A court in Mannheim, Germany ruled that Daimler AG, which owns the Mercedes-Benz brand, violated Nokia's mobile technology patents, reported by Bloomberg.
The German court ruling will allow Nokia to seek a ban on the sale of Mercedes vehicles in Germany after the Finnish company pays a bail of seven billion euros in a separate production.
A Daimler spokesman said the company will appeal the court decision. He called the prospect of a ban on sales unlikely.
Nokia Technologies President Jenny Lukander called the court's decision a recognition that innovators should receive fair rewards for their engineering designs.
“We hope that now Daimler will accept its obligations and receive a license on fair terms,” she said.
Nokia has also filed lawsuits against Daimler in the courts of Munich and Dusseldorf. Daimler, for its part, has filed a claim to annul Nokia patents in a separate court.
European automakers depend on technology to enable cars to connect to the internet. Nokia is committed to charging Daimler per vehicle. Daimler thinks the fees would be too high in this case, and is insisting that Nokia license the technology to equipment suppliers who will then charge the German automaker.
Suppliers, including Continental and Robert Bosch, agree with this approach and support Daimler in litigation.
Nokia, for its part, notes that its proposed licensed model has been adopted by other German automakers, including BMW and Volkswagen.
This case is not just being watched closely by the automotive industry as it could have implications for the Internet of Things as mobile communications are becoming more important in almost all products and industries.