When a patent is declared essential to a technical standard (a "standard-essential patent" or SEP), the patent holder commits to licensing it on FRAND terms. FRAND does not denote a single fixed royalty rate but rather a corridor of acceptable conditions.
In a very recent case (file No. 7 O 7655/25) in which the German partner firm of AIPEX, Prinz & Partner, was involved the Munich I Regional Court stated how the FRAND corridor shall be calculated where comparable licence agreements already exist.
The court held that the highest permissible rate must not exceed three times the lowest, equivalent to a 50% deviation above or below a median value. Example: where the median rate is 5 % license fee rate, the FRAND corridor extends from 2.5 to 7.5 %.
Where additional, less comparable licence agreements exist, these may indicate that the primary reference rate is a favourable outlier rather than a true median, thereby shifting the corridor upwards. Example: the primary comparable licence shows a rate of 5 % but further, less comparable agreements indicate a rate of 6 % for similar products. Thus, there are grounds to treat the rate of 5 as below the true median so that the median within a normalised corridor of 1 to 3 could shift from 2 to 1.8, leading to a FRAND corridor of 2.78 % (5% / 1.8) to 8.33 (5 % x 3 / 1.8).
Where a directly comparable competitor licence exists, the upper limit is further capped at a 15% premium over that rate, reflecting the non-discrimination obligation. Justifiable grounds for differentiation within the corridor include the scope of the licence and the conduct of the parties, as a licensee who concludes an agreement promptly causes less administrative burden and thus may benefit from a lower license rate.