Friday, October 30, 2020

Fourth patent injunction against Daimler in 11 weeks as Munich I Regional Court sides with Nokia in 3G SEP infringement case

There's no Happy Halloween for Daimler and its counsel, and the reason is not even COVID.

The notorious patentee-friendliness of certain German courts is regrettable, and an increasing burden on the country's economy. But let there be no doubt about the fact that the patent litigation firm of Arnold & Ruess has done some first-rate work for Nokia against Daimler. Today the team led by Cordula Schumacher and Dr. Arno Risse ("Ri├če" in German) obtained its second injunction against Daimler as the Munich I Regional Court held the Mercedes maker to infringe German patent DE60240446C5 on a "hybrid automatic repeat request (HARQ) scheme with in-sequence deliver of packets" (case no. 21 O 3891/19). The 21st Civil Chamber of the Munich court (Presiding Judge: Tobias Pichlmaier) had not indicated an inclination at the late-July trial.

On August 18, 2020, the Mannheim Regional Court found for Nokia in another standard-essential patent (SEP) infringement case against Daimler; that injunction hasn't been enforced and possibly never will be.

Several other Nokia v. Daimler cases have been put on hold over doubts concerning the validity of the patents-in-suit. Should any of those patents survive without being narrowed out of the scope of the specifications of the relevant cellular standard, they'll do even better.

Meanwhile, I'm wondering when Quinn Emanuel will get tired of losing. In the 11-week period between the aforementioned defeat in Mannheim and today's Munich ruling in Nokia's favor, Daimler and QE also lost two other cases as the Munich I Regional Court's 7th Civil Chamber (Presiding Judge: Dr. Matthias Zigann) granted Sharp an injunction against Daimler (which triggered a settlement, see 1, 2), as did the 21st Civil Chamber in a Conversant v. Daimler case just one week ago. That's four German SEP injunctions over the course of only two months and a half.

Daimler and QE could take comfort in the fact, however, that computer maker Lenovo also lost in Munich (against Nokia, but over a codec--not wireless--patent) on the first day of the month.

Three high-profile SEP injunctions (Nokia v. Lenovo, Conversant v. Daimler, and now Nokia v. Daimler) clearly make Munich by far the most attractive venue for plaintiffs, and the court is damn proud of that fact (as I noted in my report on the presentation of the results of a survey, I don't think the "evaluation" of the court's performance does the judges justice because their technical and legal competence is not an issue--only their pro-patentee application of the law is).

Just like in the Conversant case, but with far higher stakes (and so much more time and money having been spent on the Nokia dispute), Daimler now needs the appeals court to stay the enforcement of this injunction. The prerequisite collateral (for enforcement during the appellate proceedings) of little over $20 million is easily affordable to Nokia while the actual damage to Daimler would be in the billions of dollars per year. And as I noted in the Conversant context, Daimler could be roughly six weeks closer to a decision by the Munich appeals court that might set the record straight at least on the proper security amount, if not also on the application of the CJEU's Huawei v. ZTE case law, if not for Daimler's inexplicable decision to settle with Sharp in the summer.

This is now a race against the clock. We're only 13 days away from a highly likely referral of key component-level SEP licensing questions to the CJEU. The Dusseldorf Regional Court will announce its decision on November 12, and I'm extremely optimistic about what's going to happen there. But that referral doesn't automatically trigger a stay of all other cases. It may, however, bear substantial weight with the Munich Higher Regional Court. Additionally or alternatively, it would also help Daimler if the Munich appeals court simply set a reasonable security amount (i.e., in the billions of euros).

Almost two years ago, Daimler filed an EU antitrust complaint against Nokia that hasn't gone anywhere. Nokia has been able to count on support from the EU's internal market commissioner Thierry Breton even to the extent that he would spout total nonsense. But Daimler is apparently such an old-fashioned, poorly-run company that they don't even know how to press an antitrust case in Brussels. I've seen antitrust amateurs who are better at this game than them, any day of the week.

Daimler is also one of the three companies responsible for the most stupid strategic misstep in the ongoing German patent reform process, so they'll have no one to blame but their own incompetence for the German patent injunction problem probably not getting solved anytime soon. In that context, one of their key competitors, BMW, made the mistake of joining them. That's another very old company that appears unfit for the Digital Economy. There are days when I feel very un-German. Today is definitely one of them. I don't think anyone can help certain companies. They're losers and they don't even realize to what extent that is their own fault.

If I find anything in the court's written decision, which will be handed down early next week, that sets this case apart from the Conversant case, I'll write about it. But the outcome suggests the issues were just the same, except that Nokia, unlike Conversant (and previously Sharp), hasn't granted an exhaustive component-level SEP license to Huawei.

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