Data centre developers and investors face growing patent litigation risk in the UK and Europe
Published on 23 October 2026
Patent disputes are moving from the margins to the heart of project risk: a shift the industry is starting to register
At a glance
Patent litigation is a growing risk for data centre developers and investors, driven by a complex, multi-owner technology stacks and a fragmented patent landscape.
The expansive jurisdictional reach of the Unified Patent Court and the growing relevance of standard essential patents are increasing litigation and licensing exposure.
Patent risk is becoming a material factor in data centre transactions, making thorough IP due diligence and robust contractual protections essential to protecting valuation and returns.
Patent litigation is a growing and increasingly central risk for data centre developers and investors. Data centres sit at the confluence of a complex technology stack, from chips and cooling to AI software and cloud platforms – and patents are proliferating across that entire stack, often owned by many different entities within a single facility.
This fragmented landscape raises the risk of third-party infringement claims, which could lead to increased licensing costs, operating restrictions, derailment of project timelines and disruption of service continuity. Public policy support for artificial intelligence (AI) infrastructure also increases patent owners' incentives to enforce their rights.
Transatlantic influences
The US offers an early warning. Data centre-related patent disputes are already rising there, with heavy capital investment and the criticality of operational uptime making financiers attractive targets for licensing negotiations and litigation, particularly from licensing-focused entities.
Similar litigation could emerge in the EU and UK, particularly as the English courts have a strong reputation for handling complex claims in this area. A new UK Supreme Court approach to the patentability of computer-implemented inventions may also make it easier to obtain patents covering AI and software central to data centre operation, increasing the pool of patents and related litigation and licensing complexity.
The UPC's emergence
The Unified Patent Court (UPC) has also emerged as a powerful cross-border enforcement forum, having shown willingness to assert jurisdiction over alleged infringements outside UPC member states and over non-EU-domiciled defendants.
A single UPC action could result in a cross-border injunction or a central revocation affecting patents across multiple jurisdictions.
SEP disputes
Standard essential patents (SEPs) cover technology needed to implement industry standards such as the networking protocols that allow data centres to interoperate. These also pose a risk for data centre developers and investors. SEP holders are often required to license on fair, reasonable and non-discriminatory (FRAND) or reasonable and non-discriminatory (RAND) terms.
However, disputes over what these terms mean in practice are common, and as data centres rely increasingly on standardised technology, SEP disputes are expected to follow the pattern already seen in telecoms, with the English courts positioned as a leading venue for resolving them.
Patent risk is also becoming a material issue in transactions. Standard IP due diligence is complicated by layered technology stacks, multiple suppliers with varying contractual protections and the potential presence of SEPs. Mismatched infringement indemnity provisions across supplier contracts can leave gaps that only arise in the event of a dispute. These factors can affect valuation, deal structure and post-close integration. In a competitive market, deals that show a clear understanding and allocation of patent risk are likely to be more resilient.
Osborne Clarke comment
The data centre boom is creating significant and escalating patent exposure, compounded by these shifts in the UK and European legal landscape. Understanding where patent risk sits within the technology stack, conducting thorough IP due diligence, and securing appropriate contractual protections are essential to managing data centre investments responsibly and protecting returns.
Read the original, full version of this Insight by Osborne Clarke's IP Disputes Partner Tim Harris, "Data centre investors grapple with patent litigation", published in Infrastructure Investor.
