Daimler Risks Sales Ban After Sharp Wins Mobile Patent Clash

(Bloomberg) -- Daimler AG risks a sales ban of its cars in Germany after losing its second patent case over mobile technology in three weeks, this time against Japan’s Sharp Corp.

A court in Munich confirmed it granted an injunction to the electronics company. It’s similar to one granted to former mobile phone giant Nokia Oyj.

Thursday’s ruling allows Sharp to ban sales of Daimler vehicles as the court found the automaker used the mobile technology without a license. The suit is part of a broader fight between Daimler and several technology firms that are suing to force the German manufacturer take a license from a pool of patent owners. Daimler instead insists that licenses must be granted to its suppliers.

Daimler said it will appeal and doesn’t expect that production or sales will be stopped. Sharp retracted part of its suit after granting a license to a supplier, showing that the model Daimler favors is workable, the company said.

Nokia, which joined forces with Sharp in the dispute, won an injunction in Mannheim on Aug. 18, but hasn’t enforced it yet. The tribunal in that case ruled Nokia can only go ahead with the ban if it posts collateral of 7 billion euros ($8.3 billion).

The Munich judges on Thursday were less strict and imposed collateral of only 5.5 million euros, making it much easier to enforce the judgment.

Under German law, if a ruling is on appeal, it can only be enforced if the winner posts collateral. That money is a security deposit the other party can use to cover its losses in case it ultimately wins an appeal.

The case is: LG Muenchen, 7 O 8818/19.

©2020 Bloomberg L.P.