Daimler, the mother company of the world-famous car brand Mercedes-Benz, has lost to Nokia in the law case over the royalties for connectivity technologies.
Nokia has won the lawsuit against the multinational automotive giant Mercedes Benz. After a long-running dispute between Nokia and Mercedes Benz, the German court in Mannheim has arrived at the verdict in favour of the Finish telecommunication firm.
According to the judges, Daimler, the owner of Mercedes Benz, has violated the intellectual property law by using the patented technology of Nokia without authorization on its vehicles and did not show serious effort to resolve the conflict. The dispute between the two firms has shed a light on the broader clash between tech companies and the automotive industry over the royalties for the use of connectivity technologies in cars. As we all know, the connectivity techs have now become increasingly common in the car industry, hence, playing a vital part in the success of every car brand.
Commenting on its win over Daimler, Nokia shared that it is an important step toward advocating the “long-term engineering work by innovators at Nokia and the important principle that innovators should receive a fair reward for the use of their inventions.” On Daimler side’s, the firm showed its dissent against the court’s decision, saying “we cannot understand the verdict of Mannheim court and will appeal [the decision].”
Nokia requires royalties for each vehicle sold under its license program. However, in its defence, Daimler claims that the cost is too high and proposes Nokia to send the license to Daimler’s supplier. This solution is strongly opposed by Nokia, saying that other car manufacturers like Volkswagen, BMW Groupe are following the same licensing plan.
At the moment, Daimler has two choices, either pursuing the lawsuit or complying with the licensing dealer. Nokia’s patented technology is a crucial part of Mercedes-Benz connected cars. It is unlikely that Mercedes Benz will give up on this lawsuit. In fact, it seems that the automotive firm will continue the court case since they already filed different lawsuits in different court against Nokia’s patent deal.
After the verdict was announced, Nokia now has the right to terminate the sales of Mercedes cars in Germany. However, there is a slim chance that Nokia will take this action as it would also require the company to post collateral of them over 7 million Euros. It is more likely that Daimler will agree to the licensing deal and pay the royalties for each individual vehicles sold as Nokia’s requirement. However, Mercedes Benz as well as its supplier will be strongly affected by this licensing deal because every vehicle from the German car brand is relying on Nokia’s cellular technology.