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| 1 minute read

Stop press: UK Supreme Court decision in Tesla v InterDigital & Avanci

The UK Supreme Court has today decided that the UK court has jurisdiction to determine claims challenging the FRAND rates offered by SEP holders as part of pool or platform joint licensing. In this case, Tesla had brought proactive proceedings to enforce the FRAND obligations of SEP holder InterDigital (a member of the Avanci 5G Platform) to seek a decision from the UK Court as to whether that Avanci 5G Platform licence rate is FRAND.  

The first instance court and Court of Appeal declined jurisdiction to determine Tesla's licensing claims, but the UK Supreme Court has now overturned the decision meaning that Telsa can now continue to pursue the claims before the English court.

Key findings by the UK Supreme Court: 

  • FRAND obligation on joint licensing: there is a serious issue to be tried that a SEP owner is subject to the FRAND obligation when choosing to offer a licence of their SEPs though a licensing pool or platform. 

  • FRAND licence to the whole platform: for an SEP owner that is a member of the platform, there is a serious issue to be tried as to whether the FRAND licence of their SEPs is a licence to the platform rather than a bilateral licence (i.e. Tesla has a real prospect of establishing that the only FRAND licence for InterDigital SEPs is a global licence to the Avanci 5G Platform). 

  • Declarations as to FRAND rate for the platform licence: Tesla has a real prospect of being granted the declarations it sought, including whether the Avanci 5G Platform rate is FRAND and, if not, what the FRAND rate is. 

  • Jurisdiction: the claims in question are properly characterised as concerning a FRAND licence in respect of InterDigital's UK SEPs, notwithstanding that Tesla argues that only a global platform-wide licence would be FRAND. As such, the UK court has jurisdiction over the claims. 

  • Appropriate forum: there is no more appropriate forum to determine the claims. In the parallel proceedings before the Delaware Court of Chancery, the court would not, on the balance of probabilities, determine a FRAND rate based on non-US patents. 

Conclusion 

In a change in tide, this decision shows that the licence rates for SEPs licensed on a pool or platform basis are not necessarily insulated from scrutiny of the courts. Whilst a decision on the merits is to come, this is the first step in allowing claims of this type can be brought in the UK and to pave the way for a new dimension of FRAND litigation.

Read the full judgment here.

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Tags

patent litigation, sep frand disputes, commentary