UK Supreme Court Opens the Door for Implementers to Challenge Patent Pool Royalty Rates in English Courts
On July 27, 2026, the UK Supreme Court ruled in Tesla, Inc. v. InterDigital Patent Holdings, Inc. [2026] UKSC 27 that English courts have jurisdiction to determine whether the royalty rate charged by Avanci's 5G vehicle patent licensing platform, which launched in August 2023, is "fair, reasonable, and non-discriminatory" (FRAND). This reversed lower court decisions that had blocked Tesla's challenge to Avanci's 5G Platform for use in connection with 5G-enabled vehicles. This vehicle platform pools patents from approximately 89 standard essential patent (SEP) owners—including Ericsson, Nokia, Qualcomm, Samsung, Huawei, and InterDigital—and licenses at a flat rate of $32 per vehicle.
What the Court Held
The UK Supreme Court held that Tesla had established a serious issue to be tried on whether a SEP owner, such as InterDigital, remains bound by its FRAND obligation so far as it may choose to join a pool or platform, such as Avanci's 5G vehicle platform. The UK Supreme Court reasoned that "as a starting point, the FRAND obligation is undertaken by each patent owner as a condition of having the patent and the technology it describes adopted as part of the relevant standard," such that there is no basis "for concluding that the FRAND obligation ceases to apply" if two or more patent owners choose to offer a license of their patents through a licensing agent. The UK Supreme Court also held that Tesla had established a serious issue to be tried on whether the only FRAND license of InterDigital's UK SEPs on Avanci's 5G vehicle platform is a license extending to the whole Avanci 5G Platform.
Why This Matters
The ruling's implications extend well beyond the automotive industry, as the UK Supreme Court noted the importance of technical standards in other fields such as digital communications, telecommunications, consumer electronics, and semiconductors. This case further underscores that pool and platform licensing is becoming more pervasive across technology sectors, with global implications.
What You Should Do
- Implementers: Review dispute strategy with IP counsel. Companies implementing standard-essential technology should discuss with their IP counsel how expanded English court jurisdiction over global pool disputes may affect licensing negotiations, existing agreements, and litigation posture down the road. They should also continue to monitor this case as the merits of the FRAND rate-setting issues play out at trial.
- SEP Owners: Assess and monitor FRAND issues and SSOs in your industry. Current SEP patent owners as well as innovators involved in developing standard-based technology should continue to monitor the situation closely with their IP counsel, with an eye on targeting patent assets that are or may become subject to FRAND obligations. This monitoring should include a renewed focus on the standard-setting bodies and organizations (SSOs) within your industry and how FRAND obligations may arise.
The case remains ongoing, with the merits of the FRAND issues to be tried.
For more information on SEP licensing and dispute strategy, please contact Chris Clayton, Austin Diehl or the Stinson LLP contact with whom you regularly work.
