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26 November 2020PatentsRory O'Neill

Nokia v Daimler SEP dispute referred to CJEU

Düsseldorf Regional Court has referred a standard-essential patent (SEP) licensing dispute between Nokia and Daimler to the Court of Justice of the European Union (CJEU).

The referral could clarify which companies in the production chain should take a fair, reasonable, and non-discriminatory (FRAND) licence for SEPs.

Major telecoms SEP owner Nokia has sued Daimler for infringing its IP and refusing to take a FRAND licence to technology used in connected cars.

But Daimler has argued that SEPs should be licensed to suppliers, rather than the manufacturers of end-products.

Germany’s competition regulator, the Federal Cartel Office, has previously asked German courts to pass the contentious issue to the CJEU.

A Mannheim court declined to do so on a previous occasion, also in a dispute between Nokia and Daimler. On that occasion, the Mannheim court ruled in favour of Nokia and said Daimler had not been a willing licensee in negotiations.

But, as expected, Judge Sabine Klepsch of the Düsseldorf Regional Court confirmed this morning, November 26, that it had made a referral to the EU’s top court.

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 court has stayed proceedings between Nokia and Daimler, including Nokia’s request for an injunction against the automaker. A Nokia spokesperson said the company would “consider our options” in light of today’s decision.

“Two German courts have already concluded that Daimler is using our inventions without authorisation, that Nokia has acted correctly, and that Daimler and its suppliers have been unwilling to agree licences,” a Nokia spokesperson said.

“These judgments remain unimpacted by today’s decision. The questions raised by the Court in the Düsseldorf—in particular, whether Daimler or its suppliers should take the licence—are purely academic given that fair and reasonable licensing offers were made to both before legal action was initiated,” they added.

A Daimler spokesperson said the company welcomed the referral. “This allows the questions on the licensing obligation of SEPs to be answered fundamentally and throughout Europe,” they said.

The spokesperson added: “We believe that a company cannot be prohibited from using such patents if its suppliers are willing to pay a corresponding licence. We will have this question clarified in the course of the appeal proceeding.”

The European Commission yesterday published its IP Action Plan, 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 dealing with the issue and try incentivise out-of-court settlement.

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