Today the 21st Civil Chamber of the Landgericht München I (Munich I Regional Court) granted Conversant Wireless, a notorious standard-essential patent (SEP) troll, a Germany-wide injunction against Daimler over EP2934050 on an "apparatus and method for providing a connection" (a divisional of a patent Nokia once gave to Conversant).
While Daimler will presumably appeal, the injunction is immediately enforceable--absent an enforcement stay that the appeals court might order--if Conversant posts a bond or makes a deposit of a negligible amount. The Munich court bases the amount of the prequisite collateral not on the economic damage resulting from enforcement, but on the SEP holder's royalty demand. In a parallel case, Nokia is now enforcing a SEP injunction on that basis against computer maker Lenovo.
In the EP'050 case, Daimler had conceded essentiality, but disputed the validity of the patent-in-suit. Let me refer you to my report on the September 23 trial. Daimler's FRAND defense was futile because the Munich court turns the CJEU's Huawei v. ZTE on its head by focusing on the implementer's counteroffer and typically never reaching the SEP holder's licensing offer, apart from a less than cursory look. And the court believes that this follows from the Federal Court of Justice's recent Sisvel v. Haier decision, which dealt (among other things) with the question of whether an implementer was a willing licensee.
This is already the third German SEP injunction against the Mercedes maker in as many months:
On August 18, the Mannheim Regional Court granted Nokia a Germany-wide injunction against Daimler. However, Nokia would have had to provide security to the tune of €7 billion, which it couldn't afford, and at any rate, the injunction isn't being enforced because the appeals court (the Karlsruhe Higher Regional Court) wasn't going to let that happen while weighing Daimler's motion for an enforcement stay.
On September 10, the Munich I Regional Court's Seventh Civil Chamber granted Sharp an injunction against Daimler, and determined only a negligible security amount. Daimler appealed and requested an enforcement stay, but caved and took a license from Sharp. That decision will cost Daimler dearly. And it already has a negative effect on the Conversant dispute: had Daimler actually pursued its appeal and its motion for an enforcement stay, the Munich appeals court would already have had an opportunity to correct the lower court's Huawei v. ZTE misapplication and its approach to setting the amount of the collateral required for immediate enforcement. Those legal questions are now the same in the Conversant case, so the appeals court could have addressed those questions roughly six weeks earlier (October 23 vs. September 10)...
One of the key legal issues here is the right of component makers to a SEP license on FRAND terms. With the Dusseldorf Regional Court still being very likely (irrespectively of a Qualcomm initiative) to refer a set of component-level licensing questions to the Court of Justice of the EU on November 12, the Munich appeals court might be reluctant to let Conversant enforce its injunction against Daimler on a basis that the top EU court might later find to contravene EU competition law.
The fact that Conversant has now joined Nokia and Sharp in obtaining a Germany-wide Mercedes sales ban may have policy makers in Berlin concerned. The Federal Cabinet has patent reform on its agenda for next week. I haven't seen the draft injunction statute of the proposal they're probably going to adopt. So far, SEP injunctions weren't really the focus, but the pro-reform camp should raise the rapidly deteriorating situation on the SEP front with the Federal Parliament and try to have the bill amended so that proportionality considerations would apply to SEP cases on top of the antitrust-based FRAND defense.
In closing I'd just like to note that today's decision is yet another disgrace for the European Commission, which is totally responsible for what is going wrong in the automotive patent wars because of its regional protectionism favoring Nokia and Ericsson over Europe's automotive industry.
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