Daimler has agreed to buy 3G and 4G licenses directly from Nokia, ending a long-running intellectual property dispute that could have forced the German group to suspend production and sales of its cars and trucks.
The Mercedes-Benz maker has been sued in several German courts for refusing to buy licenses for technology that connects in-car navigation and entertainment systems to the Internet and supports semi-autonomous driving capabilities.
While competitors such as Volkswagen bought the licenses, the premium manufacturer refused, arguing instead that Nokia should license suppliers such as Continental and Bosch, who build the remote control units on which the connected technologies are located.
In its legal filings last year, Nokia asserted that it had offered Daimler a fair price for the licenses and that it was entitled to recoup the billions of euros spent developing its inventions.
series of Last year’s provisions against Daimler which, if imposed, would have prevented the manufacturer from building or selling cars equipped with technology based on Nokia’s patents. But Nokia chose not to pay billions of euros in bonds to enforce an injunction before hearings appeals against the rulings later this year, including one referral to the European Union’s Court of Justice.
Daimler’s decision to settle the case ends all legal proceedings between the two companies.
“The agreement is a very important milestone as it confirms, once again, the quality of our patent portfolio, Nokia’s R&D contribution to the connected car industry, and the growth opportunities for our car licensing program,” said Jenny Lochander, president of the company. Nokia Technologies.
In a one-line statement, Daimler, which has a large manufacturing base in Germany, said: “We welcome the settlement – from an economic point of view and because we avoid protracted court disputes.”
Neither party disclosed the financial terms of the agreement.
Nokia still faces a separate legal battle with Continental in US courts.
The Dax-listed supplier, which along with Bosch supported the Daimler case in German courts, filed a complaint with the European Commission, arguing that Nokia is abusing its dominant market position.
Nokia, which favors end product licensing rather than component manufacturers, claims it “consistently offers fair licensing offerings, providing a range of flexible approaches – directly to automakers, Tier 1 suppliers and through its volume licensing suite alongside other industry players.”
However, Continental maintains that these offers were not fair, reasonable and non-discriminatory. “Nokia pledged to license anyone, but it did not deliver on that promise,” said a person close to the company.
With the increasing importance of so-called “over the air” software updates in cars, German parts makers worry that the Daimler settlement may set a worrying precedent that could hurt the competitiveness of companies in Europe’s largest economy.
Companies, which also sell connected devices, want to be able to offer a fully licensed product to their customers.
“German courts tend to issue injunctions even if the party being sued does not manufacture the product, and has not been offered a license,” the person added.