Daimler agrees to cough up for Nokia technology

A report from Bloomberg last year highlighted a potential frenzy of patent litigation, as different industries increasingly use 5G and other wireless innovations.

At the time, Joe Siino, president of Dolby Laboratories' patent licensing arm, highlighted that the need for different types of companies to sign patent deals "was taking the problems we had with smartphones and multiplying it by ten."

Figure 1: Crash averted: Daimler has finally given in and settled its long running patent dispute with Nokia – avoiding imminent impact.
(Source: Daimler)

It's been well documented that manufacturers in the automobile industry are among the new types of companies that are increasingly using wireless technologies for connected cars and the like. Some have run into problems over patent deals.

Steering a deal

Take Germany-based Daimler, which is the parent company of premium and luxury car manufacturer Mercedes-Benz.

Daimler has run into problems with Nokia because it seems that the carmaker has to date never paid Nokia for using its patents, according to Reuters.

This is despite the fact Nokia has an established licensing program, and many automotive brands already license its standard-essential patents for their connected vehicles, including Audi, Bentley, BMW, Mini, Porsche, Rolls Royce, Seat, Skoda and Volkswagen.

In 2020, Nokia decided enough was enough and persuaded a court in Germany to issue an injunction on Daimler to stop it from using the Finnish vendor's cellular technology without the necessary authorization.

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Nokia already had several patent infringement actions pending against Daimler. Furthermore, a German court referred the patent licensing dispute to the European Court of Justice to clarify the law as it applies to supply chains.

Now, it seems that Daimler and Nokia have been able to resolve the matter among themselves. In a short announcement, they said they have signed a patent licensing agreement that will see Daimler pay for the technology it uses.

"The parties have agreed to settle all pending litigation between Daimler and Nokia, including the complaint by Daimler against Nokia to the European Commission," the joint statement said.

Although Nokia did not disclose details of the agreement, Danske Bank analyst Mads Rosendal told Reuters that the "revenue stream is not likely to be material but at the very least it will be very stable and high margin. Also, ending of the dispute should save a fair amount of legal costs going forward."

Reuters reported that Nokia makes €1.4 billion (US$1.7 billion) in licensing revenues every year.

Nokia still faces further hurdles elsewhere, however. Reuters noted that German car parts manufacturer Continental AG, which together with Daimler, Bury Technologies, Valeo and Gemalto complained about Nokia's patent fees to EU antitrust regulators in 2019, said it was not dropping its complaint nor legal fight in the US and has urged the European Commission to set out a binding patent licensing framework.

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— Anne Morris, contributing editor, special to Light Reading