There can be a reasonable decision — or there will be interjurisdictional friction that could culminate in a trade dispute, which a country representing only 3% of the global economy and teetering on the edge of a technical recession cannot afford.
Opinion
The deck appears stacked. Hope springs eternal, but I fear the worst after the UK Supreme Court (UKSC) made the composition of the Tesla v. InterDigital & Avanci panel public. Three of the five members (thus, enough to form a majority when it comes to a vote) have a history with the UK’s ill-conceived Unwired Planet vs. Huawei case law that does not bode well
- Lord Kitchin (then Lord Justice) was the driving force behind the decision by the Court of Appeal of England & Wales (EWCA), and after that one was made, got promoted to the UKSC. His emotional attachment to extraterritorial overreach was evidenced by how he lobbied and campaigned for the affirmance of that decision. I even remember listening to a speech he gave at a Munich conference in early 2019, and two anecdotes from that one:
- During that speech, someone intimately familiar with the proceedings came to me (I was sitting at the very back of the room, as I did most of the time when I attended conferences; now I don’t attend any, without exception) and told me about various falsehoods in that presentation. It was not an academic speech: it was pure advocacy, the defense of a radical decision that has caused nothing but problems. Then the UKSC decision that came down the following year did not accurately describe the course of events either…
- Judge James L. Robart of the United States District Court for the Western District of Washington (Microsoft v. Motorola) spoke there as well, and during a long break the two judges had a long conversation in the front row of the conference room at Munich’s Ludwig Maximilian University. From a distance, they appeared to get along, but their judicial philosophies could not be further apart: Judge Robart made it very clear that U.S. judges do not adjudicate foreign patents over the objection of one party, and sometimes decline even if both parties ask them to. If UK judges shared that approach, a lot of interjurisdictional friction could be avoided.
- Lord Sales (now the Deputy President of the UKSC) and Lord Briggs were on the UKSC Unwired panel. Of the five members of that panel, those two were clearly the jurisdictional maximalists. By contrast, the court’s then-Deputy President (and, a few months later, President) Lord Reed was far more receptive to Huawei’s arguments. Lord Sales came across as someone who just wanted UK courts to get as many cases as possible. Lord Briggs downplayed the serious issues that Unwired rose and against which Huawei rightly warned. For example, Lord Briggs thought interjurisdictional conflicts were just a matter of “case management”.
If the three still believe in extraterritorial overreach the way they did then, Avanci (InterDigital is basically just an anchor defendant and not the real target) can present the strongest arguments in the most articulate way, but it won’t be able to win to the extent it would in front of a non-activist panel. This doesn’t necessarily mean that Tesla would prevail across the board. But the outcome in this scenario would range from letting Tesla seek key declarations concerning patent pool rates to a decision that would not give Tesla directly what it wants, but would contain certain holdings and dicta that would pave the way for a refiled lawsuit.
In a more optimistic view of the world, at least one or two of those judges are no longer extremists. Sometimes people recognize where they erred, without necessarily admitting it, but at least to the extent that they don’t repeat the same mistakes. The ideal outcome would even be that they dial back a little bit. They could throw out Tesla’s case, as two courts did before them despite significant sympathy for Tesla’s desire, and on top of that they could make statements — at the hearing and in their written decision — that would curb extraterritorial overreach by the English courts. I’m hoping for the best, but everyone has to prepare for the worst.
As Huawei warned at the time, Unwired did lead to major interjurisdictional friction. The arrogance (which is sometimes attributable to rather complex psychological dynamics) with which parallel Chinese proceedings were treated backfired. Chinese courts started to make their global FRAND determinations. That led to escalation with courts in India and Europe. It culminated in the Munich I Regional Court’s first pre-emptive anti-anti-anti-antisuit injunction (AAAASI), which in a dictum noted that those seeking to leverage foreign interference may be deemed unwilling licensees — in the worst case, for that reason alone.
The Unwired virus infected the entire body of UK SEP case law. For a few years, it was the SEP holders who thought Unwired gave them leverage. Then, in 2023, came a couple of first-instance rate-setting decisions that fell far short of expectations. Implementers started to embrace the UK. Xiaomi’s interim-license dispute with Panasonic was a special case where both parties actually agreed, even if at different times, to have their global licensing dispute resolved in the UK. But thereafter it became a game of unilateral gamesmanship. And the lower English courts have even assumed global rate-setting jurisdiction over non-SEPs. It’s a disaster.
The rest of the world is tired of those UK antics. There will be more and more injunctions. China has already responded with regulations (April 14, 2026 ip fray article). The related sanctions include, for the most extreme cases, imprisonment.
Declaration my ass. Just like all the other implementers engaging in gamesmanship, Tesla styles its requested relief as being purely declaratory. They originally wanted more than they are seeking now. They are saying that their case is not a specific-performance injunction. Well, presently it is not. But the “only a declaration” lie must not be told, or if it is told, it must not be taken seriously. It’s intellectually dishonest crap. It came up again, even from the bench, at this week’s EWCA hearing. Whom do you think you can fool? Not the judges in other jurisdictions. Not the regulators in the U.S., China, or Brazil. And not the readers of this website.
A judicial declaration of a contractual entitlement is not merely a statement. It can serve as a basis for more, be it a (subsequent) specific-performance injunction or a damages claim. The UPC’s Mannheim LD correctly identified the issue. To make it sound like Bill Clinton’s campaign slogan: “It’s the coercion, stupid.” Or, put differently: when the line is crossed from pure persuasion to coercive dissuasion, the net effect is usurpation, and the affected jurisdictions must push back hard:
- If UK judges believe the rest of the world will be persuaded by the reason and logic of their statements, then they can simply limit their declarations to UK patents. That’s how it worked back in the day when UK declarations of invalidity were used as persuasive authority in German patent infringement cases. But that’s not what Tesla wants. It’s not what all those other implementers running to the UK courts want.
- What they want — and some judges are happy to give them — is an instrument they can use to threaten patent holders. A Damocles sword. They want to be able to ask for a quick specific-performance injuntion. Or at least they want to be able to collect damages, such as based on the argument that foreign enforcement was unlawful and resulted in a license agreement on allegedly supra-FRAND terms. At the heart of any liability argument there will be an allegedly unharmful declaration.
“Thanks” to the fallout from Unwired, the UK is next in line for an EU complaint with the World Trade Organization (WTO). And the EU might be joined by certain countries, not least the United States. In some other contexts, the EU may be closer to the UK than to the U.S. these days. But when it comes to compliance with the Treaty on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the UK has become a rogue state.
Meanwhile, the courts in other jurisdictions will take ever more action against UK overreach. There will be more and more anti-interference injunctions. There will be cases where implementers seeking to leverage foreign interference will be deemed unwilling licensees. And the ultimate interjurisdictional escalation will be when preliminary injunctions against SEP infringement are entered and actually enforced. Before Tesla stops its European sales and its factory near Berlin, it will presumably withdraw any UK rate-setting action.
The UKSC should never have made its Unwired decision, and should never have granted Tesla’s petition to appeal. But that is water under the bridge. What comes now, starting tomorrow, is a 2.5-day hearing. That’s a lot of time for something that only one out of the four judges who previously looked at it was prepared to support.
This could go wrong. But it could also go right. With Lord Kitchin, there’s little hope. He retired after a relatively short time on the UKSC, which some people in the UK viewed rather critically. He’s now returning for this case, and given how aggressively he lobbied and campaigned for Unwired, it would be a huge surprise if he was the voice of reason this time around, but stranger things have happened. Lord Sales has since been promoted to Deputy President, and if Lord Briggs still thinks case management is the answer, he might ask himself what case management implications all those interjurisdictional anti-interference and antisuit wars have.
Tesla is seeking something that makes no sense. Even less so when InterDigital has made it very clear that it would be prepared to grant a bilateral license.
Tesla’s supporters are Big Tech and movie industry lobbying groups. That includes ACT, which does not deny that it is paid by Big Tech while claiming to represent small companies (companies so small that no patent pool would even care about them in the first place). Of course, there will always be someone who wants to bring prices down. But that does not mean there is a serious problem to be solved.
Patent pools like Avanci have brought many licensors and many licensees together. Hundreds of thousands of licensor-licensee pairs, in fact (April 21, 2026 ip fray article). Without those pools, there would be a lot more litigation, and implementers would end paying more (in license fees alone, and even more so in the sum of license fees and transaction and litigation costs) without them.
A court of final appeal is the next best thing to a legislature. It must think things through. It must consider all the consequences of its decisions, which did not work out with Unwired.
Tesla would not just be Unwired II. It would be downright Unhinged.