A dispute between Finnish telecoms company Nokia and German automaker Daimler has been referred to the European Court of Justice (ECJ) by a German court on Thursday over a licensing patent dispute.
European Court of Justice, Aussen, Luxembourg
The dispute is being fought between the two companies over royalties for technology Nokia provided for navigation systems, vehicle communications and self-driving car infrastructure in Daimler vehicles.
It revolves around whether or not the standard technologies used in 4G networks provided by the Finnish giant that provides information to connected vehicles and whether or not Nokia is fairly providing the terms.
The German court hopes the ECJ can clarify the law as it applies to supply chains.
In response, the European Commission is looking into whether or not certain legal patents are essential for technology integration and to reduce argument over their use.
Commission Vice-President Margrethe Vestager, who has recently been going after American tech companies, said in a Brussells statement: “It’s a welcome development that the European courts will pronounce on these very tricky questions. As you know we have tricky cases exactly in this area.”
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The case revealed that Nokia currently earns around €1.4 billion annually from licenses, but the court-ordered freeze effectively means Daimler get to use this particular patent for free.
Nokia responded to this with a statement, which read: “Daimler has been using Nokia’s technology for 14 years and has looked for every avenue to avoid payment. In light of today’s decision, we will now consider our options."
Daimler approved of the court's decision, saying it would answer patent-based questions on a pan-European level.
Nokia is currently contracted to handle several transitions towards 5G networks both within Europe and further afield following Chinese provider Huawei's ousting from large swathes of the continent owing to a US-backed coalition.
This means they have a significant position of power in the European tech market.
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Nokia has revealed it should have discretion at where on its supply chain it should start offering licenses.
Daimler countered by saying that, under European single market rules, the telecoms giant is obliged to offer unlimited licenses for all uses relating to standard patents.
Nokia has been granted permission to seek an injunction against Daimler but the courts worry this could represent them abusing their dominant market position.
Daimler and Nokia are both involved in numerous court cases and both have managed to scrape two rulings each that landed in their favour.
The German court suspended proceedings awaiting clarifications of a list of related questions for the ECJ.
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