UKIPO SEP Reform Threatens Litigation Revenue as New Rate Track Targets £14m FRAND Cases

The UK Intellectual Property Office published its Corporate Plan 2026-2027 on 11 May, signalling its most significant intervention yet in the Standard Essential Patents ecosystem. For IP attorneys, the message is clear: the government intends to disrupt a litigation market worth millions per case.

The plan identifies SEPs as a priority reform area for 2026. SEPs are of growing importance to the UK economy, but the ecosystem faces longstanding challenges. These include transparency in licensing practices, uncertainty over which patents are truly essential, and a costly, complex dispute resolution environment that can particularly disadvantage SMEs.

Policy development in this area will continue during 2026. The Corporate Plan confirms that the UKIPO intends to complete its policy development work on SEPs and make further progress towards potential changes to the regulatory framework.

The Rate Determination Track

The centrepiece reform is a proposed Rate Determination Track (RDT) within the Intellectual Property Enterprise Court. We are considering the introduction of a 'Rate Determination Track' (RDT) to the Intellectual Property Enterprise Court (IPEC). This would supplement the existing Small Claims and Multi Claims Track, to ensure cost effective access for businesses. The RDT, if introduced, would be a simpler and more efficient approach to proceedings to determine the correct licence rate.

Currently, FRAND determination cases can cost upwards of £14 million to litigate. The total costs awardable are limited to £50,000 for the liability hearing and £25,000 for the damages hearing, based on a scale of costs. Such costs caps do not apply in the High Court. Existing IPEC proceedings cap total recoverable costs at £60,000 for liability determinations.

This would be a low-cost, streamlined litigation route focused solely on determining FRAND licence terms, in cases where infringement, validity, and essentiality are not disputed. The track would bypass the most expensive elements of SEP litigation, essentially offering rate-setting as a service.

Mandatory Disclosure Requirements

The second main proposal is mandating or incentivising the disclosure of standard-related patent information in order to introduce an additional search function via the UKIPO's One IPO Search service. Patent owners would need to notify the IPO of SEPs at grant or first renewal.

Patent owners would need to notify the IPO of SEPs at grant or first renewal, including details such as the relevant standard, FRAND commitments, and licence availability. This data would be searchable via the UK's One IPO Search tool. The goal is to reduce search costs for implementers and enable better-informed licence negotiations.

Impact on IP Practice

The reforms present a clear threat to traditional SEP litigation revenue. High Court SEP cases currently generate substantial fees through multi-year proceedings involving complex technical and economic evidence. The RDT would compress these disputes into streamlined rate-setting exercises.

The trade-off brings opportunities. The new route would give businesses of all sizes the opportunity to quickly and affordably settle disputes about a rate for SEPs they need to license. The publication of rates determined via this route should also increase transparency and efficiency, as a starting point for commercial negotiations.

The mandatory disclosure requirements create new compliance work. Patent prosecution practices will need to integrate SEP identification into their filing procedures. This represents a structural shift, transforming patent filing from a purely protective exercise into an active licensing enabler.

International Context

Although the UKIPO foreshadowed its consideration of potential policy interventions in its corporate plan for 2024-2025, the implementation of new regulatory measures cuts across the government's other ambition to streamline regulation in an attempt to help drive economic growth.

The UK approach differs markedly from the EU's withdrawn SEP regulation. While the EU's efforts were viewed by many as overly centralised and burdensome, the UKIPO appears focused on proportional interventions such as a voluntary Rate Determination Track, improved patent transparency, and optional essentiality reviews.

SEP holders are especially keen to bring their complex FRAND trials before the British courts. With the recent ruling in InterDigital vs. Lenovo, the High Court once again established itself as the go-to location for FRAND rate setting. The RDT could cement the UK's position as a neutral forum whilst addressing cost concerns.

What Comes Next

The UK government's efforts to reshape its approach to standard essential patents, or SEPs, are unlikely to yield any concrete proposals before early 2026, as the Intellectual Property Office begins to analyse responses to a consultation that has drawn nearly 100 responses from industry.

The UKIPO will complete its SEP policy development work in 2026. For IP attorneys, this timeline demands strategic planning. Firms specialising in high-value SEP litigation must consider how to adapt their service offerings. Those focusing on SME clients may find new opportunities in simplified rate determination procedures.

The question isn't whether change is coming. It's whether the profession will shape that change or be reshaped by it. With nearly 100 consultation responses submitted, the battle for influence over the final framework has already begun.