Setback for Daimler in connected cars dispute against Avanci pool members

Yesterday the Regional Court Munich ruled that, for the time being, Daimler may not sell certain cars in Germany. The cars in question feature connectivity modules with parts from certain suppliers (case ID: 7 O 8818/19). According to the decision, Stuttgart-based car maker Daimler has infringed one of Sharp’s LTE patents (EP 26 67 676). The infringement comes via Daimler’s connectivity modules and connectivity services “Mercedes Me”, “Connect Business”, and “Mercedes PRO Connect”.

If Sharp enforces the ruling against a security deposit of €5.5 million, Daimler will face a sales stop. JUVE Patent is not yet aware if Sharp is considering this step. On the other hand, sources consider it likely that Daimler will appeal against the verdict. However, the company did not wish to provide a comment.

Three weeks ago, Mannheim Regional Court granted an injunction against Daimler for the infringement of a Nokia patent. Subsequently, Daimler immediately appealed, filing an urgent motion to stay the enforcement with the Higher Regional Court in Karlsruhe. The car manufacturer could now do the same in Munich.

However, the stakes are not as high as in the Mannheim case. This is because the connectivity modules, for which Huawei supplies parts, are excluded from the Munich court’s ruling. Sharp and Huawei agreed on a licence in June. As a result, Sharp withdrew the parts of its lawsuits directed against Huawei.

Suppliers Bury, Continental Automotive, Harman Becker Automotive Systems, Robert Bosch and TomTom remain co-litigants.

Mixed result for Sharp

The lawsuit is part of a large-scale campaign independently waged by Sharp as a member of the Avanci patent pool. The pool offers connected cars licences for a large number of SEPs in the automotive industry. Nokia initially sued Daimler over ten patents, while Sharp is enforcing five patents. Furthermore, Conversant is suing Daimler over four patents.

In August 2019, it became known that Sharp had attacked Daimler with an initial lawsuit in Mannheim (case ID: 2 O 46/19). Sharp then filed a further claim in early June, also in Mannheim (case ID: 2 O 87/19). Then, three more lawsuits followed at the end of June at the Regional Court Munich (case IDs: 21 O 8609/19, 21 O 9918/19 and 7 O 8818/19).

All five patents are standard essential for wireless technology. In Mannheim, Sharp filed suits for patents EP 21 54 903 and EP 21 29 181. In Munich, suits were filed for EP 28 54 324, EP 23 12 896 and EP 26 67 676. Meanwhile, Daimler has challenged all five patents with nullity suits at the Federal Patent Court.

The courts have suspended two of the infringement cases, pending the outcome of the nullity suits. The Regional Court Munich will hear two further cases at the beginning of November.

No submission to the CJEU

In the Sharp case, the court did not have to decide which company in the production chain must take a licence from the owner of an SEP for connectivity modules – the OEM or the supplier. The Federal Cartel Office has previously suggested this question should be referred to the CJEU.

However, Sharp not only grants its licences to OEMs; it also grants licences to suppliers. This is demonstrated in the recent agreement with Huawei. On the other hand, this is not the case with Nokia. Nokia refuses to license to the suppliers. The Finnish company only offers licences to car manufacturers.

Therefore, in the Nokia case, the Regional Court Düsseldorf is considering a referral to the Court of Justice of the European Union. The CJEU would clarify to which company the SEP holder must grant a licence. The Düsseldorf Regional Court will not deliver its judgment on this matter until 12 November.

No impact on production

Daimler assumes that the Munich court’s ruling will not lead to a halt in production and delivery. A spokesman explained, “The ruling only concerns the remaining scope of the original complaint, as Sharp had partially withdrawn its complaint. The reason for this was that in the meantime a licence had been concluded between a Daimler supplier and Sharp. This shows that the model of licensing to the suppliers, which we favour, fundamentally works.”

Peter-Michael Weisse

Although Avanci did not want to comment on the details of the judgment, a spokesperson said, “Daimler’s legal disputes with Nokia and Sharp could still be resolved easily and quickly by Daimler taking an Avanci licence. Our vision of making patent licensing easier and more efficient has already seen 15 auto makers, including Audi, BMW, Porsche and VW, join our one-stop platform.”

“Our single Avanci licence covers thousands of cellular essential patents from 38 patent owners.”

Few surprises on the lawyer’s bench

The Sharp cases are Wildanger’s first foray into the disputes over connected cars patents. Lead partner Peter-Michael Weisse has many years of experience in SEPs and FRAND. Furthermore, Weisse is responsible for a successful campaign by the NPE Saint Lawrence Communications against various mobile phone companies.

A team of patent attorneys led by Christoph Walke and Matthias Waters supports Wildanger in the Sharp case. The Cohausz & Florack lawyers are also active for Nokia in the parallel dispute with Daimler, while Arnold Ruess litigates on Nokia’s behalf.

Daimler has retained Quinn Emanuel frontman Marcus Grosch for all disputes with the Avanci pool members. Usually, the US firm handles such lawsuits without the assistance of patent attorneys.

Marcus Grosch

Daimler’s suppliers also rely on a one-stop defence. The suppliers have instructed their law firms to handle all lawsuits concerning the Avanci pool.

Reliable representation

However, supplier and co-litigant Harman Becker is only involved in the disputes with Sharp and Conversant. The lawsuits filed by Nokia do not involve Harman Becker.

DLA Piper usually represents Harman Becker in the courtroom, while McDermott Will & Emery partner Henrik Holzapfel provides background advice on SEPs and FRAND licences.

TomTom now uses two different law firms in the connected cars cases. While TomTom Sales entrusted Bardehle Pagenberg from the beginning with their defence, Augsburg-based lawyer Maximilian Ernicke assumed representation of TomTom International. Ernicke worked at Bardehle Pagenberg before he joined his father’s law firm.

Hoyng ROKH Monegier represented Huawei while it was still party to the Sharp case. The relation between the law firm and the Chinese company is relativly new. Huawei has also been relying on Preu Bohlig & Partner in Germany for some time in other cases.

For Sharp
Wildanger Kehrwald Graf v. Schwerin & Partner (Düsseldorf): Peter-Michael Weisse, Eva Geschke, Jasper Meyer zu Riemsloh, Soenke Fock, Alexander Reetz, Ole Dirks; associates: Alexander Wiese, Stefan Berkemeier, Eva Thörner
Cohausz & Florack (Düsseldorf): Matthias Waters, Christoph Walke, Fabian Vogelbruch (all patent attorneys)

For Daimler
Quinn Emanuel Urquhart & Sullivan (Munich, Mannheim): Marcus Grosch, Johannes Bukow, Jérôme Kommer; associates: Marlen Yan, Sandra Wandt, Tonio Allendorf, Johannes Druschel, Andreas Hahne, Timo Merle, Isabel Huynh Cong (Stuttgart)

For Continental (co-litigant)
Freshfields Bruckhaus Deringer (Düsseldorf): Frank-Erich Hufnagel (lead)

For Robert Bosch (co-litigant)
Bardehle Pagenberg (Munich): Johannes Heselberger (lead)

For Bury (co-litigant)
Gramm Lins & Partner (Brunswick): Stefan Risthaus; Joachim Gerstein (patent attorney; lead)

For TomTom (co-litigant)
Bardehle Pagenberg (Munich): Peter Chrocziel (lead), Jan Bösing, Tobias Kaufmann (patent attorney); associates: Daniel Seitz, Ingo Lummer (patent attorney)
Ernicke (Augsburg): Maximilian Ernicke

For Harman Becker (co-litigant)
DLA Piper (Munich): Markus Gampp (lead); associates: Constanze Krenz, Benedikt Hammerschmid
In-house (Stamford): Lisa Mack (senior director IP)

Regional Court Munich, 7th Civil Chamber
Matthias Zigann (presiding judge), Georg Werner, Anna-Lena Klein