Daimler has agreed to pay Nokia for using its patents, ending a row that highlighted a battle between tech and car companies over royalties for key technologies. Every year in licensing revenues, Nokia makes 1.4 billion euros ($1.7 billion). Carmaker Daimler had sued each other in German courts in recent years, with mixed results.
Tech firms want automakers to pay royalties for technologies used in navigation systems, vehicle communications and self-driving cars. The agreement announced jointly marks the latest win for Nokia which in April struck a deal with China’s Lenovo under which the world’s biggest PC maker would make a net balancing payment to the Finnish telecoms equipment maker and resolve all pending litigation. That followed another deal with Samsung. The terms of their patent licensing deal were not disclosed by Nokia and Daimler. But they would halt the litigation they said.
A Daimler spokeswoman said that they welcome the settlement, from an economic point of view and because they avoid lengthy disputes. Danske Bank analyst Mads Rosendal said that the deal is good for Nokia. He added that the revenue stream is not likely to be material but at the very least it will be very stable and high margin. Also, ending of the dispute should save a fair amount of legal costs going forward. Nokia receives fees of a little over $2 per vehicle under patent licensing deals for similar technologies.
German car parts maker Continental, which together with Daimler, Bury Technologies, Valeo and Thales-owned Gemalto complained about Nokia’s patent fees to EU antitrust regulators in 2019. They said it was not dropping its complaint nor legal fight in the United States. It urged the European Commission to set out a binding patent licensing framework. Audi, Bentley, BMW, Mini, Porsche, Rolls Royce, Seat, Skoda, Volkswagen and Volvo already pay patent fees to Nokia.