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Nokia does not accept the decision of the Chinese court in the important Oppo patent dispute

15. 12. 2023 Friday / By: Robert Denes / Business / Exact time: BST / Print this page

N okia does not accept the decision of the Chinese court regarding the patent dispute with the Chinese smartphone manufacturer Oppo, therefore it plans to appeal, and no agreement has yet been reached. Already in 2021, Nokia launched a patent lawsuit against Oppo, including OnePlus and Realme, and in 2022 against Vivo, because they did not agree to renew their patent license agreements according to the terms desired by Nokia, so no agreements were reached.

On Monday, information became public that the Chinese Chongqing court made a decision on the FRAND-based level of compensation that Oppo should pay to Nokia. Now we have received new information about the decision of the Chinese court, and at the same time Nokia has announced that it does not accept the decision and will appeal against it.

Oppo previously said that it was ready to comply with the Chinese court's decision, which is not surprising, since it seems that the content of the decision was quite favorable to it. In the mobile industry, the licensing of patents required for standards such as 4G and 5G must be done under fair, reasonable and equitable FRAND terms. The companies involved in the development of the standards undertake FRAND licensing in exchange for the inclusion of the solution they have developed in the standard. However, even with FRAND terms, what is ultimately fair and reasonable must be determined.

In the patent dispute between Nokia and Oppo, among other things, the question of which country's court decision determines the terms of the global FRAND license has also been twisted. A Chinese definition would have worked for Oppo, but not for Nokia.

According to IAM, which follows the patent industry, the Chinese court decision set the following compensation levels for patent licensing in different regions and devices:

  • 4G devices in China and other price-sensitive regions: $0.477/device
  • 4G devices in higher average price areas: $0.777/device
  • 5G devices in China and other price-sensitive regions: $0.707/device
  • 5G devices in higher average price areas: $1,151/device
  • The level of compensation presented by the Chinese court is significantly lower compared to what Nokia demanded. Nokia has revealed that it will license its patents for 5G devices at a price of €3 per device. In addition to the generally lower level, the Chinese court in its decision determined an even lower compensation level specifically for those areas where, for example, Oppo's market position is relatively strong. This includes China and several emerging markets.

    In addition, the court's decision did not take into account the quality of the patents, which also favors Oppo, which has a shorter history in the field and a growing patent portfolio that has not yet been thoroughly examined in court.

    In the mobile industry, patent disputes are mostly about the level of compensation to be paid, and Nokia has so far not reached an agreement with Oppo - and neither with Vivo. When no patent licensing agreement was reached, Nokia sued the companies in various parts of the world. Among the court decisions following these lawsuits, above all, they are asking for confirmation of their own negotiating position. His most significant wins against Oppo. In addition to patent infringement lawsuits, part of the patent dispute is the struggle over how and who determines the compensation level for patent licensing, if it is left to the courts.

    Nokia previously noted that the Chinese court's decision shows that Oppo is "obliged to pay Nokia" and must pay for the entire contract-free period. "We hope that Oppo will now come to the negotiating table and accept its obligation to fairly compensate Nokia for the use of its innovations," Nokia commented earlier this week.

    "Courts outside of China have confirmed that Oppo is in breach of its open standards obligations as a user of Nokia's technology... We remain confident in our position in the wider dispute and hope to resolve the matter soon," Nokia is now commenting after saying, to appeal against the decision of the Chinese court.

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