Tesla v InterDigital: Supreme Court revives FRAND claim over 5G patent licensing platform

The Supreme Court has restored Tesla's challenge to the licensing terms of a major 5G patent platform, ruling that car manufacturers and other implementers can bring proceedings testing whether rates set by patent pool operators comply with fair, reasonable and non-discriminatory licensing obligations, even where those operators have given no direct undertaking to standard-setting bodies themselves.

In Tesla, Inc and another v InterDigital Patent Holdings, Inc and others [2026] UKSC 27, Lord Hamblen and Lord Kitchin, giving the judgement of the court with which Lord Sales, Lord Briggs and Lord Burrows agreed, overturned a majority decision of the Court of Appeal and held that Tesla has a real prospect of success in its claim that the rate charged by Avanci, which operates a platform licensing the standard essential patents of more than sixty companies for use in 5G-enabled vehicles, is not FRAND.

Tesla wishes to launch 5G-enabled vehicles in the UK, its fourth-largest global market, and sought declarations concerning the terms of a licence to InterDigital's UK patents, which are among those made available through the Avanci 5G Platform. Tesla's case is that the FRAND obligation InterDigital undertook to the European Telecommunications Standards Institute when its patents were declared essential does not disappear simply because InterDigital chooses to license through a collective platform rather than bilaterally, and that in practice, given the impracticality of negotiating thousands of individual licences, only a platform licence at a FRAND rate can satisfy that obligation.

The Court of Appeal's majority had held that no serious issue arose, reasoning that patent owners had never agreed to license collectively with others and that Avanci, which owns no patents itself and has given no undertaking to ETSI, could not be bound by any FRAND requirement. The Supreme Court rejected this analysis, finding it answered a case Tesla was not making. Tesla does not contend that SEP owners are obliged to license collectively, only that choosing to do so through an agent does not release them from an obligation they have already undertaken. The judgement noted that Avanci itself publicly maintains its rates are FRAND, that numerous licensors have relied on the platform's existence to satisfy their own FRAND commitments, and that the practical impossibility of negotiating thousands of bilateral licences, something Avanci's own counsel described as a "licensing debacle", strongly supports treating the platform licence as the only realistic FRAND option in this market.

The court also revived Tesla's fallback claim to a bilateral licence directly from InterDigital, finding the Court of Appeal wrongly concluded this had not been properly pleaded, and rejected arguments that fairness required all sixty-plus platform licensors to be joined before any assessment of the platform rate could proceed, noting individual licensors remain free to apply to participate.

On jurisdiction, the court upheld a now well-established line of authority, beginning with the Court of Appeal's earlier decision in Vestel v Access Advance, that a claim concerning the FRAND terms of a licence to UK patents remains a claim about UK property even where the FRAND licence in question would necessarily be global in scope. This meant Tesla's proceedings were validly served on InterDigital's patent-holding entity at its UK address for service, and that InterDigital's parent company and Avanci were properly joined as necessary parties. The court further found, based on expert evidence, that the Delaware Court of Chancery, the alternative forum proposed by the defendants, was not in fact available to determine a dispute concerning UK patent rights, since US courts have consistently declined jurisdiction over the validity or licensing terms of foreign patents.

The appeal was allowed, meaning Tesla's proceedings against InterDigital and Avanci can now proceed to a full FRAND determination.