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10 September 2020PatentsRory O'Neill

Daimler vows to challenge German sales ban

Daimler has confirmed it will appeal against a Munich court’s patent injunction that threatens to ban sales of its cars in Germany.

In a ruling issued this morning, September 9, the Munich Regional Court found Daimler to have infringed patent claims asserted by Sharp covering connected cars.

The court issued an injunction against Daimler, but the automaker has told WIPR that it will appeal the decision, and does not expect any interruption in sales.

In its decision, the court ruled that Sharp’s patent (EP 2 667 676 B1) is essential to the Long-Term Evolution standard, a set of wireless technologies used in connected cars and other devices.

The court noted that Daimler had “consistently proven” itself to be an unwilling licensee in negotiations with the Japanese company.

But the court declined to submit questions on licensing norms in the automotive industry to the Court of Justice of the European Union (CJEU), despite a recommendation by Germany’s competition regulator, which is scrutinising the licensing model favoured by standard-essential patent (SEP) owners.

Under this model, SEP owners license to end-level manufacturers, rather than component suppliers, as it produces a greater return on investment.

It has sparked a fierce debate and extensive litigation between auto manufacturers and tech SEP owners.

In a statement sent to WIPR, a Daimler spokesperson noted that the findings related only to some of the claims advanced by Sharp.

Sharp partially withdrew its patent complaint after it reached a component-level licensing deal with Huawei, one of Daimler’s suppliers.

“We do not understand the decision of the Munich Regional Court and will appeal against it,” the Daimler spokesperson said.

The spokesperson added: “The verdict only concerns smaller parts of the original lawsuit, since Sharp had partially withdrawn its claim. The reason for this was that a licence was concluded between a Daimler supplier and Sharp in the meantime. This shows that the model favoured by us, licensing by the suppliers themselves, is basically possible.”

WIPR has contacted Sharp for comment.

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