Tesla is embroiled in a legal dispute in London’s High Court as it seeks to secure a fair patent licence from U.S. technology firm InterDigital and the patent licensing platform Avanci. This litigation is crucial for Tesla’s plan to launch 5G-enabled vehicles in the UK.
Elon Musk’s Tesla has taken legal action against InterDigital and Avanci, aiming to obtain a licence on fair, reasonable, and non-discriminatory (FRAND) terms. The patents in question are vital for Tesla’s 5G vehicles, which the company plans to introduce imminently in the UK.
InterDigital and Avanci, however, contend that the case should be dismissed, arguing that any disputes should be resolved in the United States rather than the UK. They maintain that Tesla’s primary objective is to secure a FRAND licence, which InterDigital claims it cannot grant independently.
Dispute over licensing costs
Tesla’s main contention is the high cost of the licence demanded by Avanci. According to Tesla’s lawyer, James Segan, Avanci is demanding $32 per 5G-connected vehicle, which is significantly higher than the rate for 4G vehicles. Segan argues that this fee is excessive and that Avanci is unwilling to negotiate.
“Avanci makes a basic demand of $32 per 5G-connected vehicle, which is more than double the rate being paid by Tesla and most other vehicle manufacturers for a 4G vehicle,” Segan stated in court.
Seeking fair terms
Tesla is pushing for the High Court to determine the appropriate FRAND terms for using InterDigital’s patents worldwide. This move is based on the High Court’s established willingness to grant global FRAND licences, reinforced by a landmark Supreme Court ruling in 2021.
InterDigital’s stance
Thomas Raphael, representing InterDigital, argued that Tesla’s true aim is a licence that InterDigital alone cannot grant. “That is a licence InterDigital cannot grant and cannot make Avanci grant,” Raphael told the High Court.
Avanci’s argument
Avanci argues that Tesla has no contractual rights against it and that any litigation regarding the patents should be resolved in the United States. They also dispute the necessity of Tesla’s request, suggesting that Tesla’s approach to securing a licence is inappropriate.
The importance of 5G technology
5G technology is set to revolutionise the automotive industry by enabling faster and more reliable communication between vehicles and infrastructure. For Tesla, integrating 5G technology is critical for advancing its autonomous driving capabilities and enhancing the overall user experience.
Tesla’s strategic move
Tesla’s decision to pursue legal action in London rather than the United States is strategic. London’s High Court has a history of dealing with global FRAND licensing issues, making it a favourable jurisdiction for such disputes. This legal battle highlights the complexities of patent licensing in the rapidly evolving tech landscape, particularly as it intersects with the automotive industry.
Tesla’s lawsuit against InterDigital and Avanci underscores the significant challenges companies face in navigating patent licensing for emerging technologies. As Tesla moves forward with its plans to launch 5G vehicles in the UK, the outcome of this case could set important precedents for the industry. The High Court’s decision will be closely watched, not just by Tesla and its competitors, but by all stakeholders in the rapidly advancing field of automotive technology.