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

An undertaking under the ETSI intellectual property policy obliges each standard-essential patent owner to license its own patent portfolio on FRAND terms. It does not oblige owners to offer a collective licence covering patents belonging to other owners.

An English court cannot determine FRAND terms for a worldwide platform licence without a contractual or other legal standard supporting an entitlement to that licence. Commercial convenience and the prospect that a declaration might influence the platform administrator do not supply the missing legal basis. A claim seeking such relief discloses no serious issue to be tried where the administrator assumed no FRAND obligation and the patent owners retained the bilateral licensing route.

Tesla wished to launch 5G-enabled vehicles in the United Kingdom. It accepted that it needed licences under standard-essential patents offered collectively through Avanci's worldwide 5G platform, but alleged that Avanci's fixed royalty was not FRAND. Tesla sought declarations determining FRAND terms for a worldwide platform licence.

Avanci had given no FRAND undertaking. Each participating patent owner had separately undertaken under the ETSI policy to license its own patent family on FRAND terms and remained free to negotiate bilaterally. Fancourt J, in [2024] EWHC 1815 (Pat), set aside service of the Licensing Claims, struck out those claims against one InterDigital entity so far as necessary, and refused representative proceedings against the platform members.

The central question was whether Tesla had a real prospect of obtaining declarations about the terms of the collective platform licence despite having no legally enforceable right to that licence from Avanci or the participating owners.

1. Appeal dismissed by a majority. Phillips LJ and Whipple LJ held that Tesla had no serious issue to be tried concerning the Avanci 5G Platform licence. Arnold LJ dissented and would have restored permission to serve the Licensing Claims, except in relation to representative proceedings.
2. The ETSI undertaking is bilateral. Each patent owner undertakes to negotiate and grant a FRAND licence of its own declared patent family. It does not undertake to license patents collectively with unrelated owners or to offer a discounted platform-wide licence. Participation in the Avanci platform does not extend or transpose that undertaking. Avanci assumed no member's FRAND obligations and retained only the authority conferred by its management agreement: per Phillips LJ at [222]–[231] and Whipple LJ at [249]–[252].
3. The contractual undertaking supplies the jurisdictional foundation for an English court to determine a worldwide FRAND licence including foreign patents. Without a contractual or other applicable legal standard supporting the particular licence claimed, there is no free-standing FRAND claim. Commercial reality, convenience and the prospect that a declaration might cause Avanci to revise its price could not create that foundation: per Phillips LJ at [232]–[236] and Whipple LJ at [248]–[255], applying Unwired Planet [2020] UKSC 37 and Vestel [2021] EWCA Civ 440.
4. Tesla could accept Avanci's platform licence or seek bilateral FRAND licences from individual owners. It could not combine those alternatives by importing the owners' FRAND obligations into Avanci's distinct commercial offering. The declarations sought therefore had no real prospect of being granted.
5. A bilateral FRAND claim against InterDigital was not properly within the appeal. Tesla's pleaded case, written appeal and undertaking were directed to the platform licence. Its attempt to introduce a bilateral alternative during oral argument came too late and did not amend the claim or grounds: per Phillips LJ at [240]–[241] and Whipple LJ at [243]–[245].
6. The court agreed that Fancourt J was entitled to refuse an order compelling InterDigital to represent the other platform members. Such an order could bind members against whom jurisdiction could not individually be established and would involuntarily impose substantial responsibilities and costs on InterDigital: [182]–[205], [239].

1. Court of Appeal (Civil Division): By a majority, dismissed Tesla's appeal. The refusal to permit representative proceedings was unanimously upheld. Arnold LJ dissented on the remaining Licensing Claims: [2025] EWCA Civ 193.
2. High Court, Patents Court: Fancourt J set aside service of the claim form except for service relating to the Patent Claims, rejected the proposed representative Licensing Claims, and refused permission to amend: [2024] EWHC 1815 (Pat).