Mercedes-Benz may face German sales ban after Nokia wins patent ruling

Daimler AG could face a sales ban in Germany after Nokia Oyj won its first court ruling in a larger patent dispute, giving the Finnish company leverage in its fight with the iconic carmaker over mobile technology used in new vehicles.

Daimler violated Nokia’s mobile-technology patents in its cars, judges in Mannheim said Tuesday in a ruling that would allow Nokia to stop Daimler from selling vehicles in Germany. But Nokia would have move to block sales in a separate proceeding, and would need to post collateral of 7 billion euros ($8.3 billion) to enforce it.

“We cannot understand the verdict of the Mannheim court and will appeal," Daimler said in an emailed statement. “We don’t assume there’ll be a sales ban."

The ruling goes to the heart of how technology must be broadly and fairly licensed and the terms for mobile-telecommunication systems that all carmakers must use. The Mannheim court said it had to grant the case because Daimler wasn’t willing to abide to the rules.

“The facts show that Daimler and its supporters in the case aren’t willing to take a license," the court said in a statement. “Neither Daimler nor its supporters were seriously willing to take a license“ from Nokia under the industrywide fair-terms standards.

Nokia shares rose 1.2% at 10:31 a.m. in Helsinki, after declining as much as 1.4%, while Daimler shares rebounded to rise 0.3% in Frankfurt.

Carmakers in Europe are dependent on the technology to enable their autos for e-connectivity. Nokia has changed its model to deal directly with automakers, cutting its interactions with parts makers. As a result some suppliers, including Continental AG and Robert Bosch GmbH, are supporting Daimler in the litigation as associated parties.

“Today’s finding is a major endorsement of the long-term engineering work by innovators at Nokia and the important principle that innovators should receive a fair reward for the use of their inventions," Jenni Lukander, president of Nokia Technologies, said in a statement. “We hope that Daimler will now accept its obligations and take a license on fair terms. There is more to gain if we work together."

The winners in patent suits must weigh the risk of enforcing rulings, which include the possibility of massive damages should the injunction be overturned on appeal. That’s also why courts require the winners to set aside a large sum before allowing enforcement of a sales ban.

Under the ruling, Daimler also must give Nokia data on the number of automobiles it sold with the technology.