The patent dispute court between OPPO and Nokia has ruled, marking the first time a Chinese court has made a global rate ruling on standard essential patent litigation.
Recently, the First Intermediate People's Court of Chongqing made a judgment in the OPPO v. Nokia Standard Essential Patent Usage Fee Dispute case, confirming the global fair, reasonable, and non discriminatory (FRAND) rate for Nokia 2G-5G standard essential patents: for 5G multimode phones, the single license fee in the world's first region is 1.151 US dollars per unit, The license fee for a single set in Zone 2 (Chinese Mainland) and Zone 3 (other countries and regions except Zone 1 and Zone 2) is 0.707/set. For 4G multimode phones, the single license fee in the first zone is $0.777 per unit, and the single license fee in the second and third zones is $0.477 per unit.
This judgment is the first time a Chinese court has made a global rate ruling on standard essential patent litigation. In 2021, the Supreme People's Court finally ruled for the first time in the OPPO Sharpe Standard Essential Patent License Dispute case that Chinese courts have global tariff jurisdiction over standard patents. The judgment of the Chongqing court for the first time determined the cumulative 5G standard rate for the mobile phone industry to be 4.341% -5.273%. According to the ruling, without considering the proportion of multiple models, the upper limit of the 5G patent fee for a pure 5G phone priced at $200 is $10.55.
The dispute between OPPO and Nokia has a long history. Although Nokia is no longer a terminal giant in the global mobile phone industry, it still holds a large number of patents related to mobile communication. Any subsequent mobile phone brand that uses these patented technologies in their products will need to pay patent fees to Nokia. In fact, according to the current international intellectual property laws, it is understandable for companies to charge patent fees for their patented technologies, but there is a core issue that is the fee standards.
Currently, there is no universally accepted standard for the fee amount for various patented technologies in the communication IT industry internationally, and the patent fee standards and amounts vary in each country and region. However, due to the complexity of patent technology in the communication IT industry and the wide range of technical fields involved, there is no unified standard for patent fees. Generally speaking, determining patent fees requires considering multiple factors, including the technical content of the patent, market value, product sales, geographical distribution of the patent, and value contribution. In some countries and regions, patent organizations or courts may evaluate and determine patent fees, which has become a common practice.
Strategy Analytics, a research firm, pointed out in a report that 5G smartphones will bring nearly $20 billion in global patent usage revenue to patent holders annually starting from 2025, with Ericsson, Nokia, and Qualcomm accounting for the vast majority of these patent usage revenue. For many mobile phone manufacturers, the constantly rising patent fees have become a huge burden. Some leading companies in the industry, such as Apple, have also engaged in long-standing global lawsuits with Qualcomm, and the core issue remains patent fees.
OPPO reached a patent cross licensing agreement with Nokia in 2018, involving 4G patents. Both parties will license each other's patents and engage in good faith negotiations with Nokia regarding 5G patent licensing before the expiration of the 4G contract. According to third-party data, Nokia holds 6.82% of the required 5G standard patents globally, ranking 6th in the world; OPPO holds 4.19% of the shares, ranking 9th globally. Nokia demands a public fee of up to 3 euros per device, but is unwilling to pay reasonable fees for OPPO patents. Nokia has filed dozens of lawsuits against OPPO in multiple countries around the world before and after the expiration of the agreement between the two parties. Due to Nokia's ongoing attempts to use litigation as a bargaining chip to collect high patent fees, both parties were unable to reach an agreement on patent licensing. OPPO subsequently launched countermeasures in multiple countries around the world. As of now, dozens of Nokia patents have been declared invalid or ruled non infringing by local courts in corresponding legal proceedings in countries such as Germany, France, Sweden, and China. Among them, Nokia's lawsuit initiated in Indonesia has been completely dismissed by the local court.
The judgment made by the Chongqing First Intermediate People's Court in the OPPO v. Nokia Standard Essential Patent Usage Fee Dispute confirms the global fair, reasonable, and non discriminatory (FRAND) rates for Nokia's standard essential patent portfolio. This is the first global rate ruling made by a Chinese court, as well as the first 5G standard essential patent rate ruling in China. It has important reference value for the pricing of patent licensing fees in the communication and related industries.
The OPPO official website has issued an official statement regarding this case: OPPO is willing to comply with and enforce the global FRAND licensing fee for Nokia patents determined by court rulings, and hopes to actively resolve the patent licensing fee dispute with Nokia. OPPO hopes that Nokia can comply with and enforce the global fee ruling of Chongqing Court. OPPO respects intellectual property rights and advocates reasonable fees, advocates the establishment of a long-term healthy intellectual property ecosystem, and advocates for friendly negotiations to resolve the issue between licensors and licensees "Intellectual property disputes, mutual respect for patent value."