Recently a German court, in a SEP / FRAND matter involving Nokia and Mercedes maker Daimler Motors, issued an injunction against Daimler for its infringement of Nokia’s SEP. See press release issued by the court here in German (you may choose to automatically translate the press release in English).
Basically, Daimler had infringed Nokia’s patent EP2981103. This patent is related to Zadoff-Chu sequences. You might ask what is so great about Zadoff-Sequences: well they are the basic access signal in LTE. In particular, the patent uses ZC sequences in the preamble for random access (i.e. to connect the mobile unit to the base station) / PRACH signal. Those that are technically oriented may see TS 36.211 to see the use of the signal.
Florian Mueller, who broke out the news in his blog Foss Patents notes that Nokia may have to give a bond of € 7 Billion (yes – you-read-that-right) Billion – with the capital B.
Florian also points out the Court failed to follow an injunction roadmap as laid down in Huawei v. ZTE – with the patentee first making a FRAND offer, and the would be licensee would then have to give a counter offer (with reasoning as to why its offer was FRAND and not the licensors).
He also points out that the judgement was given despite the fact that Daimler’s component manufacturers approached Nokia to get a FRAND license – but were not licensed.
Whether or not Nokia is fined for obtaining an injunction against a willing licensee (suppliers included) as per Motorola Samsung cases remains to be seen. I would say that this is a shocking development. In the rest of the post, I will consider the implications for India.
For starters, I am thankful that this patent is not registered in India or else everyone from mobile phone manufacturers to car / truck makers would be under its domain.
And because it is not registered in India, this is evidence that my theory regarding illegality of portfolio licenses. This is a prime example of why each patent should be held to be consistent review and not all patents be licensed under portfolio terms. Just imagine, this is a key patent for Nokia – as it pertains to the very basic structure of the LTE uplink signal. All devices that use LTE, infringe the patent, and it is immaterial whether a person is in Europe, India, or the United States (as all use LTE, but see caveat below). But surprisingly it is not even filed here in India. And when it is licensed to anybody under a portfolio here in India, it is brazen violation of the law. What is the value of something that is not even registered here?
This also proves my theory about perversity of confidentiality clubs – this is the kind of information that is designed to be protected by the licensor. The inclusion of this patent here in a portfolio license for an India specific license is illegal.
Caveat – China is not covered because it was smart enough to develop its own LTE standard – called TDD LTE – and is somewhat different than the one is used elsewhere. And Chinese companies do not have to pay such absurd royalties to companies that are not from China. I wish we too had such a system! But anyhow, back to the post.
One can only wonder why this patent was not filed in India – perhaps it is clear that it is hit by Sections 3(m) and 3(n) (because it is presentation of structure of a signal) and also Section 3(k) and we may speculate that the person responsible took the call that it was not worth it to spend money here. Whether or not my speculation is correct about the person responsible, I believe that our law has moved to the opposite end of the spectrum given the recent Ferid Allani judgement.