Connected cars

First win for Nokia and Arnold Ruess in ongoing battle with Daimler

Daimler has infringed Nokia's mobile phone patent, decided Mannheim Regional Court yesterday in one of ten connected cars suits filed by Nokia. All suits are against the German car manufacturer. The court also declared Daimler and its numerous co-litigants as unwilling licensees.

18 August 2020 by Mathieu Klos

Nokia and Arnold Ruess Nokia and Daimler continue to engage in fierce litigation over connected cars patents ©Stanisic Vladimir/Adobe Stock

Daimler has infringed Nokia’s European patent EP 29 81 103. The patent is relevant to UMTS and LTE mobile phone standards. Today, the Mannheim Regional Court ordered Daimler to stop using and selling connectivity modules using this technology in Germany. The court also ordered Daimler to pay damages, provide information and render accounts (case ID 2 O 34/19).

Firstly, however, Nokia must provide a security to enforce the judgment. The court has imposed a security deposit of €7 billion. This is probably one of the highest amounts ever set by a German patent court.

Nokia did not want to comment on whether the company will now provisionally enforce the judgement. However, Daimler immediately announced an appeal against the ruling.

Usually in such proceedings, the companies proactively challenge the judgments. The companies apply to the next higher court, in this case the Higher Regional Court, to stop enforcement, regardless of whether the plaintiff enforces the judgment or not.

Unwilling licensees

Daimler and its co-defendants have always invoked a FRAND licence, and accused Nokia of non-FRAND-compliant behaviour.

However, now the Mannheim judges have found that Daimler and its co-defendants were not seriously willing to conclude a licence agreement with Nokia on FRAND terms.

According to JUVE Patent’s information, Daimler’s co-litigants in the proceedings are Continental, Huawei, Robert Bosch, TomTom, Valeo/Peiker and Bury.

The case forms part of a large-scale litigation campaign by three members of the Avanci patent pool against Daimler. According to Avanci, it offers patent licences for the common mobile phone standards tailored to the automotive industry. The latter can then provide networked cars without infringing the patent rights of third parties. Numerous holders of standard essential patents such as Nokia and Ericsson have joined Avanci.

Major campaign

Other car manufacturers such as the BMW Group and to some extent the VW Group have already concluded a licence with Avanci. On the other hand, Daimler argues that the manufacturers of the connectivity modules, i.e. its Tier 1 suppliers, should conclude the licence with Avanci, rather than the car manufacturers.

SEP holders view this differently. Subsequently, Nokia sued Daimler at the beginning of 2019 at the Regional Courts of Düsseldorf, Mannheim and Munich for infringing ten patents. Then Avanci pool members Conversant and Sharp joined the dispute. Sharp sued the Stuttgart-based car maker over five patents, while Conversant sued Daimler over four.

Numerous suppliers of connectivity modules, so-called telematics control units, joined the dispute. In addition to the co-defendants in the current proceedings, Harman International is also present as a co-defendant in other proceedings.

But the Avanci pool members are so far unsuccessful. Mannheim Regional Court rejected another Nokia lawsuit in early 2020. Two other suits were suspended pending a ruling from the Federal Patent Court on the validity of the patents in dispute.

Lawyers considered another lawsuit in Munich (case ID: 7 O 3890/19) as initially promising for Nokia. However, now the court is waiting for the preliminary opinion of the Federal Patent Court in the nullity proceedings. The court expects the opinion in autumn.

First gain for Avanci

For the patent pool, today’s judgment is an initial success. Nokia’s representatives had repeatedly stressed that it needed a positive verdict in order to bring Daimler back to the negotiating table. The judgment puts greater pressure on the car manufacturer and its co-litigants.

Jenni Lukander, president of Nokia Technologies, says, “We hope that Daimler will now accept its obligations and take a licence on fair terms. There is more to gain if we work together.”

However, given the vehemence with which the Stuttgart company is defending itself, there is no certainty that the parties will conclude a licence quickly.

Furthermore, Daimler does not believe the verdict will result in a stop in production or sales. When asked for a comment, a spokesperson at Daimler said, “We cannot understand the judgment of Mannheim Regional Court. We have a different legal opinion on the question of how to licence patents essential for telecommunication standards in the automotive industry. Nokia has so far refused to license our suppliers’ products directly.”

No referral to Luxembourg

Today’s ruling was eagerly awaited by both the mobile phone and the automobile industries. This is because the Federal Cartel Office provided an opinion on the proceedings in June.

The office had called on the court to suspend a lawsuit and allow the Court of Justice of the European Union to clarify the details.

Cordula Schumacher, Nokia and Arnold Ruess

Cordula Schumacher

The Federal Cartel Office wanted the CJEU to clarify the relationship in the supply chain. In its opinion, made available to JUVE Patent, the office recommended that the regional court send four key questions to Luxembourg.

However, the Regional Court rejected such a submission to the CJEU because Daimler and its co-litigants were already unwilling to conclude a licence.

Nokia and Daimler both accuse each other of not making a FRAND-compliant licence offer. The CJEU stipulates that an SEP holder must make a FRAND-compliant offer when suing for an injunction. The same goes for an implementer invoking a compulsory licence. This is laid down in the CJEU’s FRAND rules.

Some claimed the Federal Cartel Office was following indications from the car industry that Nokia might be acting in violation of antitrust law. Nokia immediately complained that the office had published its opinion unexpectedly, and had not heard Nokia’s own views. It is unknown whether the Federal Cartel Office has since rectified this.

The other nine suits brought by Nokia against Daimler have now also taken the office’s submission into account.

In corona mode

Originally the Regional Court Mannheim heard the case on 19 May, with a ruling set for 23 June. But the court twice postponed the ruling, firstly to 4 August and finally to 18 August. Regular advisors have represented all parties since the beginning of the dispute in 2019.

For Nokia
Arnold Ruess (Düsseldorf): Cordula Schumacher (lead), Arno Riße, Tim Smentkowski, Theresa Schulz
df-mp Dörries Frank-Molnia & Pohlman (Munich): David Molnia, Audrey Nickel (patent attorneys)
In-house (Munich): Clemens-August Heusch (IPR litigation)

Marcus Grosch, Quinn Emanuel, Nokia and Arnold Ruess

Marcus Grosch

For Daimler
Quinn Emanuel Urquhart & Sullivan (Munich): Marcus Grosch (lead), Johannes Bukow, Jérôme Kommer, Jan Axtmann, Felix Trumpke
In-house (Stuttgart): Anja Miedbrodt, Karin Setter

For Continental
Freshfields Bruckhaus Deringer (Düsseldorf): Frank-Erich Hufnagel (lead); Corin Gittinger
Braun Dullaeus Pannen Emmerling (Düsseldorf): Matthias Erdmann (patent attorney)
In-house (Munich): Roman Bonn

For Huawei
Preu Bohlig & Partner (Berlin): Christian Donle (lead)
Braun Dullaeus Pannen Emmerling (Munich): Friedrich Emmerling (patent attorney)
In-house (Munich): Georg Kreuz

For Bosch
Bardehle Pagenberg (Munich): Johannes Heselberger (lead), Anita Peter, Benjamin Ruckert (patent attorney)

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

For Peiker
Hogan Lovells (Munich): Benjamin Schröer (lead), Daniel Kaneko

For TomTom
Bardehle Pagenberg (Munich): Peter Chrocziel (lead), Daniel Seitz, Felix Grödl; Tobias Kaufmann (patent attorney)

Regional Court Mannheim, 2nd Civil Chamber
Holger Kircher (presiding judge)

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