Fair reward for technology inventors, to enable the next generation of innovation in the automotive industry
- Nokia is a pioneer and a major contributor to cellular standards and holds one of the world’s strongest patent portfolios of connectivity technologies.
- Although automotive OEMs have been using Nokia’s technologies for years, some players refuse to take a license from Nokia.
- Despite ongoing litigation, Nokia’s offers for automakers to take a license on fair terms remain open
Nokia is one of the leading inventors and patent owners for the fundamental communication technologies used in mobile devices and connected vehicles.
Nokia is one of the foremost contributors of technology to the cellular standards, investing approximately €4 billion a year in R&D. Over the past two decades, Nokia has invested more than €129bn in R&D, resulting in a leading portfolio of patents relevant to all generations of cellular standards, from 2G to 5G.
Nokia contributes its cutting-edge cellular technologies to open standards in return for the right to license them on fair, reasonable and non-discriminatory (FRAND) terms. Companies can license and use these technologies without the need to make their own substantial investments in R&D.
The availability of such cellular connectivity technologies has enabled automotive manufacturers to bring connectivity to their vehicles. Automakers usually charge a significant premium for the enhanced safety, information and entertainment features enabled by these technologies.
Our licensing practices have been established over many years, and many automotive brands are already licenced for their connected vehicles.
Nokia is well known for its licensing program for smartphones with around 200 licensees across a range of connected devices. Our licensing offers guaranteed access to Nokia technologies for all relevant parties in a supply chain through a single license at the smartphone or end-device level. The huge success of the smartphone sector, with it’s many diverse competitors and new market entrants, attests to the success of this framework.
The increasing use of standardized communications technologies in the automotive market led to Nokia establishing an automotive licensing program in 2015, and the company has since been in licensing negotiations with most companies in the market. Many automotive brands, including Audi, Bentley, BMW, Mini, Porsche, Rolls Royce, Seat, Skoda, Volkswagen and Volvo are already licensed to Nokia’s patents for their connected vehicles. These agreements have been concluded on an amicable basis confirming that the licensing offers made available by Nokia have been viewed as fair and acceptable by the automotive industry.
When certain players continually refuse to take a license from Nokia, litigation becomes the only option.
Nokia has continually made fair offers for licencing, providing a range of flexible approaches – direct to automakers, to tier-1 suppliers and through a collective licencing pool alongside other players in the industry. Yet Nokia’s technologies were still put into use in connected vehicles by certain companies without first having agreement on license terms. So, after these fair offers were systematically refused as part of an apparent hold-out strategy, litigation has in some situations become the only way protect our valuable inventions from being used without authorization and compensation. Despite such developments, Nokia has at all times remained open for constructive discussions to find solutions and to reach an amicable agreement.
Some unwilling licensees have sought to improve their negotiation position by making allegations that Nokia’s licensing approaches would be anticompetitive.
There is no basis to allege that Nokia’s court actions in Germany are a violation of EU competition laws. Nokia has carefully followed the legal framework set out by the European Court of Justice and has made several FRAND offers available before pursuing legal action. The German Courts have the authority to review whether Nokia’s offers have been FRAND and will use their discretion to judge whether to grant Nokia an injunction against a party that has refused such offers.
The EU Commission’s DG Competition has reviewed complaints made to it. As part of the normal process of reviewing such complaints, Nokia has answered questions from DG Competition and has explained why the allegations are without merit. Nokia has further explained the difficulties in getting the complainants to seriously engage in negotiations.
The Commission has, so far, refrained from opening a formal investigation. Given the facts of the case, Nokia sees no basis for a claim that Nokia has violated EU competition law.
What happens next?
Nokia’s has multiple patent actions ongoing in Germany. These cases continue to proceed and the courts will be making judgments in 2020. The case that was decided in the first instance by the Mannheim court on 11 February is one of many patent infringement actions filed by Nokia to address the unauthorized use of our technologies in the automotive market. Despite the findings of the Mannheim court with respect to this one patent, we are confident that our position in the overall dispute remains strong as Nokia is one of the leading inventors and patent owners for the fundamental communications technologies used in connected vehicles.
In November 2019, Nokia offered mediation as an attempt to get counter-parties to the negotiation table and in the hope of reaching a definitive and amicable conclusion. As reported in the media, talks are still ongoing. As always, Nokia remains open to settle ongoing disputes on fair terms.
Nokia remains committed to a balanced licensing framework that allows others to benefit from Nokia’s inventions against a fair reward for those who have innovated. We believe there is more to gain if industrial parties focus on working together for the enablement of the adoption of new technologies rather than waste resources in fighting in courts.
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