within the permissible FRAND framework. In the event that the claimant's offer is determined to be within the established parameters and is not accepted by the defendant, it can be deduced that the defendant does not possess the requisite internal willingness to take a licence.

This recent decision in the case of Broadcom v. Renault indicates that the Court will implement the new standard for determining the willingness to take a licence in future proceedings. This development gives rise to several questions, including the circumstances subject to which a partial payment must be made to demonstrate such external willingness and the legal basis upon which the implementer may make such a payment.

Circumstances in which partial payment is required

The Court determined that merely providing security is not sufficient in circumstances where it is established between the parties that the defendant has an obligation to pay a licence fee and the sole point of dispute is the specific amount of this fee. This must be determined on the basis of an evaluation of the circumstances of the individual case. In the two Asus cases (7 O 5007/25 and 7 O 4102/25), Asus had initiated parallel rate-setting proceedings in the UK and made counteroffers. This demonstrated that, in principle, Asus did acknowledge its obligation to remunerate the claimants for using their patents. However, Asus contested the fair and reasonable nature of the sum requested by the claimants. In the case of Broadcom v. Renault, the parties involved engaged in negotiations concerning a portfolio licence that would encompass the entirety of Broadcom's portfolio. This was initiated at the behest of the defendant, who deliberately opted for a licence that would extend to the entire portfolio, as opposed to the standard that was pertinent to the dispute currently pending before the Court. Moreover, Renault had made counteroffers to Broadcom offering a certain amount as licence fee. Furthermore, the parties had previously reached a consensus on the terms of the licence agreement to be concluded (see margin no. 118 of the Renault decision).

These findings suggest the existence of a scenario in which both parties would, in principle, agree to enter into a licence agreement, yet hold divergent views on the matter of the licence fee.

For such a situation, Munich I Regional Court has determined that a willing licensee would pay the undisputed amount, which will ultimately have to be paid in any event, rather than merely providing security to the patent holder.

In the case Nokia v. Asus 7 O 4102/25 the defendants therefore made such a partial payment in the amount of the last counteroffer or at least bindingly offered to make such a payment and were deemed to be willing licensees by Munich I Regional Court. (The FRAND defence was nevertheless unsuccessful as the Court deemed Nokia's offer to be FRAND). The same was true in the case of Renault, in which Munich I Regional Court furthermore determined that the counteroffer made by Renault was insufficient.

Legal basis for the implementer to make a partial payment

From the perspective of the implementer, who is also the defendant and seeks to comply with the condition stipulated by the Court, the question arises as to whether such a payment can be made with a legal basis in a situation where no contract has yet been established between the parties involved. To articulate the matter more succinctly: On what basis can the accounting department of the implementer release the payment?

According to the principles of German civil law, the implementer does not have a contractual right to make a partial payment. This is due to the stipulation in section 266 German Civil Code (BGB), which states that the obligor is not entitled to render part-performance. However, the parties may agree on part-performance (Grüneberg, BGB, 85th edition, § 266, margin no. 5). Consequently, the implementer may propose a partial payment to the patent holder. A patent holder who acts in good faith and with reasonableness would likely have to consent to such an offer. Conversely, should a patent holder reject such an offer, it would be difficult to argue that the implementer is unwilling to take a licence.

Furthermore, according to German civil and commercial law, a company is permitted to make a payment on a claim for damages based on tort law, even in cases where the claim is contested. Using patents belonging to another entity without the requisite licence or consent of the patent holder is considered a tort under the principles of civil law. Consequently, there may be a legal basis for the settlement of such a claim even in the absence of a contract between the parties.

Amount of the partial payment and additional security

The amount of the partial payment is defined by the counteroffer made by the implementer, as this amount is the only one that has not been contested. However, this does not permit the defendant to submit a significantly reduced counteroffer, pay the stipulated amount, and thereby demonstrate a willingness to take a licence. This is because Munich I Regional Court made it clear that additional security must be provided if the offer of the implementer is less than 60% of the last offer of the patent holder and the difference between the offers is more than USD 10 million. In this case, as a rule, an additional amount equaling the licence fee for one year based on the offer of the patent holder must be deposited as security. However, in the event that the implementer initiated rate-setting proceedings in a different forum, such as in the UK, they may be obliged to provide a higher amount of security if the interim licence award issued by the Court in the rate-setting proceedings exceeds the counteroffer of the implementer. The rationale underlying this principle is that the implementer who has deliberately initiated the rate-setting proceedings should be bound by its results, irrespective of whether or not the patent holder agreed to the rate setting.

The key point to be noted by the implementer is that, at least when facing proceedings in Munich, they must be prepared to make partial payment to the patent holder in the amount offered by them and provide additional security, if necessary. Interim licence awards in parallel rate-setting proceedings must be taken into account in this regard. Conversely, the patent holder should accept such partial payments. Rejecting them could be construed as being non-FRAND.

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