Case of Nokia-Daimler connected car clash referred to European Court

A German court on Thursday referred a patent licensing dispute between Nokia and Daimler to the European Court of Justice to clarify the law as it relevant to supply chains.

The Duesseldorf Regional Court said it would postpone proceedings in Nokia’s fight against Daimler over royalties for technology utilized in navigation systems, vehicle communications, and self-driving cars.

The long-running case revolves around standard technologies used in 4G mobile networks that give information to vehicles known as connected cars, and whether Nokia is licensing them on fair, reasonable, and non-discriminatory (FRAND) terms.

The dispute has caused concern in Brussels, where the European Commission has proposed a mechanism to ensure whether certain patents are important to a technology standard and to decrease arguments over their use.

“It’s a welcome development that the European courts will pronounce on these very tricky questions,” said Commission Vice-President Margrete Vestager. “As you know we have tricky cases exactly in this area.”

Thursday’s referral to Luxembourg has frozen the status quo in which Daimler uses Nokia’s patents for free – a blow to the Finnish firm that earns 1.4 billion euros ($1.7 billion) annually from licences. The judgment can be appealed.

“Daimler has been using Nokia’s technology for 14 years and has looked for every avenue to prevent payment. In light of today’s decision, we will now consider our options,” Nokia said in a statement.

The automaker welcomed the Duesseldorf court’s referral, saying it would make it possible to clarify concerns on standard-essential patents “on a fundamental and Europe-wide level”.