Tesla shares slid 1.39%, closing at $308.69 despite the UK Supreme Court delivering a key victory for the electric car maker in its ongoing dispute over 5G patent licensing. The court’s ruling overturns previous judgments and enables Tesla to push forward with its case seeking fair licensing terms under the FRAND principle, which governs patents essential to 5G connectivity in vehicles.
Legal Victory Sets Stage for Reassessment of Licensing Fees
The Supreme Court’s decision revives Tesla’s claim that the licensing fees charged by InterDigital and managed through the Avanci platform do not comply with fair, reasonable, and non-discriminatory standards. Tesla had challenged Avanci’s flat $32-per-vehicle fee, arguing it unjustly inflates costs for 5G-enabled cars. By reinstating Tesla’s case, the court recognized that patent holders cannot avoid FRAND obligations simply by bundling their patents into collective licenses.
Patent Dispute’s Complex History and Market Impact
This legal battle focuses on patents governed by the European Telecommunications Standards Institute, with InterDigital owning key standard-essential patents licensed via Avanci. Tesla’s lawsuit targets the British market introduction of its 5G-capable vehicles in 2023. Earlier, the High Court dismissed Tesla’s FRAND licensing assessment, allowing only a narrower patent validity challenge. After the Court of Appeal upheld this stance, the matter escalated to the Supreme Court, which has now cleared the way for a full examination of fair licensing fees. Despite the positive legal outcome, investors reacted cautiously, sending Tesla shares lower.
