Tuesday, April 11, 2023

Will another smartphone maker exit Germany? Mannheim court grants Nokia 4G patent injunction against Vivo, previously enjoined OPPO over same patent

A spokeswoman for the Mannheim Regional Court has just confirmed to me that the court's Second Civil Chamber (Presiding Judge: Dr. Holger Kircher, who is also going to serve on the Unified Patent Court) entered a patent judgment in favor of Nokia on Thursday (April 6) against Vivo (which prefers to spell its name in small caps: "vivo").

The patent-in-suit is EP2981103 on an "allocation of preamble sequences". The Mannheim court enjoined Daimler over the same 4G standard-essential patent (SEP) in 2020, and OPPO about a year ago.

Primarily because of that injunction (and its subsequent enforcement), OPPO withdrew from the German market and hasn't come back, though some resellers (such as T-Mobile) still had OPPO devices in stock for a limited time. That dispute is still pending after more than 21 months as Nokia has not been able to gain leverage in a key market for OPPO..

OPPO never had a huge market share in Germany, but for what I know, Vivo's is a lot smaller. Vivo is the high-volume Android device maker in China now (the largest local player in that market), and also sells high unit volumes in certain other markets. They're successful in Asia and even beyond, but not really big in Europe. That raises the question of what will happen now: will Vivo do what OPPO has already doneand just exit the German market, or will Vivo settle on Nokia's preferred terms in order to be free to grow its German business?

We should find out soon. Nokia is known to enforce such injunctions relentlessly. And a settlement would obviously be announced.

Just like in the dispute with OPPO, Nokia has yet to win anything in a market that matters more to Vivo than Germany does. For instance, Nokia recently lost in Indonesia. That fact makes it a possibility that Vivo, too, will rather leave Germany than be required to raise its prices on a global basis, including in very price-sensitive markets in which it would adversely affect Vivo's competitiveness.

As someone who frequently comments on competition issues, I would like the idea of a high-volume low-cost smartphone maker like Vivo acting as a key competitive constraint on other vendors. At the same time, I can see why a company that sells the largest part of its unit volume in price-sensitive markets has to keep its costs under control--including its IP licensing costs.

Vivo is countersuing Nokia in Germany, so it's conceivable that at some point Vivo could obtain one or more German patent decisions and have greater leverage over Nokia, which would likely find it much harder to comply with a German injunction.

I'll try to find out about the status of other Nokia v. Vivo and--potentially--Vivo v. Nokia cases.