At $32 per car, why doesn't Tesla admit it? (Part 1)
On April 27th, the UK Supreme Court officially began hearing the Tesla v InterDigital/Avanci case. The hearing for this case is scheduled from April 27th to 29th, 2026.
The issue to be adjudicated in this case will most likely boil down to a very specific figure, $32 per vehicle. When considered in the context of the overall price of a smart car, this figure doesn't seem expensive. However, Tesla is not willing to accept it this time, not just the figure itself, but also the licensing logic behind it.
In Tesla's view, it is not facing a single standard-essential patent (SEP) holder, nor is it a simple licensing negotiation for a few specific patents. Instead, it is dealing with a global automotive licensing platform operated by Avanci, which covers a large number of 5G SEPs. The solution offered by Avanci is a comprehensive platform license for 5G-connected vehicles. What Tesla wants to question is whether this platform should also be subject to FRAND (Fair, Reasonable, and Non-Discriminatory) review?
This is the core highlight of the case currently being heard by the UK Supreme Court.
Tesla, Inc. and Tesla Motors Limited are the appellants in this case, while InterDigital Patent Holdings, Inc., InterDigital Holdings, Inc., and Avanci LLC are the appellees. The core issue of the case is whether the courts of England and Wales have the authority to determine whether the licensing terms of SEPs are in line with FRAND when they are licensed externally through a patent pool or collective licensing arrangement.
The cause of the case is Tesla's plan to launch 5G-connected vehicles in the UK.
A 5G vehicle is not simply an ordinary vehicle with an additional communication module. As long as a vehicle uses the 5G communication standard, it will enter the licensing system of SEPs. A large number of patents declared as 5G SEPs may be held by different right holders. For automobile manufacturers, negotiating with each right holder individually is costly; for patent holders, collective licensing also makes it easier to collect fees. This is where Avanci comes into the picture.
According to the case facts, Avanci operates a 5G platform license for automobile manufacturers. Avanci once offered Tesla a 5G platform license with a publicly announced rate of $32 per vehicle. Tesla requested to negotiate the rate, but Avanci stated that the rate was non-negotiable. Subsequently, on December 5th, 2023, Tesla filed a lawsuit, claiming that it has the right to obtain a license covering the entire Avanci 5G platform through Avanci, and arguing that the FRAND rate should be lower than the fixed rate of $32 per vehicle proposed by Avanci.
What Tesla really refuses to accept is whether a 5G automotive patent pool composed of a large number of SEP holders and uniformly operated by Avanci can charge automobile manufacturers at a fixed price without being subject to the court's review of its FRAND nature. This is the core issue behind the $32 figure.
If only looking at the amount, it is a licensing fee; if placed within the SEP system, it is the entry price of standard technologies into the smart automotive industry.
The case is complex because what Tesla really wants to challenge is the price of the Avanci platform, but procedurally, it cannot bypass SEP holders like InterDigital.
InterDigital's written opinion is very straightforward. It says that Tesla's real target is Avanci and the entire platform. InterDigital stated that during the first-instance hearing by Judge Fancourt, the Avanci platform covered more than 170,000 SEPs globally, involving more than 66 independent licensors; InterDigital is just one of them. InterDigital also emphasized that Tesla is seeking a customized FRAND rate for the platform that is lower than Avanci's fixed rate.
Thus, this creates the most crucial structural tension in this case:
Tesla is facing the platform. InterDigital holds some SEPs. Avanci is responsible for platform licensing. Tesla wants to challenge the platform price. However, the FRAND commitment is a commitment made by SEP holders to the standards organization.
In other words, the legal obligation subject and the commercial charging entry do not completely overlap.
What Tesla needs to do is to reconnect the two. It wants the court to see that since SEP holders put their patents into the Avanci platform and charge the automotive industry through this platform, the platform license cannot be completely free from FRAND review.
Avanci and InterDigital, on the other hand, need to defend the boundaries. Avanci is not a SEP holder, InterDigital cannot grant a license for the entire platform, and the FRAND obligations under ETSI cannot be extended to a judicial review of the entire patent pool price.
This is not simply a question of "who should collect the money," but rather a question of "who should be subject to review."
Let's sort out the procedural context of this case.
On December 5th, 2023, Tesla initiated a lawsuit in the UK.
Tesla put forward two types of requests: one is to challenge the invalidity or non-essentiality of some of InterDigital's UK 5G SEPs; the other is a FRAND licensing request. Tesla requested the court to determine that the licensing terms proposed by Avanci are not FRAND, and to determine the FRAND licensing terms between Tesla and Avanci that cover the Avanci 5G pool. The case facts state that the declarations requested by Tesla include: the relevant licensing terms of Avanci do not comply with FRAND; a FRAND license should be a license between Tesla and Avanci, globally, covering the entire Avanci 5G pool.
In July 2024, Judge Fancourt of the first instance made a ruling.
The first instance held that there were no procedural issues that could be adjudicated regarding Tesla's relevant requests for the Avanci platform license, and the UK court did not have jurisdiction over these licensing requests. In its written opinion to the Supreme Court, InterDigital summarized that Judge Fancourt made a judgment and order in July 2024, stating that Tesla's Licensing Claims neither had a serious issue to be tried nor fell within the jurisdiction of the UK court.
On March 6th, 2025, the majority opinion of the UK Court of Appeal dismissed Tesla's appeal.
The majority opinion of the Court of Appeal upheld the first-instance result. The majority opinion held that SEP holders voluntarily putting their patents into the Avanci platform does not change the contractual analysis of the ETSI commitment; the obligations under ETSI require SEP holders to be prepared to license their SEP portfolios on FRAND terms, but it does not mean that they are required to license the entire patent pool collectively with other right holders. Avanci's written opinion quoted the majority opinion of the Court of Appeal, stating that SEP holders did not commit to licensing a portfolio that includes the patents of other organizations collectively.
On June 30th, 2025, Tesla was granted leave to appeal to the UK Supreme Court.
Tesla was granted leave to appeal to the UK Supreme Court on June 30th, 2025. The important legal issue at the Supreme Court level in this case is whether the courts of England and Wales have the authority to determine whether the SEP licensing terms through a patent pool or collective licensing arrangement are FRAND.
On February 24th, 2026, multiple third parties were allowed to intervene.
Organizations such as FSA, CCIA, ACT, MPA, and ICLE intervened, turning this case from a dispute solely between Tesla, InterDigital, and Avanci into a public discussion on the SEP patent pool system. FSA clearly stated that this case focuses on the Avanci 5G Vehicle pool, which is a 5G patent pool for connected vehicles; Avanci prefers to call it a "platform," but FSA believes that what really matters is not the name, but the feature that multiple SEP holders license their patents collectively.
This case has not yet entered the substantive trial stage of "whether $32 is really FRAND."
The Supreme Court first needs to deal with whether the UK court has the jurisdiction to try the case.
In other words, the problem the court is currently facing is not to directly reprice Avanci, but to determine whether Tesla's platform licensing request can be heard by the UK court.
InterDigital argues that Tesla's request is essentially a global platform licensing dispute, rather than a dispute over a few UK patents; most of the parties are in the United States, and most of the platform's patents are not in the UK, so the UK connection is limited. InterDigital also argues that if the UK court were to obtain jurisdiction over the global FRAND platform license just because there are a few UK patents in the platform, it might lead to de facto universal jurisdiction.
This point is crucial.
Tesla, of course, hopes to bring the Avanci platform price before the UK court because after the Unwired Planet case, the UK court has become an important arbiter in global FRAND disputes. However, what Avanci and InterDigital want to prevent is the further advancement of this jurisdictional boundary, from bilateral global licensing to global patent pool platform licensing.
If the UK court can hear the case, then the Avanci platform price may enter the FRAND review process. If the UK court cannot hear the case, then the path to challenging the patent pool price will be significantly narrowed.
Therefore, this case is first and foremost a battle over jurisdiction, and only then a battle over price.
Going back to the previous question, why doesn't Tesla accept the $32 figure?
On the surface, it's because it thinks the price is too high. But on a deeper level, it's because Tesla doesn't accept that this way of price formation can be exempt from review.
The logic that Tesla and the intervening parties supporting its position want to establish is that if SEP holders put their patents into the Avanci platform and rely on the platform license in practice to complete the licensing to the automotive industry, then the platform license cannot be completely decoupled from the FRAND obligations.
CCIA's opinion is particularly straightforward. It believes that if the majority opinion of the Court of Appeal is upheld, it may mean that as long as SEP holders license their FRAND-encumbered patents through a collective licensing arrangement, their FRAND obligations will effectively cease to apply in practice. CCIA is worried that other patent pools or collective licensing arrangements may also replicate the Avanci model to avoid the review of licensing rates and terms.
Note: Explanation of relevant institutional abbreviations in the text
CCIA: Computer & Communications Industry Association
FSA: Fair Standards Alliance
ACT: ACT | The App Association
MPA: Motion Picture Association, Inc.
ICLE: International Center for Law & Economics
This article is from the WeChat official account “Intellectual Property Power” (ID: zhichanli), author: Shawn, published by 36Kr with authorization.