Vivo to Appeal Court Ruling in Patent Lawsuit With Nokia

Chinese cellphone maker Vivo said it was disappointed after a German court ruled that it has infringed Nokia’s patents, and said it intends to appeal.

In the patent lawsuit the two companies have been contesting, Vivo claimed that Nokia had not complied with its obligation to offer a license on terms that were fair, reasonable, and non-discriminatory -- also known as FRAND.

Vivo is “prepared to suspend the sales and marketing of relevant products through Vivo Germany’s official channels if required,” but there will be no impact on its business outside Germany, the Dongguan-based handset maker told Yicai Global.

“The court also finds that Nokia’s actions (to defend its intellectual property) are fair and reasonable,” the Finnish communication giant told Yicai Global. Nokia said it hopes the ruling will prompt Vivo to recognize its obligations.

Nokia also sued Vivo on similar grounds in the United Kingdom, the Netherlands, Brazil, India, Indonesia, and China, in addition to Germany. 

The dispute is over the price paid for patent royalties. Nokia negotiated a license renewal with Vivo before their patent license expired in late December 2021, but the “fair and reasonable offer” was rejected, Nokia said.

But Vivo believes that Nokia’s patent license offer was unreasonable and violates the FRAND terms. The price Nokia wanted in the new offer was much higher than before, and would have a big impact if Vivo were to accept it, an industry insider close to Vivo told Yicai Global.

Oppo Mobile Telecommunications signed an agreement with Nokia in the fourth-generation era, but the offer in the 5G era was too high to afford, said Adler Feng, Oppo’s chief intellectual property officer. The higher patent fees would have led to considerable hardware costs, he added, making it too hard to make a profit.

Nokia charges EUR3 (USD3.30) for each mobile phone that uses its patents, according to its fee schedule unveiled in 2018. In comparison, Huawei Technologies charges up to USD2.50 for each handset using its patents.

“The current patent disputes focus not on whether companies will pay or not, but on how should patents be priced,” said a manager at a Chinese cellphone manufacturer.

Realizing the importance of patents, phone producers have made greater efforts in innovation in the past few years. Chinese makers filed more than 60 percent of the nearly 50,000 invention patents submitted by the top 100 communications firms in 2022, Yicai Global learned.

By May 2022, Vivo had applied for more than 4,000 5G invention patents in total. Vivo has entered into cross-license agreements with many leading firm in recent year, it said.