After the judgment of the Munich regional court, the US manufacturer is threatened with a sales ban in Germany. Ford averts this with a license for LTE patents.
To avert an impending sales ban , the car manufacturer Ford has entered into a patent license agreement for mobile phone technologies with the patent pool Avanci. This was announced by Avanci on Tuesday in Dallas (US state of Texas). This gives Ford a license for standard-relevant mobile phone patents from currently 49 patent holders.
One of these patent holders had sued Ford in Germany, another in the USA. Ford is accused of using the mobile radio modules in vehicles and in particular the “FordPass Connect” function. infringing a patent that describes a method for control channel signaling in cellular networks (EP 2294737B1). The patent originally registered by Panasonic was declared essential for the LTE standard.
Sales ban in Germany
Eleven days ago, the Munich I District Court ruled that Ford was infringing this patent. As a standard essential patent, it is licensed under the FRAND terms, which mandate fair, reasonable, and non-discriminatory license terms. For Ford’s failure to obtain such a license, the automaker was ordered to pay damages and cease and desist</ a>. There was a threat of a ban on the sale of numerous Ford models in Germany.
The fact that, according to the court, the car manufacturer did not really try to get a license also played a role in the decision. The chamber could not determine that Ford was “sufficiently willing to license”; was, it said in the verbal reasoning. The judges underpinned this, among other things, by the fact that Ford had rejected an offer for a license from Avanci and had not made a counter-offer.
“Welcome to Avanci”
Well, then: “Avanci means Welcome to Ford, one of the world’s leading automobile manufacturers”, CEO Kasim Alfalahi was quoted as saying in a short message. Avanci is a patent pool in which numerous owners of standard-relevant patents for 2G, 3G, 4G and also 5G contribute their property rights. The licensors include heavyweights such as Nokia, Siemens and Panasonic.
Avanci then markets the property rights in bundles to the vehicle manufacturers – for USD 15 per vehicle. “Ford is the fifth US automaker to join the growing list of companies,” Alfalahi said. The licensees now also include the three major German car manufacturers. After BMW and Volkswagen, Daimler also concluded an agreement with Avanci in December 2021 – after years of patent battle with Nokia.
While a license fee of 15 US dollars does not seem like much in view of a new vehicle price of 20,000 euros and more, there is a fundamental dispute behind the hard disputes over patent rights: Is the license fee based on the price of the end device (here: car), or the component that provides the disputed function, and which manufacturer is responsible for licensing?
It is due to a special way of German patent law that patent owners in Germany can choose who they want to take to court – with high risk for manufacturers. “This type of injunction is only possible in Germany,” emphasizes patent expert Roman Bonn, who heads the intellectual property department at supplier Continental. These proceedings showed “that we urgently need a European legal framework for standard-essential patents”.
In a patent dispute with Nokia, Daimler recently had the opportunity to have this fundamental question clarified by the European Court of Justice. The Düsseldorf regional court called in the ECJ in one of the proceedings.However, the highest European court no longer dealt with the case: In December 2021, Daimler acquired the disputed 4G licenses from Avanci.