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When a vehicle is launched into the market with plenty of new features, it undoubtedly catches the eyes of the audiences. But it’s not that easy for the company to incorporate all the technologies and methods in one car. They have to take permissions or licenses before using those methods or technologies in their products from the companies having patents over them. Any negligence in this act can cost them billions. Similarly, in a case, Daimler was sued for using mobile communication technology in its vehicle without any license from Sharp Corp, who was having a patent on it. However, the case was decided in favor of Sharp Corporation.
Japan's leading multinational electronic firm, Sharp Corporation has recently signed a licensing agreement with Daimler as it settled a patent infringement lawsuit against the German automaker over in-vehicle mobile communications technology.
Biography of the parties:
Sharp Corporation is a major Japanese multinational corporation that primarily designs and manufactures electronic products, headquartered in Sakai-Ku, Sakai, Osaka Prefecture. Since 2016 it has been majority-owned by the Taiwan-based Foxconn Group. Sharp employs more than 50,000 people worldwide. The company was founded in September 1912 in Tokyo and takes its name from one of its founder's first inventions, the Ever-Sharp mechanical pencil, which was invented by Tokuji Hayakawa in 1915.
On the other hand, Daimler is a German multinational automotive corporation, headquartered in Stuttgart, Baden-Württemberg. It is one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles with a global reach. They provide financing, leasing, fleet management, insurance, and innovative mobility services. Daimler-Benz was formed with the merger of Benz & Cie. and Daimler Motoren Gesellschaft in 1926. The company was renamed Daimler Chrysler upon acquiring the American automobile manufacturer Chrysler Corporation in 1998 and was again renamed Daimler AG upon the divestment of Chrysler to Cerberus Capital Management in 2007 (Chrysler is currently owned by FCA).
Background of Patent infringement case: The Japanese electronics firm filed a lawsuit against Daimler for using mobile communication technology in their vehicles. This technology was Patented in the name of Sharp corporation. Sharp Corp. alleged that Daimler violated their Patent rights as this technology was used without any license. After the whole trial, Sharp Corporation won the patent dispute in a ruling in the month of September by a German court that allowed Sharp to enforce a sales ban against Daimler under certain conditions. A District Court in Munich concluded that:
- Violation of a patent was done by using mobile communications technology in Daimler vehicles. Sharp Corporation was the owner of the patent.
- Daimler used mobile technology without a license.
- Sharp Corp was allowed to enforce a sales ban against Daimler if the company would post 5.5 million Euros ($6.5 million) as a guarantee to cover any damages in the event the ban is overturned on appeal.
Daimler responded by filing a nullity action against the patent in a separate lawsuit. This lawsuit was filed before Germany's federal patent court in Munich. This suit was part of a fight between Daimler and several technology firms that were all suing the automaker and want to force it to take a license from a pool of patent owners. Nokia also won a similar patent infringement lawsuit against Daimler in German Court.