Nokia v Oppo: Did President XI meeting with opposite number in Finland hasten deal?
Increasingly bitter SEP dispute ends in same month as countries agree diplomatic ties | Politics plays a role in ending largest litigation of recent times, says Chinese patent attorney | Investment in innovation ‘trumps quantity of declared SEPs’.
After three years of intense legal manoeuvring across more than five jurisdictions, news broke this week that Oppo and Nokia had agreed to a global cross-licensing agreement, ending all litigation worldwide.
The deal ends what is arguably the largest litigation in recent years.
In one corner, a rightsholder confident off the back of agreements with Huawei in 2022, Apple and Samsung in 2023, and Honor in January this year. And in the other, an implementer on a losing streak from courts in Europe and India, seemingly willing to hold out for a better royalty rate, perhaps from a friendly court in China.
A decision from such a court landed last month (December 2023) and was followed by briefings from both sides to journalists, with wildly different views on who had ‘won’ the royalty rate issue.
A story in the Alibaba-owned South China Morning Post said the Chongqing court’s ruling “supports Oppo’s petition to set lower royalty rates for Nokia’s standard essential patents for 5G technology”.
This was rejected by Nokia, which said, cryptically, that it “represents only one view” and that it planned to appeal.
So given this bitter end to 2023 and with litigation ongoing, how did the pair shake hands just a few weeks later?
‘Key events’ oil the wheels
Yannan Li, senior associate and patent attorney at SITAO, said it’s likely that two events “helped get the deal done”.
“The judicial decisions that came out in multiple jurisdictions over the past few years helped narrow the gap between two parties,” said Li, before adding that diplomacy likely also played a part in the settlement.
Firstly, Li notes that the EU had followed India’s Delhi High Court and filed a suit with the World Trade Organization, seeking access to the Chongqing court's calculation of royalty rates.
Secondly, Chinese President Xi Jinping and Finland’s President Sauli Niinisto held a video call on January 10, during which “both agreed to collaborate more in areas including ICT under a new partnership” between the two countries, said Li.
These events, particularly the latter, may have added pressure on Oppo to agree to a licence.
With Nokia having both the means to protect its crown jewels and courts across the world lining up behind it, plus an agreement by leaders of both countries to collaborate on technology innovations, Oppo’s position looked increasingly fragile.
“As Nokia had appealed, I don't believe Nokia signed the agreement in line with the rates decided by the Chongqing court, which, ‘shall be honoured’ as claimed by Oppo,” said Li.
“This means Oppo agreed to sign the agreement under different rates than those it sought, was awarded, and honoured at the Chongqing court.”
The agreement, believes Li, was also finally achieved because the benefits of a cross licence had become more appealing.
“So the reality is that, at the end of the day, the strength of patent and SEP assets generated [via a cross licence], failed to justify the offset it intended to achieve financially when negotiating a cross-license with Nokia, though it was temporarily achieved legally at the Chongqing court,” said Li.
“So investment in innovation, rather than quantity of declared SEPs, matters.”
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