Nokia ordered to pay $2bn to secure Daimler SEP injunction
Nokia must pay €1.67 billion ($2bn) to impose an injunction against Daimler, according to a German appeals court—more than 90 times higher than the amount ($22m) suggested by a lower court earlier this year.
The decision handed down by the Oberlandesgericht München (Munich Higher Regional Court) on December 17 is the latest development in a bitter patent dispute between Daimler and Nokia, which has invited major antitrust questions over patent licensing.
According to present stipulations, standard-essential patent (SEP) owners must agree to license their patents on fair, reasonable, and non-discriminatory (FRAND) terms.
The dispute arose when SEP owner Nokia sued Daimler for infringing its IP and refusing to take a FRAND licence to technology used in connected cars.
The antitrust issues at play concern whether SEP owners must agree to license their IP to auto suppliers. SEP owners, such as Nokia, favour a system whereby they license to end-level manufacturers such as Daimler because this approach yields a greater return on investment.
Daimler has argued that Nokia’s refusal to make its SEPs available to the carmaker’s suppliers violates the Finnish telecoms company’s licensing obligations. It has also argued that SEPs should be licensed to suppliers, rather than the manufacturers of end-products.
In November, the Düsseldorf Regional Court referred the dispute to the Court of Justice of the European Union (CJEU). On December 10, Nokia challenged the court’s referral to the EU’s highest court.
Germany’s competition regulator, the Federal Cartel Office, had also previously asked German courts to pass the contentious issue to the CJEU. The CJEU has been asked to clarify whether there is an “obligation for priority licensing of suppliers”, as well as the obligations of patent owners and implementers in patent licensing negotiations. The referral is expected to clarify which companies in the production chain should take a fair, FRAND licence for SEPs.
The European Commission published its IP Action Plan in November, in which it stressed the need to “reduce friction” and bring down the amount of litigation over SEPs in the auto sector. The EU executive indicated it would take a sector-by-sector approach to deal with the issue and try incentivise out-of-court settlements.
WIPR has approached both companies for comment.
