No CJEU reference (yet) as Mannheim Court grants injunction in Nokia v Daimler in further return to old Orange Book days

In a slightly puzzling decision out of the Mannheim Regional Court’s Second Civil Chamber, an injunction potentially preventing sales of Mercedes vehicles in Germany has been issued. Its press release (in German) can be found here.

The dispute in Case 2 O 34/19 between Daimler AG (the owner of the Mercedes-Benz marque) and Nokia Oyj relates to Nokia’s patent EP2981103, which the court today found to have been infringed by Daimler. The patent covers “allocation of preamble sequences for an access procedure in a mobile communication system,” i.e. telecommunications technology used in cars for e-connectivity. 

Daimler has argued that the enforcement of such an injunction would apply to around half its German sales. If Nokia sought to enforce the injunction to block Daimler’s sales on this basis, Bloomberg reportsthat security or a bond of €7bn would be required. This amount is held aside in case of a successful appeal by Daimler requiring Nokia to pay damages. 

The complicating factor is that the relevant patent is a Standard Essential Patent (SEP), meaning that fair, reasonable and non-discriminatory (FRAND) licensing offers should have been made by the parties under EU competition law. In this case, the press release states that the Court found that Daimler did not do so. The press release does not refer to Nokia’s offers. Pending review of the written decision, the compatibility and role of today’s decision with the conditions laid down by the Court of Justice of the EU (CJEU) in Huawei v ZTE, which also oblige the SEP Owner to make a FRAND offer, is going to raise some questions as to the state of German SEP/FRAND law.  The question that emerges in these current lines of German cases is: If an SEP Owner fails to show they are prepared to offer and enter into a FRAND licence, will that still justify the grant of an injunction under Huawei v ZTE if the defendant hasn’t made a FRAND offer? 

Although a reference to the CJEU was mooted in the proceedings, the Court instead decided the issue itself, arguably on the basis of the (former) domestic Orange Book Standard approach which first examines the conduct of the implementer (here, Daimler) (see also previous Kat posts on the seeming return to the Orange Book test here). It also claimed that the ‘manageable remaining term’ of the relevant patent militated away from making a reference. However, there is the possibility of a CJEU reference later in the proceedings, including perhaps on appeal.

Notably, this marks a (surprising) rejection of the request by Germany’s Federal Cartel Office (competition enforcement agency) that the Mannheim and Munich courts should refer certain legal questions in component-level licensing cases to the CJEU (reported here by JUVE Patent). It remains to be seen if the refusal will have any effect on whether the Commission chooses to instigate competition enforcement investigations into Nokia’s conduct, in the absence of authoritative answers from (or a pending reference in) the CJEU.

Nokia must now decide whether to enforce the decision (and put up the security), bearing the risk of a successful appeal by Daimler, which has already signalled its intention to do so. In any case, the automotive SEP patent wars rumble on in the German courts as the Orange mists of the past descend.