The Court of Appeal has recently ruled in Tesla Inc and another v IDAC Holdings Inc and others [2025] EWCA Civ 193. It dismissed an appeal against a Patent Court decision that there was no serious issue to be tried between Tesla and Avanci that Tesla was entitled to a licence under the platform on FRAND terms. Avanci is an administrator of a platform for patents essential to the European Telecommunications Standards Institute Standards for use in 5G vehicles. The decision was by majority.
Tesla had sought declarations of invalidity and non-essentiality of certain patents and declarations as to FRAND terms for a licence of the UK SEPs in the Avanci 5G Platform. They sought permission to serve the licensing claim on the defendants outside the jurisdiction. The defendants challenged the jurisdiction of the English courts. The judge set aside service of the licensing claims because he was of the opinion that there was no serious issue to be tried. Tesla appealed.
The Court of Appeal effectively had to decide if there was a serious issue to be tried on the licensing claims.
It ruled that in England and Wales, courts cannot independently decide on fair, reasonable, and non-discriminatory terms for licensing standard-essential patents (SEPs) unless the party requesting the decision has contractual rights. When it comes to patent pools or platforms, operators who do not own patents are not obligated to offer FRAND terms to patent implementers who obtain a license. Implementers have the option to either accept a joint license at the rate provided by the pool or negotiate individual FRAND licenses with each SEP owner.
There was a dissenting judgment: Arnold LJ thought that Tesla should be given permission to serve the claim form on Avanci outside the jurisdiction.
