Car Wars: How Nokia Could Find Itself At Center Of EU Investigation Over Technology Patents

Refusals to license intellectual property rights are not a new phenomenon; when they have occurred in the past, EU competition authorities have been strict in imposing big fines on companies that unreasonably refuse to share their technologies.

Nokia owns several patents protecting technologies on which current mobile phone standards are based, such as wifi, 3G, 4G, and the latest 5G. This means that companies requiring these technologies for their products must obtain a licence from the Finnish company. Nokia’s patent enforcement strategy appears to be quite aggressive; it has begun several legal actions, particularly against Daimler, claiming patent infringement on the basis that the defendants were using its patented technology without a licence.

Nokia’s refusal to license such patents has been disputed by a variety of industry players. Complaints have been lodged with the European Commission by Daimler, electronics company Bury Technologies, automobile parts manufacturer Continental as well as automotive supplier Valeo (VLEEY) and digital security company Gemalto (THLLY). All claim that Nokia has refused to license their patents on the principle of “fair economic conditions”, which means they believe the licensing fees demanded by Nokia are too high and unfair, amounting to an illegal abuse of its dominant position and violating EU competition rules.

Some commentators have argued that an investigation into Nokia’s licensing scheme could have a negative impact on Europe’s strategic autonomy when it comes to 5G, as Nokia and its competitor Ericsson (ERIC) are Europe’s major 5G players. However, the EC may soon begin a formal competition procedure aimed at shedding light on Nokia’s practices.

Competition and consumers

As highlighted in the letter sent by the 27 companies to the EC, the practice of some patent owners to grant licences only to certain entities prevents companies across the Internet of Things from investing in research and development.

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This article is republished from The Conversation under a Creative Commons license.

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