In the patent war that holders of mobile communications patents are waging against the auto industry on a broad front, the Daimler group suffered further defeats last week. In two proceedings, the Munich District Court I sentenced the car manufacturer to cease and desist, and there is a ban on the sale of affected vehicles. While Daimler wants to appeal, Huawei throws itself into the breach again as a licensee. Meanwhile, it is eagerly awaited whether the Düsseldorf Regional Court will consult the European Court of Justice next week.
Last Friday, the district court Munich I found the Daimler group guilty of using the Nokia patent DE60240446C5 for a Procedure for packet processing in cellular networks to violate (Az. 21 O 3891/19). According to Nokia, the process is an essential part of the UMTS standard. In doing so, the Daimler group infringes this patent with every car that has a modern mobile radio unit installed. The Chamber of the Regional Court considers this to be proven and has sentenced Daimler to cease and desist and to pay damages. “The judgment is enforceable with regard to the conviction to cease and desist against a security deposit of 18 million euros,” said a court spokesman.
Daimler does not expect a sales ban
A week earlier, the same chamber had convicted Daimler in a similar case. The plaintiff is the patent administrator Conversant, who brought a standard-relevant mobile communications patent back to Nokia (Az. 21 O 11384/19). The cell phone units installed in the Mercedes vehicles are attacked in all of the lawsuits. Daimler will appeal in both cases, a spokesman told heise online. In addition, the group does not expect any short-term consequences for the sale of its vehicles. “We do not assume that there will be a production or sales stop.”
Such a sales ban is theoretically conceivable. Nokia and Conversant could enforce the judgments if they deposit a certain amount as security. This security deposit is intended to cover possible damages should the judgment be overturned in the next instance. The Munich court sets the amount of security to be deposited comparatively low: In the Nokia case it is 18 million euros, in Conversant only 5 million. The Mannheim Regional Court ordered a security deposit of 7 billion euros in a similar procedure in August.
Lenovo also affected
The most recent proceedings for standard-essential patents also address the question of whether the patent holder can force the manufacturers of end devices – in this case the car manufacturers, but in other proceedings such as against Lenovo also electronics companies – to obtain a license, or whether they cannot force the suppliers of the affected parts have to give a license. The holders of standard essential patents are fundamentally obliged to grant a license to an interested party under fair and transparent conditions (so-called FRAND principle). That is why Daimler sticks to its view that “a company cannot be prohibited from using such patents if its suppliers are also willing to accept licenses,” said the spokesman.
Daimler now wants to clarify this in the appointment. The validity of some of the patents brought against the automotive industry is also up for debate. However, it is probably the turn of the European Court of Justice (ECJ) first. Because the disputed question is also the focus of another patent dispute brought by Nokia at the Düsseldorf Regional Court (Az. 4c O 17/19). While other courts have so far paid little attention to the objections of the Daimler suppliers that they had unsuccessfully applied for a license for the patents, the Düsseldorfers are more skeptical. The judge who chaired the proceedings, Sabine Klepsch, has already indicated that she would like to refer this central question to the ECJ for clarification. The decision is expected in the coming week.
“Desperate and Brutal”
Litigation observer and patent expert Florian Müller criticizes the courts in Munich and Mannheim for serving the interests of patent owners. “All eyes are now on the Düsseldorf regional court in the automobile patent disputes,” said Müller to heise online. “If this refers certain legal questions about the license claims of the suppliers to the Court of Justice of the European Union on Thursday next week, the question will be decided in Luxembourg.” Nokia’s attacks are “just as desperate as they are brutally carried out attempts” to bring Daimler to its knees before a decision by the ECJ.
Meanwhile, the suppliers are creating facts, which also suggests that the plaintiffs are not that sure about their cause. The patent holders have now signed a license agreement with the supplier Huawei in two proceedings. At the beginning of October, Sharp reached an agreement with Huawei and Daimler. As can be heard from business circles, there is also an agreement with Huawei in the Conversant case. This puts Daimler off the hook for these patents.
The Federal Government now wants to address the fact that the patent law injunction claim is not always proportionate in view of long-standing court proceedings and far-reaching consequences for the companies concerned, with a reform of patent law. The would like to write a hardship rule into the law, which enables judges to “make the appropriate decision in each individual case”. In principle, however, the injunction should not be abolished.