Nokia v Daimler: FSA regrets that important SEP licensing questions were not referred to the CJEU

Brussels, August 20, 2020 – The Fair Standards Alliance (FSA) regrets the Mannheim Regional Court’s Second Civil Chamber ruling ordering an injunction in Germany against Daimler over an alleged standard essential patent (SEP) owned by Nokia.

The FSA is disappointed that the court chose not to refer legal questions on licensing of SEPs to the Court of Justice of the EU (CJEU), despite the call of the German competition authority, the Bundeskartellamt (BKartA), to do so. The Mannheim court’s ruling also runs afoul of the legal framework provided by the CJEU in its Huawei v ZTE decision.

If the ruling is appealed, the FSA encourages and supports a referral by the appeals court to the CJEU of the questions identified by the BKartA. The CJEU could provide the much-desired legal certainty on SEP licensing and avert the divergence in national case law across Europe.

“The FSA has long advocated that injunctions in SEP disputes should be a last resort,” – said Robert Pocknell, the Chair of the FSA. “This court’s ruling shows how detrimental unfair SEP licensing can be, and how much impact such proceedings can have on business.”

Pocknell continued: “The decision threatens to have a broad negative impact on innovation, standardisation, and competition in key technologies, such as 5G and the IoT and on related industries.”

It is regretful that the court disregarded the BKartA letter sent in June the urging the Mannheim court to refer to the CJEU on several legal questions, including on SEP license availability across the production chain. The FSA believes that SEP licenses should be made available to any company in the production chain that requests a license.

The legal questions on SEP licensing are of considerable economic and legal significance, going beyond an individual case. The uncertainties arising from the continued refusal by SEP holders to grant licenses to many upstream market participants is stifling innovation and stalling the uptake of the IoT in Europe.

Questions on SEP license availability to companies across the value chain will define the future of innovation in Europe. Predictability on SEP licensing is critical for business to be able to plan activity, including investment into R&D.

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