UK Supreme Court Allows Tesla to Challenge Avanci’s 5G SEP Platform Rate

On July 27, 2026, the U.K. Supreme Court unanimously allowed Tesla to pursue claims in England seeking a determination of whether the royalty offered through the Avanci 5G licensing platform is fair, reasonable, and non-discriminatory (FRAND). Tesla, Inc. v. InterDigital Patent Holdings, Inc., [2026] UKSC 27.

The decision is a jurisdictional ruling, not a merits ruling. Nonetheless, because it opens the door to English court scrutiny of patent pool and platform rates, which is a question no court had squarely reached, it is likely to influence how standard essential patent (SEP) portfolios are licensed and where disputes about them are filed.

Background

Tesla sought to launch 5G-enabled vehicles in the U.K., which it understood would require licenses to patents declared essential to ETSI telecommunications standards. ¶ 41. Roughly 170,000 patents have been declared essential to 5G; about 7% of them (approximately 11,900) are U.K. patents. ¶ 35. Bilateral licensing at that scale is impractical for many and, as a result, some in the automotive industry have turned to the Avanci 5G platform. Avanci offers vehicle manufacturers a single global license to a number of potentially relevant portfolios at a standard rate. By the time of the Supreme Court hearing, the platform covered 89 licensors and 86 vehicle brands, the equivalent of more than 7,500 bilateral licenses. ¶ 73. InterDigital is among the licensors.

In December 2023, Tesla sued InterDigital and Avanci in the English Patents Court. ¶ 42. Alongside challenges to the validity and essentiality of three U.K. patents, Tesla sought declarations that it is entitled to a FRAND license to InterDigital's U.K. SEPs, that such a license must be a global platform license, that Avanci’s standard royalty rate is not FRAND, and that the court should determine the FRAND rate. Id.

The central question was whether an SEP owner's ETSI licensing obligations continue to apply when it licenses through a platform rather than bilaterally. ¶ 25.

Holding

FRAND obligations do not disappear in a licensing platform

The Supreme Court held there is a serious issue to be tried that the FRAND obligation continues to apply, observing that the FRAND obligation was not drafted so as to be confined to bilateral licensing, and that pools and platforms are an established response to the impracticality of bilateral licensing. ¶¶ 83, 84. It also relied on the competition policy context in which the ETSI intellectual property rights policy was developed and the anti-hold-up rationale underlying the requirement that ETSI SEP holders license on FRAND terms. ¶¶ 86, 84.

A platform license may be the only FRAND license

The Court found that Tesla has a real prospect of establishing that the only FRAND license of InterDigital's U.K. SEPs is a platform license. ¶ 96. The reasoning was practical: Where it is not realistically possible for an implementer to negotiate bilateral licenses with every platform licensor, that is "a powerful factor" supporting the conclusion that only a platform license can be FRAND. ¶ 97. The Court also treated the parties' own commercial conduct as relevant, including that many licensors rely on the platform license as discharging their FRAND obligations. Id.

Claims against Avanci can proceed

The Court also allowed Tesla’s claims against Avanci to move forward. Avanci does not own SEPs and "is not itself subject to any FRAND obligation" via ETSI ¶ 132. Notwithstanding that finding, because the licensors are bound and Avanci acts as their licensing agent, the Court held that Tesla has a real prospect of success on its claims against Avanci, describing Avanci as "the essential party in any assessment by the court." ¶¶ 132, 142.

England remains a leading FRAND forum

The Supreme Court further held that Tesla’s claims are properly characterized as disputes concerning the licensing of U.K. SEPs, even though any FRAND license may have global scope. ¶ 177. As a result, the English courts have jurisdiction to hear the dispute. The Court agreed that Delaware was not shown to be an available alternative forum for determining the FRAND terms associated with the U.K. patent rights at issue. ¶ 216.

Practice takeaways

• No final judgment yet. The Court decided the issues on a "real, not fanciful" prospect of success standard. Characterizing the ruling as a holding that pool rates are subject to FRAND obligations overstates it.
• Where patents are registered can drive where disputes are heard. Service under CPR r. 63.14(2) at a U.K. register address for service brought the licensing dispute into England. Portfolio holders should understand how their U.K. registrations, addresses for service, and corporate structure map onto that exposure; implementers should consider the same facts as opportunities.
• Filing order no longer drives characterization in England. The Court's rejection of a "who fired first" distinction reduces the value of a purely defensive filing race in the U.K. Timing still matters elsewhere, and anti-suit and anti-anti-suit practice, interim-license applications, and parallel Unified Patent Court (UPC) proceedings are unaffected.
• Whether bilateral licensing is genuinely practicable is a live factual issue. Impracticability of bilateral negotiation was at the core of the "only FRAND license" argument. Parties on both sides should build a record now on responsiveness to bilateral requests, actual bilateral licenses granted, and the real-world cost of portfolio-by-portfolio negotiation.
• Public statements about FRAND compliance are now evidence. The Court leaned on what licensors and the platform say and do. This includes reliance on the platform license as discharging the ETSI FRAND obligation. Pool marketing materials, licensor communications, and negotiation correspondence should be reviewed with the understanding that they may be used to establish (or resist) the proposition that the platform license is the only FRAND license.
• Pool administrators can be brought into English proceedings without their own FRAND commitments. Agency was enough at the threshold. Pool participants may want to revisit governance documents: who sets the rate, what consent rights licensors hold, how the agency relationship is documented, and what indemnity and cost-sharing arrangements apply if the administrator is named.
• Absent licensors remain an open problem. The absence of the other 88 licensors was not fatal at the jurisdiction stage, but the Court left evidential and fairness questions for trial. Watch how the Patents Court handles joinder, the practical mechanics of valuing a multi-licensor platform on the evidence of one licensor, and whether any rate determination can meaningfully bind non-parties.
• A U.S. forum may not be a substitute. The Court's view that U.S. courts would likely decline to set rates for foreign patents limits the value of forum-selection strategies built around U.S. litigation or submission to U.S. courts, at least where U.K. patents are in the mix.

What to watch

The Patents Court trial will be the first substantive test of whether a pool rate can be adjudicated as FRAND, and how. Also worth watching: whether other implementers file comparable claims against other platforms; whether platforms adjust their structures, terms, or licensor agreements in response; how the EU's evolving SEP policy and the UPC interact with an English forum that has now confirmed its reach over platform licensing; and whether SEP owners reconsider the balance between bilateral and pool licensing.