German carmaker Daimler AG may be slapped with a sales ban for its Mercedes-Benz cars in Germany after Finnish tech company Nokia won a patent dispute in a local court.
Judges in Mannheim ruled that Mercedes-Benz violated Nokia’s mobile-technology patents in its cars by using the company’s cellular technology without a license. This gives Nokia leverage in its fight with the carmaker over mobile technology used in new vehicles, ultimately enabling it to stop Mercedes-Benz from selling vehicles in Germany.
As you can imagine, this is not that simple to accomplish. According to Bloomberg, if it really wanted to impose a sales ban on Mercedes cars, Nokia would have to instigate a separate proceeding and post collateral of €7 billion ($8.3 billion) to enforce it. The sum would be used to cover massive damages in case the injunction was overturned on appeal.
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The Mannheim court said the case was granted because Daimler was not willing to abide to the rules. In a statement, the court said “the facts show that Daimler and its supporters in the case aren’t willing to take a license” from Nokia under the industrywide fair-terms standards.
According to the ruling, Daimler also must communicate to Nokia the number of automobiles it sold with the technology. The automaker seems confident a sales ban is not going to happen, though. “We cannot understand the verdict of the Mannheim court and will appeal. We don’t assume there’ll be a sales ban,” the carmaker said in an emailed statement.
The dispute is part of a wider battle between tech companies and the automotive industry over royalties for technologies used in navigation systems, vehicle communications and self-driving cars.
Automakers in Europe are becoming increasingly dependent on mobile-telecommunication systems to enable e-connectivity on their vehicles. According to Reuters, Nokia makes €1.4 billion ($1.67 billion) in licensing revenues every year, so this issue is crucial for the Finnish company.
“We hope that Daimler will now accept its obligations and take a license on fair terms. There is more to gain if we work together,” Jenni Lukander, president of Nokia Technologies, said in a statement, adding that “innovators should receive a fair reward for the use of their inventions.”
Nokia changed its model to deal directly with automakers, cutting its interactions with suppliers. As a result, some suppliers, including Continental and Bosch, support Daimler in the litigation as associated parties.
