OPPO can easily resolve our patent licensing dispute

I would like to share a few thoughts about our on-going legal dispute with OPPO, the Chinese smartphone manufacturer, concerning the use of Nokia’s patented technology in their devices.

Nokia and OPPO had a patent license agreement which ran from 2018 to the end of June last year. Under this license, which was agreed amicably, OPPO paid Nokia for the use of our technology. This included certain Standard Essential Patents - technologies that Nokia has contributed to open cellular connectivity standards and without which, OPPO’s smartphones would not work.

OPPO enjoys huge benefits from Nokia’s innovation

As a late entrant to the smartphone market, OPPO enjoys huge benefits from the open standards that Nokia has helped to develop through our research and innovation. OPPO have been able to enter the market with devices that are compatible with cellular networks around the world without having to make their own substantial investment in the global standards that shape how these devices and networks operate.

To put this into context, Nokia has invested more than €130 billion in R&D since 2000, and over €4 billion last year alone. Anyone who enters the market like OPPO, and who is reliant upon the massive investments made by others, should respect the rules of the system that allow companies to use standardized technologies, provided they agree a license on FRAND terms. But OPPO continues to enjoy these benefits while refusing to pay fair compensation for the innovations created by others.

We are proud of the role we have played in shaping global open standards and it is no exaggeration to say that entire industries are built on our inventions. In return for the use of this technology we seek fair compensation which we reinvest, along with substantial amounts of additional investment, in developing the next generation of cellular and multimedia technology. It’s a virtuous circle, powering innovation.

Litigation is always a last resort

When it came to renewing their license agreement, OPPO rejected our fair and reasonable offers, insisting that they wanted to pay less than their competitors. Once it became clear OPPO were unwilling to agree to reasonable terms directly with us, we offered to enter into independent and neutral arbitration.

Litigation is always our last resort, and we took every possible step to resolve the matter amicably, but by rejecting our offers and the proposed arbitration, OPPO left us with no choice. And so, we initiated legal action in a number of countries in Europe and Asia. The actions center on a mix of cellular Standard Essential Patents and implementation patents covering connectivity, user interface and security technologies.

OPPO’s unwillingness to play by the rules

In the past few months two German courts have ruled that OPPO is using Nokia’s technologies in its smartphones and is selling them illegally without a license. In fact, the courts in Munich and Mannheim have so far found they are infringing five patents in total (including patents which are essential to 4G and 5G standards as well as a Wi-Fi implementation related patent) and that Nokia has acted fairly.  The courts highlighted OPPO’s unwillingness to play by the rules by confirming that OPPO was unwilling to agree a license and that OPPO actually wanted to delay the conclusion of a license agreement.

And there have been further developments since the rulings by the courts in Germany back in the summer. First, the District Court of the Hague in the Netherlands found that OPPO is infringing two of our patents which are essential to 4G and 5G standards. Meanwhile in China, OPPO withdrew its complaint to the Chongqing No.1 Intermediate Court that Nokia breached its FRAND obligations. And, as expected, the Supreme People’s Court in China reaffirmed its view that Chinese courts can set global licensing rates. We look forward to demonstrating OPPO’s unwillingness to play by the rules and how this gives OPPO an unfair, anti-competitive advantage over their competitors, including other Chinese companies.

OPPO can easily resolve this matter

In the wake of the decisions by the courts in Mannheim and Munich, OPPO announced that it will suspend sales in Germany. Just to be clear, we would much rather work with OPPO to bring the benefits of our innovation to their customers in Germany and other markets around the world. OPPO can easily resolve this matter by renewing their license on fair terms, just as their competitors have. And our door is always open for amicable discussions.