The Principle of Territoriality in International Intellectual Property Law and Its Implications for Global FRAND Rate-Setting

The principle of territoriality under which intellectual property (IP) rights exist and are enforced only within national borders sits uneasily alongside the global nature of standard-essential patent (SEP) licensing disputes. In recent years, courts in Brazil, China, Colombia, Germany, India, the United Kingdom, and now the Unified Patent Court have asserted authority, directly or indirectly, to determine worldwide fair, reasonable, and non-discriminatory (FRAND) licensing terms, often without both parties’ consent. These practices, ranging from injunction-driven leverage to comprehensive judicial rate-setting, raise difficult questions about jurisdiction, comity, competition norms, and the coherence of international IP law.

This article provides a systematic and comparative analysis of the principle of territoriality in international IP law and its tension with non-consensual global FRAND determinations. It traces the origins and enduring role of territoriality in treaties such as the Paris Convention and TRIPS Agreement, examines its implications for jurisdiction and choice of law, and explains why territoriality remains a cornerstone of global IP governance. It then turns to the distinctive case of SEPs, highlighting the role of standard-setting organizations and the unique licensing challenges they generate. Against this backdrop, the article maps national approaches across key jurisdictions, identifying functional categories (adjudicators, regulators, and leverage providers) and analyzing how their practices interact in transnational disputes.

Drawing on recent case law, WTO findings, and comparative treatment of other IP rights, the article argues that non-consensual global FRAND rate-setting undermines the territorial foundation of international IP law and risks destabilizing global markets. At the same time, it acknowledges arguments for efficiency and uniformity and considers how these objectives might be pursued within a framework that respects sovereignty and due process. The article concludes by proposing both short-term and longer-term solutions, ranging from national court strategies and WTO enforcement to a possible role for WIPO, the US Congress, and the EU, designed to reconcile innovation incentives, market access, and the legitimacy of international dispute resolution.