Mercedes plant in Untertürkheim
Munich Daimler and Nokia have settled their longstanding patent dispute. The Dax group pays Nokia license fees for the use of telecommunications technology in the car, as both companies announced on Tuesday. All legal disputes are off the table, including Daimler’s complaint to the European Commission.
The companies did not comment on details. “We welcome the agreement, from an economic point of view, and because we avoid lengthy disputes,” said a Daimler spokeswoman. Shortly after the start of trading, Daimler shares were among the biggest DAX winners with a plus of around two percent.
Nokia had filed a number of lawsuits against the automaker. This is about a fundamental dispute that Daimler has been waging with the technology provider for a long time. The question is who should pay the license fee for the so-called standard essential patents on communication technology such as 5G. The case landed at the European Court of Justice at the end of 2020.
It is now unclear whether the European supreme court will now pass a judgment on the matter. In fact, the Düsseldorf Regional Court had submitted a number of fundamental questions to the court in Luxembourg to clarify the patent dispute.
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Among other things, this involves the licensing of patents within multi-level supply chains: Daimler had stated that the suppliers pay the patent fees, in the parts of which the technology is integrated. Nokia, on the other hand, argues that the automaker should pay itself.
The Finns settled a similar dispute with PC maker Lenovo in April after the company agreed to pay a fee. Samsung, too, recently relented on the use of patents for video technology. Car manufacturers such as Audi, Bentley, BMW, Mini, Porsche, Rolls Royce, Seat, Skoda, Volkswagen and Volvo also pay patent fees directly to Nokia.
There are always disputes of this kind
There are always patent disputes in the industry. Daimler, for example, was in court with the Japanese Apple supplier Sharp for patent rights. The US chip company Broadcom sued Volkswagen a few years ago because of the alleged use of patents in navigation and entertainment systems that the Wolfsburg-based company uses in numerous models.
The case was particularly sensational because the US group demanded a billion dollars from the Wolfsburg-based car company and, according to a “Spiegel” report, threatened to have the production of VW, Porsche and Audi models stopped by a court of law.
In the end, an out-of-court settlement was reached. It was not known at the time whether Volkswagen paid any money for this. The auto industry has long complained that so-called patent exploiters are exploiting the legal situation to demand excessive license fees.
More: Controversy for injunctive relief: Are the rights of patent owners restricted?