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Daimler has agreed to buy 3G and 4G licenses directly from Nokia, ending a long-running dispute over intellectual property that could force the German group to suspend production and sales of its cars and trucks.
The manufacturer Mercedes-Benz has been sued in several German courts for refusing to purchase licenses for technology that connects car navigation and entertainment systems to the Internet and is based on semi-autonomous driving ability.
While competitors like VW bought the licenses, the premium manufacturer was concerned about the cost and instead of licensing suppliers like Nokia Continental and Bosch, they had to build units for telematics control with connected technologies.
In its legal filings last year, Nokia maintained that it had offered Daimler a fair license price and that it was entitled to recover the billions of euros spent on the development of its inventions.
A series last year’s rulings It went against Daimler, which, if enforced, could prevent the manufacturer from building or selling cars equipped with technology based on Nokia’s patents. But Nokia has decided not to pay a billion-euro bail to enforce the order before hearing appeals against the verdicts this year, including one aimed at the EU Court of Justice.
Daimler’s decision to resolve the case ends all legal proceedings between the two companies.
“The agreement is a very significant milestone, which once again validates the quality of our patent portfolio, the contribution of Nokia’s R&D to the connected vehicle industry and the growth opportunities of our automotive licensing program,” said Jenni Lukander of Nokia Technologies.
In a single-line statement, Daimler, which has a strong manufacturing base in Germany, said: “We welcome the solution – from an economic point of view and because we avoid lengthy legal disputes.”
Neither party has disclosed the financial terms of the agreement.
Nokia has yet another legal battle with Continental in US courts.
The Dax-listed supplier, along with Bosch, which backed Daimler’s case in German courts, has filed a complaint with the European Commission, arguing that Nokia is abusing its main position in its market.
Nokia prefers to license the final product rather than component manufacturers, “has made constant licensing offerings, offering a wide range of flexible approaches – to automakers, direct 1st tier suppliers and other industry players along with the issuance of collective licenses.”
However, Continental says those offers were not fair, fair and non-discriminatory. “Nokia promised to grant a license to anyone, but they are not fulfilling that promise,” said a person close to the company.
As “software” updates to car software become increasingly important, German parts manufacturers are concerned that Daimler’s liquidation could have a worrying precedent because it could hurt the competitiveness of Europe’s largest economies.
Companies that also sell connected devices want to offer their customers a licensed product.
“German courts usually issue orders, even if the party suing does not manufacture the product and does not offer a license,” the person added.
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