The UK Courts are in the spotlight again for FRAND litigation with the appeal hearing for Tesla v Avanci and InterDigital is listed to be heard by the Court of Appeal today and tomorrow (2nd and 3rd December 2024).
Tesla are revving up for the next round of their dispute with patent pool provider, Avanci, and patent owner, InterDigital, where Tesla will argue that the court should overturn the High Court's decision to dismiss the claims due to jurisdictional issues.
For those who have not been submerged in patent pool litigation here is a brief recap of the dispute:
Tesla brought a claim in the UK High Court against Avanci and InterDigital for declaratory relief on fair, reasonable and non-discriminatory (FRAND) terms for a patent pool licence. On 15 July 2024 the High Court ruled against Tesla and dismissed the claim on the basis that it did not have jurisdiction over the licensing claims or that they should be struck out. Tesla had also brought collateral patent claims against InterDigital that were stayed.
Avanci, a company headquartered in Texas, operates a licensing platform that offers automotive manufacturers patent pool licences for 2G, 3G, 4G and 5G technology. InterDigital owns several 5G patents licensed under Avanci's patent pool. InterDigital was joined to the action as a representative of the companies who license their patents through Avanci's patent pool.
Tesla previously dipped its toes in Avanci's patent pool and held a license for a pool of 2G, 3G and 4G patents. Now, Tesla wants to introduce 5G technology to its cars and has sought a licence for the 5G standard essential patents (SEPs) on Avanci's platform. Avanci offered a rate of $32 per vehicle for a license of approximately 170,000 patents from 65+ patent owners. Tesla disputes this rate and asked the UK court to determine a global FRAND rate for the entire patent pool.
Avanci disagrees with Tesla and argues that although bilateral license agreements for a SEP must be on FRAND terms, Avanci is not a patentee and therefore is not bound by the requirement under ETSI (the telecoms regulator) to offer a licence on FRAND terms. It further argues that the platform licence is a commercial alternative to obtaining bilateral licences with each patentee.
Unfortunately, these arguments could not be fully considered as Avanci and InterDigital successfully argued that there was not a strong enough connection to the UK for the UK court to have jurisdiction. Both companies are headquartered in the U.S. and some Avanci licensors may not hold a single UK patent.
Mr Justice Fancourt, the judge at first instance, was sympathetic to Tesla's desire for judicial guidance on whether Avanci's pool license terms (including the $32 rate) are FRAND, and seemingly would have applied the UK SEP case law, as UK courts have but could not get over the jurisdictional issues at play.
The wheels are in motion for the latest instalment of this dispute and we are excited to see where this road takes us…
It may seem odd that a claim which Tesla has a legitimate interest in pursuing and which would in principle serve a proper purpose cannot be pursued here. The conclusion that it cannot has given me some concern. It would be very odd indeed if Tesla could not obtain a decision on its claim in any jurisdiction that is reasonably suitable.
https://www.judiciary.uk/wp-content/uploads/2024/07/Tesla-v-InterDigital-15.07.24.pdf
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