Nokia has secured a Dutch sales ban against Oppo’s German subsidiary. The victory is the latest development in a global patent licensing spat with the Chinese handset maker. The injunction may also be evidence of a tactical misfire for Oppo, which initiated the Dutch prong of the dispute, possibly in the hope of avoiding the German “injunction gap”.
Legal wrangles between Nokia and Oppo spread to the Netherlands in October 2021, when Oppo subsidiary Orope DE filed an invalidity suit against several Dutch segments of European patents relating to the 4G and 5G technology standards. Nokia, which had not previously filed suit in the Netherlands, returned fire with an infringement action and request for an injunction.
This followed a series of lawsuits launched in the summer of 2021 as part of a global licensing dispute between the two companies. Although in 2018 Oppo agreed to license Nokia’s 4G-era patent portfolio without the need for litigation, the parties have been unable to agree a fee for a cross-licence to each other’s patent estates for the era of 5G – a technology standard in which Oppo is itself a significant patent owner.
In mid-2021, Nokia launched patent litigation in several jurisdictions, including Germany, the UK, France, Spain, Russia, China, India and Indonesia. It later added suits in Finland and Sweden and withdrew its complaint in Russia. In Germany alone, it asserted more than 15 patents in the Mannheim, Dusseldorf and Munich courts.
Oppo responded with its own actions in China, Germany and the Netherlands. The Dutch proceeding was likely an attempt to weaken Nokia’s chances in its German litigation by gaining a quick invalidity decision for the Dutch portions of the European patents asserted across the border, and thereby to avoid falling into Germany’s infamous “injunction gap”. As IAM explained in a recent in-depth analysis of the Netherlands’ role in European litigation strategies, Dutch validity proceedings are often used with this purpose in mind.
However, the District Court of The Hague has now found that EP 2981103 and EP 3220562 – SEPs which are essential to the 4G and 5G standards respectively – are valid and infringed, and granted an injunction in the Dutch market against Orope DE.
In any case, had the judgment gone the other way it did not come quickly enough to protect Oppo from a German injunction. The German segments of the two European SEPs at-issue were found to be infringed by the Mannheim Regional Court in July this year, resulting in a sales ban for Oppo in Europe’s largest economy.
That injunction followed a previous German sales ban, granted in June on the basis of a WiFi-related implementation patent, and preceded two injunctions issued by the Munich Regional Court in August.
Oppo and its affiliate OnePlus withdrew their products from the German market after the most recent German injunctions, rather than come to an accommodation with Nokia.
Now, additional economic pressure has been applied by the Dutch court’s decision. Though smaller than the German economy, the Netherlands is a fast-growing market for Oppo, which in 2020 recorded 128% year-on-year growth in the country’s smartphone market, establishing itself as the third largest brand. Its partner OnePlus – which does not appear to be caught up in the latest injunction – recorded a stunning 432% year-on-year growth in the Netherlands. Whether an injunction applying only to Oppo’s German subsidiary puts all of those sales at-risk is not clear as of yet.
Nevertheless, the Netherlands – and Europe in general – accounts for a relatively small proportion of Oppo’s overall activity. Oppo phones comprise just 5.6% of European sales, compared to 10% of global sales. The bulk of its sales are in China, where it and OnePlus are the second largest market player with 19% of total sales. The company is also a major force in the Indonesian smart phone market, where it accounts for 26.4% of sales, falling into second place behind Samsung. So, although this heaps further pressure on Oppo, it is likely (as IAM has argued previously) to be future legal decisions outside Europe that will determine the outcome of the dispute.
Nokia therefore may need to secure a legal victory further afield if it is to win a deal on favourable terms.
