Tesla wins the UK 5G patent case, expected to promote the launch of connected cars

The UK Supreme Court on Monday overturned two previous unfavorable rulings, deciding that Tesla can continue to seek fair licensing terms for 5G standard essential patents from InterDigital and the patent licensing platform Avanci. This ruling clears a key legal hurdle for Tesla's plans to launch 5G-connected cars in the UK.

The core dispute of the case revolves around whether the rates for standard essential patents, when collectively licensed through patent pools or platforms like Avanci, still need to be subject to the review of the "fair, reasonable, and non-discriminatory" (FRAND) principle. Avanci had previously proposed a fixed licensing fee of $32 per vehicle to Tesla and refused to negotiate. Tesla argued that this rate was too high and filed a lawsuit in the London High Court in 2023, seeking a court ruling on a reasonable rate.

The High Court and the Court of Appeal both rejected Tesla's request for a FRAND rate ruling, stating that UK courts had no jurisdiction over the matter. However, the Supreme Court unanimously supported Tesla's appeal in the final ruling, stating that the act of patent owners placing their patents into the Avanci platform does not exempt them from fulfilling their FRAND commitments to the European Telecommunications Standards Institute. The court further determined that obtaining a global portfolio license through the Avanci platform might be Tesla's only viable option, thus granting UK courts the jurisdiction to hear the case.

This ruling is seen as a significant expansion of UK court jurisdiction on FRAND issues, confirming for the first time the possibility of jurisdiction over global patent pool licensing rate setting. The case will be sent back to the High Court for substantive hearing, where it will determine whether Avanci's charge of $32 per vehicle truly complies with FRAND standards. This ruling could have far-reaching implications for the entire automotive industry, providing important references for other automakers facing similar patent licensing issues