The US Court of Appeals for the Fifth Circuit holds that Standard Essential Patent holders may choose to only license end-product makers (Continental / Avanci)

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Even Apple’s and Tesla’s amicus briefs didn’t help: Continental, which is generally known for making tires but also in the telematics control unit (TCU) business, just suffered a defeat in an appeals court that has intercontinental implications for the car industry’s debate over the appropriate licensing level(s) of standard-essential patents (SEPs). On Monday, the United States Court of Appeals for the Fifth Circuit handed down its Continental v. Avanci et al. opinion following an early October hearing. As opposed to ’Conti’ getting the dismissal of its case against the Avanci patent pool and some of its key members (most famously Nokia) reversed, or at least a chance to amend its complaint once again, the automotive supplier is actually in a worse position now than before the appeal. It’s technically even one step further away from winning (which it was never really close to), and policy makers and courts around the globe may adopt the Fifth Circuit’s reasoning that SEP holders may choose to license only end-product makers, at least as long as they don’t cause any direct injury through patent enforcement against suppliers they deny a license.