Daimler Ends Nokia Spat With Royalty Payment Agreement

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End of hostilities between Nokia and Mercedes owner Daimler, after the car maker finally agrees to make royalty payments to Finnish giant

Daimler and Nokia have confirmed they have signed a patent licensing agreement, ending years of legal battles between the two firms.

“Under the agreement, Nokia licenses mobile telecommunications technology to Daimler and receives payment in return,” the announcement states. “The parties have agreed to settle all pending litigation between Daimler and Nokia, including the complaint by Daimler against Nokia to the European Commission.”

Exact terms of the settlement remain confidential, but it is clear that Daimler has effectively lost the battle, and will join other car makers such as Audi, Bentley, BMW, Porsche, Rolls Royce, Volkswagen and Volvo, that already pay patent fees to Nokia.

Payment agreement

The case has been ongoing for some years now.

In December 2019 Nokia temporarily halted legal action against Daimler, as it sought to bring the car maker into mediation talks over the patent licensing dispute.

That move came as Nokia sought to avoid a European Commission investigation into its patent licensing practices related to the increasingly critical areas such as self-driving cars and navigation systems.

Daimler, as well as Bury Technologies, Continental, Valeo and Gemalto had filed a complaint with the Commission earlier in 2019 about Nokia’s fees for patents related to car communications.

Nokia has launched 10 court cases against Daimler in Germany over alleged patent infringements, while Daimler has filed its own lawsuits against Nokia.

Essentially, the dispute centres over tech firms wanting car makers to pay royalties for technologies used in navigation systems, vehicle communications and self-driving cars.

However car makers argue their suppliers should pay the royalty instead, which could reduce the fees for patent holders.

Other wins

This is not the only royalty payment success that Nokia has enjoyed of late.

In April Nokia concluded a multi-year, multi-technology patent cross-license agreement with Lenovo.

That saw Lenovo make an undisclosed payment to Nokia to resolve the issue, and the terms of the deal remain confidential.

In March this year Nokia also signed a deal with Samsung, which saw the South Korean company agreed to make royalty payments for its technologies related to video standards.

According to Reuters, Nokia makes 1.4 billion euros ($1.7 billion) in licensing revenues every year.

And the latest payment will be welcome news as Nokia’s finances have been under pressure for years now, and in February 2020 a report suggested the firm was exploring its strategic options, including potential asset sales or mergers.

There is no doubt that Nokia is facing fierce competition, as it competes with the likes of Huawei, Ericsson, Cisco and Samsung in the 5G equipment sector.

Earlier this year Nokia confirmed it will slash 10,000 jobs worldwide over the next two years, in an effort to invest more in its research capabilities, as it seeks to improve its 5G credentials against the likes of Huawei and Ericsson.

It should be noted that the Nokia agreement with Daimler will not resolve the EC payment fees complaint against the Finnish networking giant from other firms.

Continental, Bury Technologies, Valeo, and Gemalto are not dropping their complaint nor legal fight in the United States.

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Author: Tom Jowitt
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