Tesla, Inc and another v InterDigital Patent Holdings, Inc and others; Tesla, Inc and others v InterDigital Patent Holdings, Inc and another No 2 [2026] UKSC 27

Tesla sought declarations in the English courts concerning FRAND terms for a 5G standard essential patent licence offered through Avanci's platform, including InterDigital's UK SEPs. The Supreme Court allowed Tesla's appeal, holding there was a serious issue to be tried and jurisdiction existed.

Facts

Tesla wished to launch 5G-enabled vehicles in the UK, its fourth largest market. To do so, it required licences under UK standard essential patents (SEPs) declared to the ETSI 5G standard. A significant proportion of relevant SEPs, including those owned by InterDigital (through IDPH), were made available through the Avanci 5G Platform, a licensing platform operated by Avanci as agent for over 65 SEP owners (Licensors). Avanci offered a global platform licence on standard terms (the SPLA) at a rate Tesla considered exceeded FRAND.

In December 2023, Tesla commenced proceedings seeking: (i) revocation of three UK patents owned by IDPH (the Challenged Patents); and (ii) declarations concerning FRAND terms, including that the Avanci 5G rack rate was not FRAND and that a lower FRAND rate should be determined. IDPH was served within the jurisdiction under CPR r 63.14(2); permission was granted to serve IDH and Avanci (both Delaware corporations) out of the jurisdiction.

Fancourt J struck out the Licensing Claims, holding there was no serious issue to be tried, and the Court of Appeal (Arnold LJ dissenting) dismissed Tesla’s appeal.

Issues

The Supreme Court considered:

• Whether there was a serious issue to be tried on the Licensing Claims against Avanci and InterDigital, including whether the FRAND obligation applies to offers made jointly through a platform, and whether a platform licence could be the only FRAND licence.
• Whether Tesla had a real prospect of being granted the declarations sought.
• Whether the Licensing Claims were validly served on IDPH under CPR r 63.14(2).
• Whether the claims against IDH passed through Gateway 3 or Gateway 11.
• Whether the Delaware Court of Chancery was an available and more appropriate forum.
• Whether permission to serve out should be refused as a matter of discretion.

Arguments

Tesla

Tesla argued that a SEP owner remains bound by its FRAND obligation to ETSI even when licensing through a platform, and that, given commercial reality, the only FRAND licence of InterDigital’s UK SEPs on the Avanci 5G Platform may be a platform licence at a FRAND rate. It contended it had a legitimate interest in seeking declarations against InterDigital (as SEP owner subject to the FRAND obligation) and Avanci (as its agent). Tesla also maintained a fallback claim to a bilateral licence.

InterDigital and Avanci

They argued the FRAND obligation applied only to each SEP owner’s own patents on a bilateral basis, and did not extend to collective platform licensing, which was a voluntary commercial alternative. Avanci itself owed no FRAND obligation, being a mere agent. They contended granting declarations would be procedurally unfair absent all Licensors being joined, that the claim was properly characterised as a worldwide licensing claim, that CPR r 63.14 was limited in scope, and that Delaware was the more appropriate forum.

Judgment

Serious issue to be tried

The Supreme Court (Lord Hamblen and Lord Kitchin, with whom Lord Sales, Lord Briggs and Lord Burrows agreed) held there was a serious issue to be tried. Nothing in the ETSI IPR Policy indicates the FRAND obligation ceases to apply when SEP owners license jointly through a platform. On the contrary, the policy against hold-up applies with equal or greater force to collective offers. Competition law considerations (EU and US) reinforce this: safe-harbour treatment of pools depends upon FRAND licensing.

Given commercial realities, including the impracticality of negotiating thousands of bilateral licences (a “licensing debacle” as Avanci itself acknowledged), and evidence that some Licensors rely on platform availability to discharge their FRAND obligations, Tesla had a real prospect of establishing that only a platform licence on FRAND terms would be FRAND for the UK SEPs.

Declaratory relief

The court reviewed the authorities on declarations, including Messier-Dowty, Rolls-Royce v Unite, Feetum v Levy, Milebush, and Nexus. The power is broad and discretionary; declarations may be made even where the rights are not vested in a party, provided the parties have a legitimate interest, the declaration serves a useful purpose, and it does not unfairly prejudice absent persons. Tesla’s claim rested on a real legal right (the FRAND obligation enforceable as a stipulation pour autrui under French law), distinguishing it from Vestel. Declarations would serve a useful purpose in providing commercial certainty and clarifying whether Avanci’s rate was in fact FRAND. Fairness concerns did not preclude the claim proceeding: Avanci is the essential party for determining platform terms, and individual Licensors could apply to participate.

Bilateral licence fallback

The Court of Appeal majority had erred: paragraphs 40 and 5 of the prayer sufficiently embraced a fallback claim to a bilateral licence.

Jurisdiction

Endorsing the line of authority beginning with Vestel, the court held the Licensing Claims should be characterised as being about the licensing of InterDigital’s UK SEPs on the Avanci 5G Platform. The fact a FRAND licence would be global did not alter the subject matter. Consequently:

• Service on IDPH under CPR r 63.14(2) was valid, as the claim “related to” its UK registered patents.
• IDH was a necessary or proper party under Gateway 3.
• Gateway 11 was also available since the claim related wholly or principally to property (UK patents) within the jurisdiction.

Forum

Fancourt J’s characterisation of the dispute as a global licensing claim was wrong, and this justified reconsideration of the expert evidence. On the evidence (particularly that of Professor Contreras, unchallenged in substance), the Delaware Court of Chancery would not adjudicate FRAND terms for foreign (UK) patents. Delaware was therefore not an available forum. The discretionary arguments to refuse permission were rejected.

Implications

The decision confirms and extends the English courts’ willingness to entertain implementer-led declaratory FRAND proceedings. It clarifies that:

• A SEP owner’s FRAND obligation to ETSI is not extinguished by choosing to license through a platform or pool; there is at least a serious issue to be tried that platform licences may be required to be FRAND.
• Where commercial realities render bilateral licensing impracticable and Licensors rely on platform licences to discharge FRAND obligations, only a platform licence on FRAND terms may satisfy that obligation.
• Declaratory relief may be granted concerning FRAND terms of a platform licence even where the platform operator (Avanci) is not itself subject to the FRAND obligation, provided it is the agent of SEP owners who are.
• Implementer FRAND claims relating to UK SEPs are properly characterised as concerning UK property, engaging CPR r 63.14, Gateway 3 and Gateway 11, notwithstanding that the licence sought is global.
• The Delaware Court of Chancery will not typically be an available alternative forum where the claim concerns foreign (UK) patents.

The judgment is significant for all industries reliant on standards (cellular, IoT, audiovisual, connected health, clean energy). It reinforces the English courts’ role as a forum for resolving global FRAND disputes and constrains the ability of SEP owners and platform operators to insulate collective licensing arrangements from FRAND scrutiny. The court cautioned that many issues, including the joinder or participation of other Licensors, remain matters for case management, and it did not decide the ultimate FRAND rate or whether platform licensing is required to be FRAND in all cases—only that Tesla has a real prospect of so establishing.

Verdict: The Supreme Court allowed Tesla’s appeal, holding that there is a serious issue to be tried on the Licensing Claims against both InterDigital and Avanci, that the English courts have jurisdiction (service on IDPH under CPR r 63.14(2) was valid, and Gateways 3 and 11 are available in respect of IDH), that the Delaware Court of Chancery is not an available alternative forum, and that permission to serve out should not be refused as a matter of discretion.

Source: Tesla, Inc and another v InterDigital Patent Holdings, Inc and others; Tesla, Inc and others v InterDigital Patent Holdings, Inc and another No 2 [2026] UKSC 27