In a landmark ruling that carries substantial implications for the future of technology licensing, Tesla has successfully revived its London lawsuit against InterDigital and the patent licensing platform Avanci. The case, which centres on obtaining a licence for 5G patents ahead of the automaker’s planned launch of next-generation vehicles in Britain, was greenlit by the United Kingdom’s Supreme Court on Monday. This decision overturns previous rulings and marks a pivotal moment in how standard-essential patents (SEPs) are licensed across industries.
The dispute began in 2023 when Tesla filed a claim at London’s High Court against InterDigital, a U.S. technology firm, and Avanci, a platform that licenses patents from multiple owners primarily for automotive applications. The crux of the matter lies in Tesla’s request for the court to determine the fair, reasonable, and non-discriminatory (FRAND) terms for a licence covering patents owned by holders including InterDigital. This legal manoeuvre was a strategic prerequisite for Tesla as it prepares to integrate 5G capabilities into its vehicles for the British market, which ranks as its fourth-largest globally.
The journey through the judicial system has been a protracted one. Initially, InterDigital and Avanci successfully argued to have Tesla’s bid for a FRAND determination dismissed. In 2024, the High Court ruled in favour of the defendants, although it did allow Tesla’s separate claim to revoke three of InterDigital’s patents to proceed. Undeterred, Tesla pursued an appeal, which was also unsuccessful at the Court of Appeal. The case then ascended to the Supreme Court, with the automaker receiving support from interveners including the technology lobbying group CCIA and the Motion Picture Association.
The Supreme Court’s judgment was decisive. The justices ruled that patent owners cannot absolve themselves of their obligations to licence on FRAND terms simply by joining a patent pool or platform. This principle is now central to the case, effectively dismantling the primary legal argument put forward by Avanci and InterDigital. Consequently, the case is expected to be remitted back to the High Court for further proceedings.
The core of the disagreement revolves around the financial terms of the licence. Avanci has offered a flat-rate pool fee of $32 per vehicle for access to its 5G platform, which aggregates patents from nearly 89 different owners and covers approximately 86 brands. Tesla, however, has consistently maintained that this non-negotiable rate is disproportionately high and fails to meet the criteria of a FRAND licence, arguing that it far exceeds a reasonable cost for the essential technology. The Supreme Court has accepted that there is a serious issue to be tried on this matter, clearing the path for a detailed examination of whether the demanded rate is indeed FRAND-compliant.
This ruling carries significant weight beyond the immediate parties. It represents the first instance of a court outside China confirming its jurisdiction to set a FRAND rate for a global patent pool licence. The implications are extensive, touching upon licensing practices in telecommunications, consumer electronics, streaming services, and the Internet of Things—sectors where patent pools have become increasingly prevalent. The judgment introduces a critical nuance to the interpretation of FRAND obligations, suggesting that the availability of a pooled licence does not negate the underlying obligation of patent holders to offer terms that are fair and reasonable.
One of the key arguments that appears to have resonated with the Supreme Court is the commercial reality of bilateral licensing. Tesla contended that negotiating separate licences with nearly 90 different SEP holders for thousands of patents is not a viable option in practice. The court acknowledged this position, accepting that for many implementers, bilateral licensing is not a realistic alternative, especially when platforms like Avanci position their bundled offerings as the primary means of securing a licence. This consideration underscores the evolving nature of patent licensing in a hyper-connected technological landscape.
