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Nokia Can Stop Mercedes From Selling Cars In Europe: Will It?

In a patent dispute in Germany Nokia won a court ruling that allows it to stop Mercedes from selling cars in Europe. The court says Mercedes violated Nokia’s mobile-technology patents. Mercedes ignored licensing Nokia’s technology. In fact, the court went so far as to say, “The facts show that Daimler and its supporters aren’t willing to take a license.”

Nokia can stop Mercedes from selling cars in Europe

Mercedes-Benz E350 de is displayed at the Tokyo Auto Salon 2020
The Mercedes-Benz E350 | Tomohiro Ohsumi/Getty Images

Nokia can stop Mercedes from selling cars in Europe, but it would first have to post $8.3 billion collateral. This is because if the injunction were to be overturned on appeal there could be large damages owed. So the collateral would cover such damages if Nokia were to enforce terminating Mercedes sales. 

Nokia president Jenni Lukander said, “Today’s finding is a major endorsement of the long-term engineering work by innovators at Nokia and the important principle that innovators should receive a fair reward. We hope that Daimler will now accept its obligations and take a license on fair terms.” 

Mobile-telecommunications systems technology must be licensed in some way. Nokia charges a fee per car to license its e-connectivity technology rather than a license. Some companies including Continental and Robert Bosch feel that is unfair and support Mercedes. Their fear is that fees per car would be too expensive. Instead, Mercedes wants Nokia to license the technology that integrates mobile devices to its cars. 

The ruling could have far-reaching effects beyond vehicles

The Mercedes-Benz Vision AVTR concept car on display
The Mercedes-Benz Vision AVTR concept car | Mario Tama/Getty Images

The ruling could have far-reaching effects beyond vehicles. Mercedes and Continental have filed separate lawsuits to stop Nokia from “misusing its marketing power.” But both BMW and Volkswagen have accepted Nokia’s fee-based licensing arrangement. The ruling could also affect other suppliers to German automakers. 

Mercedes responded to the ruling telling Automotive News, “We cannot understand the verdict of the Mannheim court and will appeal.” But feigning the verdict will do little to help Mercedes’ cause. The court was very clear, saying in effect that Daimler isn’t willing to abide by existing rules for standard essential patents.

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Nokia has other lawsuits pending in Germany over the fee versus licensing case. One has already been dismissed while others are pending based on this case’s validity. Mercedes has also sued to annul Nokia’s mobile patents. 

It’s unlikely that Nokia would stop Mercedes from selling cars

It’s unlikely that Nokia would stop Mercedes from selling cars in Europe. It just wants to see the courts enforce the same arrangement it already has from other European manufacturers. Whether Mercedes caves or not we’ll have to wait and see. 

But if Mercedes can’t stop the fee-based arrangement it could open the floodgates for other companies to start charging Mercedes in this fashion. So Mercedes doesn’t want the precedent set. The difference is that most all other suppliers don’t have the leverage that Nokia has. 

For whatever it is going to take to overturn the suit might be better spent paying the free and going on with life. But that’s not how Mercedes sees it. We’ll have to wait and see how this shakes out.