Tesla’s UK Supreme Court Win Draws Hollywood Into a Patent Fight

The UK’s Supreme Court ruled unanimously on Monday that Tesla can keep fighting to prove a $32-per-vehicle patent licensing fee is not fair, reasonable or non-discriminatory. The decision reverses two lower court losses and revives a case Tesla filed in London back in December 2023.

Two unexpected groups were watching too. Hollywood’s Motion Picture Association and the Computer & Communications Industry Association (CCIA), a Washington trade group backed by technology platforms including Google and Apple, both filed written submissions backing Tesla, wagering that the outcome reaches well past one company’s dashboard.

Supreme Court Sides With Tesla After a Two-Year Fight

At the center of the case was a narrow but consequential legal question: whether English courts have jurisdiction to set FRAND terms for a pool license offered by an intermediary, rather than by a patent owner negotiating directly.

The justices overturned rulings from both the High Court and the Court of Appeal, which had each sided with InterDigital, a US wireless patent licensing firm, and Avanci, the platform that bundles InterDigital’s patents together with dozens of other companies’ 5G patents into a single license for automakers.

Legal analysis from Blackstone Chambers, a London barristers’ set that tracks FRAND litigation, shows the court held that Tesla has a real prospect of successfully arguing that FRAND duties attach to a pool license offer, and that a court can properly grant a declaration settling the point. Owning patents through a pool, the judges concluded, does not let a company escape the underlying promise to license fairly.

The Flat $32-a-Car Rate That Tesla Rejected

Avanci packages 5G patents from dozens of owners into one license and offers it to automakers on a flat, non-negotiable basis, $32 per vehicle, or $29 for manufacturers that signed before mid-February 2024. Tesla’s position from the start has been that a take-it-or-leave-it rate set by an intermediary is not automatically FRAND just because Avanci says so.

Tesla wanted a UK court to rule on that question before agreeing to any deal, and separately sought to invalidate three specific InterDigital patents it argues are not actually essential to the 5G standard. InterDigital and Avanci pushed back, arguing courts should not entertain a request for FRAND terms when Tesla had not been refused a license or sued for infringement.

1. December 2023: Tesla sues InterDigital and Avanci in London’s High Court, seeking a FRAND ruling on Avanci’s 5G pool license plus separate claims to invalidate three InterDigital patents.
2. 2024: The High Court sides with InterDigital and Avanci on the FRAND question, and the Court of Appeal later upholds that decision, though Tesla’s patent-invalidity claims are allowed to continue.
3. April 27 to 29, 2026: The UK Supreme Court hears Tesla’s final appeal, with four outside organizations filing written submissions.
4. July 27, 2026: The Supreme Court rules unanimously for Tesla, reviving the case and sending it back toward the High Court.

Even the judge who ruled against Tesla in 2024 seemed unconvinced by InterDigital’s own footing.

InterDigital is ambivalent (perhaps deliberately so) about whether the terms of the Avanci Licence are FRAND.

Mr Justice Fancourt wrote that in his 2024 High Court judgment, a line CCIA’s own lawyers later quoted back to the Supreme Court in their intervention.

Why Did Hollywood Back Tesla’s Patent Case?

Hollywood’s Motion Picture Association and three other outside groups filed written submissions backing Tesla, even though the case is nominally about car patents. Their members license unrelated standard-essential patents, for video codecs, apps and wireless chips, through similar pools, and all four organizations want courts able to check whether a pool’s flat rate is genuinely fair rather than simply accepting the pool’s own math.

CCIA counts Google and Apple among the platforms backing it, and both have faced patent disputes over hardware features built into hugely popular products. Meta, another prominent member of that world, is fighting its own billion-dollar lawsuit over patents built into its popular Ray-Ban smart glasses, a reminder that pool leverage cuts across far more than cars.

A Legal Playbook That Started With a Huawei Phone

The template for this fight dates to 2020, when the Supreme Court ruled that English courts could set global FRAND rates for Huawei’s phones and order a UK injunction if the Chinese manufacturer refused to pay. That case, Unwired Planet v Huawei, confirmed English courts’ power to set FRAND terms on a global basis, according to law firm Freshfields Bruckhaus Deringer, and it is a big reason London became a favored venue for the world’s biggest patent-licensing fights.

Avanci itself launched in 2016 with a pitch to automakers: pay one flat fee and skip the courtroom battles altogether. A bruising patent dispute between Nokia and Daimler, the maker of Mercedes-Benz, only reinforced the appeal of that pitch for the rest of the industry.

Eighty Car Brands Are Already Paying Into Avanci’s Pool

Tesla is fighting a battle most of the auto industry chose to avoid. Avanci’s older 4G vehicle pool signed on the vast majority of major automakers without a courtroom fight at all.

• 130 million-plus connected vehicles worldwide already carry a license under Avanci’s 4G vehicle program.
• 80-plus automotive brands have joined that 4G pool since it launched in 2017.
• 58 patent owners, including Qualcomm, Ericsson, Nokia, Huawei and InterDigital, contribute patents to the newer 5G vehicle pool.
• Mercedes-Benz became Avanci’s first 5G vehicle licensee when that pool launched in August 2023, with BMW and Hyundai following.

Those existing contracts do not unwind because of this ruling. But it does establish that any automaker could, in theory, ask a UK court to check Avanci’s math rather than simply accepting the pool’s invoice, an option that was not clearly available before Tesla pushed the question all the way to the Supreme Court.

What Happens Next At London’s High Court

The case now returns to the High Court for the FRAND determination Tesla wanted from the start: whether $32 a vehicle, or any of Avanci’s terms, actually qualifies as fair, reasonable and non-discriminatory. No hearing date has been set.

Tesla’s separate bid to invalidate three of InterDigital’s UK patents continues on its own track. That claim was never blocked by the lower courts and remains before the High Court regardless of how the FRAND fight ends.

The ruling landed after weeks of pressure on Tesla’s stock. Shares rebounded 0.98% to $316.10 in premarket trading Tuesday, a modest bounce after tumbling nearly 19% over the prior month. Cathie Wood’s ARK Invest had already bought $51 million worth of Tesla shares the week before the ruling, a bet placed before anyone knew which way Britain’s top court would go.

The case heads back to the same High Court that rejected Tesla’s argument in 2024, this time carrying the Supreme Court’s instruction to actually hear it out.

Frequently Asked Questions

What does FRAND mean in a patent licensing dispute?

FRAND stands for fair, reasonable and non-discriminatory terms, a commitment patent owners make to European standards body ETSI once their patents become essential to a technology standard such as 5G. Having declared a patent essential, the owner promises to license it to anyone who needs it on FRAND terms rather than blocking rivals from using the standard.

How much does Avanci charge automakers for 5G patent access?

Avanci’s 5G vehicle license costs $32 per car at the standard rate, or $29 for automakers that signed before mid-February 2024. That is a jump from its older 4G vehicle program, which launched at $15 per vehicle in 2017 and rose to $20 for new licensees in 2022.

Can Tesla still sell 5G-connected cars in the UK right now?

Yes. Nothing in this ruling stops Tesla from selling or launching 5G-connected vehicles in Britain. The case is about whether a UK court can rule on the price and terms of a patent license, not about whether Tesla may use the underlying technology.

Does the ruling change licensing deals other automakers already signed with Avanci?

No signed deal changes automatically. But the ruling means Avanci’s biggest selling point, that its rate is a fixed number nobody can challenge, no longer holds up in a UK courtroom, which could give any current licensee leverage the next time its contract comes up for renewal.

What is a standard-essential patent?

A standard-essential patent, or SEP, covers technology a company cannot avoid using if it wants to comply with a technical standard, like the 5G specifications set by ETSI. Patent owners who declare a patent essential to a standard, as InterDigital did with the ones at issue here, take on a duty to license it fairly rather than blocking rivals outright.