The Mannheim Regional Court has largely upheld a patent lawsuit filed by Nokia against the Daimler Group, prohibiting the carmaker from further sales of the vehicles in question. Daimler infringes a Nokia patent for a method of synchronization in mobile networks with certain telematics units of its vehicles, the 2. Civil chamber of the LG Mannheim on Tuesday (Az. 2 O 34/19).
The chamber rejected the objections of the company and numerous industry supporters such as Bosch and Continental, Nokia also had to offer suppliers a license for the patented technology on reasonable terms. Neither Daimler nor its subcontractors were "seriously prepared" had been, "to conclude a license agreement on FRAND terms with the plaintiff", informed the court.
Sales stop questionable
It is questionable whether this enforceable injunction will actually lead to a sales stop for the vehicles concerned. "We do not expect there to be a halt to production or sales", said a Daimler spokeswoman. "We do not understand the verdict of the LG Mannheim and will appeal against it."
Should Nokia want to enforce the sales stop, it had to deposit a high security deposit, according to information from Bloomberg it is about 7 billion euros. This sum is intended to cover possible damages in the event that the next instance overturns the ruling. It was not yet known on Tuesday whether Nokia will enforce the sales ban.
The case is one of a series of patent suits brought by Nokia and others against German automakers. While Volkswagen and BMW have preferred a friendly settlement, Daimler wants to go to court. The carmaker is defending itself against several patent suits in various courts, including Munich and Mannheim.
The dispute concerns patent EP2981103, which describes a method of synchronization between a terminal and a radio cell. It is used in the radio chips of the telematics units that Daimler purchases from a supplier. Daimler had argued, among other things, that Nokia had to offer licensing to chip manufacturers and suppliers, which they were willing to do. "Nokia has so far refused a comprehensive direct licensing of the products of our suppliers", explained a Daimler spokeswoman.
Intervention by the Federal Cartel Office
In a rare intervention, the German Federal Cartel Office also recommended to suspend the proceedings and let the European Court of Justice (ECJ) clarify this ie. The Mannheim Regional Court, however, does not consider a referral to the ECJ necessary. The court found that Daimler and its suppliers had not shown any "willingness to license" shown. Thus a large part of the "a large part of the questions referred no longer arose".
Nokia is pleased with the ruling. "Today’s decision is an important confirmation of the long-term work of Nokia’s innovators", said Jenni Lukander, President of Nokia Technologies. "We hope that Daimler will now fulfill its obligations and obtain a license under fair conditions. There is more to be gained by working together."
But the Finns’ record in Mannheim so far is rather mixed: Of four proceedings in Mannheim, one suit has been dismissed, and two others are hanging in the air until the Federal Patent Court decides on the validity of the patents in question. The auto industry is fighting back: On the one hand, it is questioning the validity of some of the patents that have been filed, and on the other, it wants the EU to clarify how licensing is to be handled.
Digitization with risks
The problem for the auto industry: as vehicles become increasingly digital, more and more mobile technology is being installed in cars. Mobile communication standards such as UMTS or LTE consist of thousands of patented processes. The owners of such standard essential patents must license their protected technologies on fair and reasonable terms – the so-called FRAND principle.
In the auto industry, it has been standard practice for manufacturers of parts and suppliers of entire components to clear the licensing ies. But Nokia and its comrades-in-arms are now going directly to the vehicle manufacturer and asserting their claims – based on the "unit price", which is significantly higher for a luxury class Daimler than for the supplier.