Tuesday, March 17, 2020

Daimler slows down production due to coronavirus, potentially reducing impact of patent injunction Nokia is pursuing

Daimler announced today that most of its production in Europe will be suspended for (initially) two weeks, starting this week. "An extension of this measure will depend on further developments," the announcement notes.

The reasons for this are apparently a mix of protecting Daimler's workforce, containing the spread of the virus, lower demand, and supply-chain issues.

The overall situation may have an impact on Daimler's antitrust and patent dispute with Nokia (see th previous post on Continental's statement accusing Nokia of impeding innovation in the automotive supply chain). On April 9, Nokia hopes to obtain a patent injunction--over a patent that will most likely turn out invalid in the further process and based on an absurd misreading of the CJEU's Huawei v. ZTE ruling--from the Munich I Regional Court. Even if Nokia succeeded without merit, the question would be what impact the injunction would actually have--not only because it is limited to a list of specified suppliers of telematics control units, but also because reduced production volumes during the coronavirus crisis might make the situation easier to manage.

If Nokia coerced Daimler into a settlement, the problem of SEP holders like Nokia refusing to license component makers still wouldn't have been solved. The suppliers would have no reason to withdraw their EU antitrust complaints. If anything, such a course of events would add another element of abuse.

Time is of the essence for Nokia. A hypothetical win would very likely be reversed. The appeals court won't stay the injunction the next week or so, but it won't need too many months either. Under the overall circumstances mentioned above, there is a possibility that Daimler won't come under pressure until the appeals court has spoken.

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