- Daimler is in a dispute with Nokia over royalties for patents that cover some connected-car tech.
- The Mercedes parent company as well as Apple and 25 other companies have signed a letter to the European Commission about, basically, patent trolls.
- At issue are SEPs, foundational patents that are needed for an industry to work and grow.
We don’t need to explain rpm or mpg to the Car and Driver audience, but when we’re dealing with SEPs and FRAND, some clarification is necessary. SEPs are Standard Essential Patents, which you can think of as foundational patents that are owned by someone but that a particular industry says should be licensable to anyone in a “fair, reasonable and non-discriminatory” (FRAND) basis.
We mention this because of a letter that 27 companies have sent to the European Commission this week regarding the limits that some patent holders are placing on their SEPs and how these limits are affecting connected vehicles. The letter isn’t solely about connected vehicles—it also mentions intelligent power grids, connected homes, and smart metering—but that’s the most applicable issue here. When it comes to connected cars, the Fair Standards Alliance (which supports FRAND handling of SEPs) says that SEPs are “needed for the creation of the next generation of wireless technology products” and when patent holders do not follow FRAND policies, they are increasingly undermining “the competitiveness of these important highly innovative industries, and [are] already harming technological innovation in Europe.”
The letter itself calls for a business environment where patent holders are fairly paid for their intellectual property in a “competitive and dynamic European market.” Instead, when some SEP owners grant licenses only to certain companies instead of anyone in the supply chain who can pay, it puts a monkey wrench in the ability of companies to plan their investments in research and development as well as production. “This practice stifles innovation, discourages new market entry, and ties suppliers to established customers,” the letter says.
Ford, Daimler and BMW/Mini have signed on to the letter, alongside automotive suppliers Continental and Denso as well as Apple. The letter itself did not mention who “some SEP owners” were, but Daimler told Car and Driver which company is causing problems: Nokia.
“At present, some of the patent owners refuse to license their Standard Essential Patents on reasonable and nondiscriminatory terms,” a Daimler spokesperson said. “One example is Nokia, who so far refused to comprehensively and directly license our suppliers on essential patents for telecommunications standards. Instead, Nokia aims to participate on added value created by others. In general, a commitment should be reached that ensures the competitiveness of innovative European industries as well as an appropriate compensation for the Patent Owners for what they invented.”
Earlier this month, Reuters reported that Daimler and Nokia agreed to enter mediation in their dispute over technology licensing fees for patents that involve navigation systems, autonomous vehicles and vehicle-to-vehicle communications.