Tesla has won a significant legal victory in the UK Supreme Court that could reshape how global disputes over 5G and other cellular standard-essential patents are resolved, with implications for manufacturers of connected vehicles and IoT devices.
The ruling revives the electric vehicle maker’s lawsuit against US wireless technology developer InterDigital and patent licensing platform Avanci, allowing Tesla to ask the English courts to determine fair, reasonable and non-discriminatory (FRAND) licensing terms before taking a licence for cellular technology.
The case is being closely watched across the IoT industry because virtually every product that connects to a cellular network – from connected cars and smart meters to industrial gateways, asset trackers and other IoT devices – relies on standard-essential patents (SEPs). How those patents are licensed directly affects manufacturers’ costs and the speed at which connected products can be brought to market.
Tesla launched the case in London’s High Court in 2023 as it prepared to introduce 5G-enabled vehicles in the UK. The company sought a court determination of FRAND terms for a licence covering patents owned by companies including InterDigital and made available through Avanci’s automotive licensing platform.
InterDigital and Avanci argued the case should be dismissed, and the High Court agreed in 2024. Tesla’s appeal was subsequently rejected by the Court of Appeal before the company took its case to the UK Supreme Court.
In a unanimous judgment, the Supreme Court ruled that patent holders do not lose their obligation to offer FRAND licences simply because they license their patents through a patent pool or licensing platform. The ruling means Tesla’s claim can now return to the High Court.
Joel Smith, Partner at Simmons & Simmons, said the judgment reinforced the UK’s position as a venue for resolving international patent licensing disputes.
“This is a major ruling from the UK Supreme Court on Tesla and Avanci which demonstrates that the UK courts can intervene and resolve global patent and complex fair, reasonable, and non-discriminatory (FRAND) licensing rows, especially in the tech sector,” he said. “It shows, once again, that UK judges are prepared to offer practical solutions, rather than leaving companies to rely on the threat of cross-border injunctions.”
Abdelaziz Khatab, Partner at Simmons & Simmons in Paris, said the ruling also carried important lessons for companies involved in licensing negotiations over standard-essential patents.
“Businesses caught up in similar Standard-Essential Patent (SEP) disputes – especially where they are accused of using technology for long periods without a licence – should treat these hearings very carefully,” he said. “It’s important that businesses consider the commercial realities of their industry, back up their position with clear evidence, and stay flexible in negotiations.”
The decision reinforces the role of the English courts in resolving international disputes over standard-essential patents. For IoT device makers and automotive companies, it could strengthen the position of manufacturers seeking greater transparency over the cost of licensing cellular technologies. As 5G connectivity becomes more widely embedded in vehicles, industrial equipment and smart infrastructure, the outcome of FRAND disputes is likely to have an increasing influence on the economics of deploying connected products.
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