Mercedes Pens Major Technology Deal With Nokia

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The carmaker can now sell cars in Germany without getting sued.

Mercedes ran into a potentially very serious problem last summer. If it was left unresolved the automaker could have been legally prevented from selling cars in its native Germany. It was a completely unacceptable scenario due to a patent licensing dispute. The disagreement wasn't with a rival carmaker but rather Finnish mobile phone company Nokia.

A German court even sided with Nokia over how it could license mobile telecommunications technology, an essential component of new vehicles like the Mercedes-Benz EQS flagship. Mercedes' parent company Daimler initially refused to cut a deal but the court's decision left it with no choice. Nokia wanted its money and had the law on its side.

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Today, the two sides have announced they've signed a patent licensing agreement. The terms state Nokia will license mobile tech to Daimler who in turn will pay an undisclosed payment in return. All other pending issues between the two have also been resolved, including the complaint Daimler made against Nokia to the European Commission. It was more in Daimler's interest to resolve the matter than it was for Nokia.

Not only does the EQS require this tech, but so does every Mercedes model, beginning with the entry-level A-Class. Daimler's suppliers were reportedly so concerned about the matter that they were privately pushing the automaker to reach an agreement.

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The legal dispute was closely monitored by rival car companies as well, because they also rely on Nokia for the same purpose. A legal precedent has just been set. Initially, Nokia wanted to charge fees per car instead of granting Daimler and other automakers a license to use its technology.

That would have resulted in automakers paying exceptionally high amounts but Nokia likely knew beforehand they would never agree to that. Therefore, a licensing fee was the only realistic way to go, but Nokia certainly took a strong-arm approach. Legally, it had the power to block Daimler from selling cars in Germany, though it would have required Nokia to post about $8.3 billion in collateral.

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