Tesla Inc & Anor v InterDigital Patent Holdings, Inc & Ors

The Court of Appeal (majority) dismissed Tesla's appeal against the judge's jurisdictional orders. The panel held that the English courts do not have a contractual basis to determine and impose FRAND licence terms for a collective/licence offered by a platform operator (Avanci) in respect of the pooled SEPs: the ETSI IPR Policy (clause 6.1) creates enforceable bilateral obligations of SEP owners to offer licences on FRAND terms but does not convert those owners' individual undertakings into a contractual obligation binding a platform operator or converting the platform licence into an obligatory collective FRAND licence. The court therefore concluded there was no serious issue to be tried against Avanci (and no basis for declaring the Avanci 5G Platform licence non-FRAND) and that a representative claim purporting to bind other pool members through one defendant was inappropriate under CPR r.19.8.

Subsidiary rulings included discussion of service out under CPR r.63.14(2) in respect of patent-based claims (the Patent Claims against IDPH remained properly served) and principles for service out (Practice Direction 6B gateways) and forum non conveniens analysis; the majority found there was no available alternative US forum for the pool-wide FRAND determination but nonetheless concluded that Tesla had no arguable legal basis to compel a platform licence on FRAND terms.

This appeal concerned whether the English courts have jurisdiction to determine FRAND licence terms for a worldwide, platform-style licence offered by Avanci covering SEPs declared essential to ETSI standards. Tesla (implementer) sought declarations that the $32 per-vehicle Avanci 5G Platform rate is not FRAND and a determination of FRAND terms, together with patent invalidity/inessentiality declarations in respect of certain InterDigital patents.

Background and procedural posture

• Tesla issued proceedings in the Patents Court seeking (i) revocation/invalidity or inessentiality declarations in respect of three InterDigital patents (the Patent Claims) and (ii) declarations and a determination as to FRAND terms for a licence covering the UK SEPs within the Avanci 5G Platform or, alternatively, the Challenged Patents (the Licensing Claims).
• Mellor J originally granted without-notice permission to serve out; Fancourt J later set aside service on most defendants except IDPH in relation to the Patent Claims, struck out some Licensing Claims and refused to permit the Licensing Claims to proceed against InterDigital as representative of other platform members.
• Tesla appealed Fancourt J's jurisdictional orders to the Court of Appeal.

Issues framed by the court

• Whether the Patents Court can make declarations and determine FRAND terms in relation to a platform/pool licence offered by Avanci where Avanci has given no FRAND undertaking and many licensors are not parties.
• Whether Avanci or InterDigital are properly before the English court (service out under CPR r.63.14(2) and Practice Direction 6B gateways, including gateway (11)).
• Whether the Licensing Claims could proceed on a representative basis under CPR r.19.8.
• Whether the Delaware Court of Chancery or other US courts were an available and more appropriate forum.

Court’s reasoning (concise)

• The majority (Phillips LJ and Whipple LJ) held that ETSI clause 6.1 creates a contractual undertaking by each SEP owner to ETSI enforceable for the benefit of implementers, but it does not create an obligation on licensors to agree a collective Avanci platform licence or to require a platform operator to adopt FRAND pricing; therefore there was no contractual foundation to allow the English court to adjudicate and impose FRAND terms against Avanci or to compel a collective/platform licence.
• The majority held that Tesla’s claim for declarations as to the Avanci 5G Platform licence lacked the necessary legal standard: there is no free-standing FRAND cause of action against a platform operator or against non-participating licensors as a body; declaratory relief in those circumstances would not be appropriate and would risk unfairness to absent SEP owners.
• The majority also considered procedural fairness and representative-proceedings principles (CPR r.19.8 and Lloyd v Google) and concluded it was inappropriate to order a single member (InterDigital) to represent other platform members; the judge’s refusal to permit representative proceedings was upheld.
• The Court examined private international law issues (service out under r.63.14, gateways, forum conveniens) and expert evidence on US jurisdiction, and concluded the Delaware forum was not plainly available for a pool-wide FRAND determination; however, that factual finding did not assist Tesla because the core legal proposition they advanced failed.

Appeal dismissed. The majority held there was no serious issue to be tried in respect of Tesla's claim to a FRAND platform licence against Avanci or to compel a collective FRAND licence of the Avanci 5G Platform: ETSI clause 6.1 gives rise to enforceable bilateral undertakings of SEP owners but does not furnish a contractual basis to require a platform operator or other SEP owners collectively to grant a single FRAND platform licence. The court therefore upheld the judge’s refusal to permit representative proceedings under CPR r.19.8 and largely upheld his jurisdictional orders (including the limitations on service out).

Appeal from the High Court of Justice, Business and Property Courts of England and Wales, Intellectual Property List (ChD), Patents Court (Fancourt J) [2024] EWHC 1815 (Pat). Mellor J had earlier granted without-notice permission to serve out. Permission to appeal was granted; the Court of Appeal heard the appeal and dismissed it on 6 March 2025 ([2025] EWCA Civ 193).