Background
Tesla wished to launch 5G-enabled vehicles in the United Kingdom. InterDigital owned UK standard-essential patents subject to undertakings to license on fair, reasonable and non-discriminatory terms. InterDigital also participated in Avanci’s global 5G licensing platform, through which Avanci offered vehicle manufacturers a single licence covering the participating owners’ 2G–5G patents.
Tesla alleged that Avanci’s platform royalty was too high and sought declarations concerning its entitlement to a FRAND licence, whether the platform’s standard rate was FRAND, and what a lower FRAND rate should be. The High Court struck out those licensing claims, and a majority of the Court of Appeal affirmed, concluding that there was no serious issue to be tried against InterDigital or Avanci. Tesla appealed, while InterDigital cross-appealed on jurisdictional issues.
The Court’s Holding
The Supreme Court unanimously allowed Tesla’s appeal and dismissed InterDigital’s cross-appeal. It held that Tesla had a real prospect of establishing that InterDigital’s FRAND obligation continued to apply when its patents were offered collectively through Avanci and that, for InterDigital’s UK patents on the platform, only a global platform licence at a FRAND rate might satisfy that obligation. Tesla also had a real prospect of obtaining useful declarations against both InterDigital and Avanci, even though Avanci had not itself undertaken a FRAND obligation and Tesla asserted no cause of action against it.
The Court held that the claims were properly characterized as concerning the FRAND terms for licensing InterDigital’s UK patents, notwithstanding Tesla’s contention that the appropriate licence must cover the global platform. IDPH was validly served under CPR r 63.14(2); IDH could be served abroad under Gateways 3 and 11; and Avanci was a necessary or proper party. The Delaware Court of Chancery was not an available alternative forum because it would not determine a FRAND rate based on the UK patents at issue. The ruling permits Tesla’s claims to proceed; it does not decide whether Avanci’s rate is FRAND or prescribe the ultimate licence terms.
Key Takeaways
- A SEP owner does not escape its FRAND obligation by offering its patents jointly with other owners through a licensing platform.
- An implementer may seek declaratory relief testing a platform licence and rate without joining every participating patent owner at the jurisdictional stage.
- A claim seeking global FRAND terms may still principally concern UK patents, supporting English jurisdiction and service under the applicable procedural rules.
Why It Matters
The decision opens the English courts to implementer-led challenges concerning collective SEP-licensing platforms, extending established FRAND principles beyond bilateral licensing disputes. Patent owners may remain answerable for the FRAND character of a platform offer on which they rely, while platform operators may be joined when their participation is necessary to evaluate the challenged rate.
The judgment is procedural rather than a final rate determination. Tesla must still prove at trial that its requested platform-wide licence is required by InterDigital’s FRAND obligation and that Avanci’s existing terms are not FRAND.