Warner Bros. Discovery v. Nokia — UK Court Orders Interim RAND Payments for Streaming Video Codec Patents

Background

Nokia Corporation holds a large portfolio of patents it contends are standard-essential to video codec and streaming technology — the Nokia Video Portfolio (NVP) — that has been in commercial use since 2011. Nokia takes the position that streaming services, not only device manufacturers, owe royalties for using these video encoding and decoding standards to deliver content to subscribers.

Nokia initiated licensing demands against two major streaming platforms: Warner Bros. Discovery (operator of Max/HBO, through its subsidiary DPlay Entertainment Limited) and Paramount+ (through Paramount Skydance Corporation and Viacom International Media Networks UK Limited). Rather than litigate in parallel proceedings across multiple jurisdictions, Nokia proposed — and both sides accepted — an “Agreed Mechanism” formalized in March 2026: Nokia would withdraw worldwide parallel litigation, both sides would refrain from new IP claims, and the UK Patents Court would determine a global RAND (Reasonable and Non-Discriminatory) licence on trial, with the parties making interim payments to Nokia pending that trial.

The June 24, 2026 judgment addresses only the interim payment stage — what WBD and Paramount must pay Nokia now, pending the full RAND trial expected in early 2027. A global RAND determination by a UK court is significant: it binds the parties’ licensing obligations worldwide under a single consistent framework, avoiding contradictory national court outcomes.

The Court’s Holding

Mr. Justice Meade ordered Warner Bros. Discovery and Paramount to make interim RAND payments to Nokia, in a 4:3 ratio (WBD pays more, reflecting greater subscriber numbers), with the total amount comprising both a non-refundable base component and a refundable component to be adjusted against the final RAND licence set at trial.

On the methodology for calculating interim payments, Meade J. declined to use a simple mid-point between the parties’ positions — which ranged across three orders of magnitude — because the underlying methodologies (pool-scaling versus bilateral comparable agreements) were qualitatively different. Instead, the court gave “very significant weight” to the Nokia Lump Sum Offer (NLSO): an actual offer Nokia made to Paramount in 2024 covering a defined period. As a real bilateral offer between the parties themselves, the NLSO was more credible and simpler to apply than extrapolating from the parties’ competing expert valuations. (All specific monetary figures are redacted in the public judgment pending a form-of-order hearing on confidentiality.)

On the historical payment period, Meade J. acknowledged that Nokia may be entitled to royalties going back to 2011 (when streaming services first began using the video codec standards) under UK precedent. However, the court found “some doubt” about full back-payment to 2011 because Nokia did not run an active video licensing programme until much later, and the streaming industry had historically assumed device manufacturers — not platforms — bore the royalty obligation. This doubt caused the court to discount the interim payment from the full-period NLSO figure. The question of whether Nokia can recover all the way back to 2011 will be addressed at the RAND trial.

Meade J. also rejected Nokia’s exchange rate uplift: Nokia had calculated amounts using the 2024 USD-EUR conversion rate (approximately 1.0583), which would have given it a ~12% windfall from subsequent currency movement. The court ordered payments in USD at current rates.

Key Takeaways

• Streaming platforms are in the SEP crosshairs. Nokia’s litigation confirms that holders of video codec SEPs are actively seeking royalties from streaming services — not just hardware makers. Any major streaming platform using standard video encoding faces potential exposure for past and future codec royalties.
• UK will set global RAND terms when parties agree. The “Agreed Mechanism” — all worldwide litigation halted, single UK RAND determination — is a model that avoids the cost and inconsistency of parallel multi-country FRAND proceedings. Nokia and the streaming services have, in effect, made the UK Patents Court the world’s RAND tribunal for these patents.
• Actual bilateral offers carry real weight. Meade J.’s preference for the NLSO (Nokia’s 2024 offer to Paramount) over competing expert analyses signals that courts will look for “real” bargaining evidence, not just theoretical pool rates or selected comparables, when choosing an interim benchmark.
• “Later arrival” discount may apply to historical SEP licensing. The court’s “unusual features” discount for Nokia’s late-arriving licensing programme could be significant precedent: if a patent owner did not have an active licensing programme at the time implementers began using its SEPs, and if the industry assumption was that someone else (e.g., device makers) would pay, courts may not award full back-royalties to the date of first use.

Why It Matters

This ruling is the most significant FRAND/RAND case in the streaming sector to date. It confirms that the UK Patents Court is willing — and now experienced — to set global licensing terms for video codec SEPs, making it an attractive forum for Nokia and others with large video patent portfolios. Streaming platforms in the US and EU that have not negotiated direct licences with Nokia should treat this case as a strong signal of their own potential exposure.

More broadly, the case illustrates how standard-essential patent licensing, long dominated by disputes between device manufacturers and smartphone/modem patent holders (Ericsson, Nokia, Qualcomm), is expanding into new sectors. Video codec royalties, network streaming protocols, and AI-generation codec improvements are all potential fronts in the next decade of SEP disputes. The Light & Wonder approach — global RAND in a single jurisdiction — will likely be replicated as Nokia and others pursue streaming platforms in other markets.