Thursday, February 4, 2021

Nokia sought to enforce shaky patent against Daimler just prior to expiration, but Mannheim Regional Court said no

Nokia is part of a coalition of companies with a strong interest in patent monetization, and that group is at least 100 times better at IP policy than the entire German automotive industry and Deutsche Telekom combined. Nokia and its friends have lobbied the German legislature to the effect that from the far left to the far right, there's stiff resistance to anything that would significantly limit patentees' access to injunctive relief.

Lately, however, Nokia's litigation results are clearly not at a level with its lobbying sucess stories. Chinese computer maker Lenovo, supported by an intervening supplier (Nvidia), has defended itself so successfully against what Nokia apparently thought were its best H.264 video codec patents that the FRAND royalty for that particular portfolio might even amount to zero. And even in Nokia's primary domain, cellular standard-essential patents (SEPs), enforcement efforts are about as "successful" as Nokia's handset business (which some of us remember, but today's teenagers know only from hearsay) was eight or nine years ago.

Yesterday (February 3, 2021), Presiding Judge Dr. Holger Kircher of the Second Civil Chamber of the Mannheim Regional Court entered a scheduling order: the trial in Nokia v. Daimler case no. 2 O 37/19 over EP1273199 on a "method and arrangement for maintaining synchronization in association with resetting a communication connection" will take place on June 22, 2021--more than two months after the patent's expiration date (the priority date according to Google Patents was April 10, 2000, so the 20-year-term will end in about two months).

Last summer, that case got stayed pending a nullity proceeding before the Federal Patent Court. The court indicated its strong inclination to stay the case (forcibly if need be) and urged Nokia to stipulate to a stay. Nokia's counsel obliged, but filled several more pages arguing why the patent was novel or at least inventive over some prior art references Daimler had added to its list.

At that time, Nokia told the court that it expected the Federal Patent Court to issue its preliminary non-binding opinion ("qualifizierter Hinweis") before the end of the year, but the patent would expire not long thereafter, so Nokia already asked the court to schedule a trial as soon as possible after the preliminary opinion.

It took the Federal Patent Court a little longer than Nokia thought, but on Friday (January 29, 2021), it sent its preliminary opinion to counsel. Those preliminary opinions reflect some inclination on the court's part, but unless the picture is very clear (such as the court saying that each of three prior art references independently renders the claimed invention non-novel), the outcome at the conclusion of the nullity trial could still differ significantly.

In the case of EP'199, the court appears presently considers the claimed invention novel and inventive. The Federal Patent Court is also unconvinced of another invalidity theory--impermissible broadening of scope--but writes that "this is to be discussed" at the nullity trial on March 17. When a preliminary opinion contains a wording like that, it's more of an invitation to provide further briefing than anything else.

With the patent set to expire shortly, Nokia won't get to enforce an injunction over it. It can still seek damages, but that's the only remedy post-expiration. It's interesting that Nokia urged the Mannheim court to decide the case in time for Nokia to still be able to enforce the patent for a month or two. The collateral that Nokia would have had to post in that hypothetical scenario wouldn't have amounted to billions of euros (as it did in some other cases where there would have been more time left to enforce). So Nokia could have afforded it, and could have sent out a signal to Daimler and others that it's a merciless enforcer of injunctions. It's doubtful, however, that Daimler would have had to settle in order to avoid a short-lived enforcement. With the scheduling order from Mannheim, there's no such risk anymore.

The most important legal issue in those Nokia v. Daimler cases is the entitlement of automotive suppliers to an exhaustive component-level license on FRAND terms. The Dusseldorf Regional Court's referred to the Court of Justice of the EU certain component-licensing questions, which Nokia appealed. The Dusseldorf Higher Regional Court will almost certainly uphold that referral later this month, and seize this opportunity to provide input to the top EU court of the kind Nokia won't welcome.

There's recently been only one piece of good news for Nokia on the litigation front: the European Patent Office affirmed a Nokia SEP in an opposition proceeding. That case will go to trial in Munich in the summer. But in the meantime, some key decisions addressing FRAND issues (including, but not limited to, component-level licensing) will be handed down by the appeals courts in Karlsruhe (where all Mannheim appeals go) and Munich (which could effectively render that next Nokia v. Daimler trial inconsequential).

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