- A surge in patent infringement by latecomers in the battery
industry, and subsequent market distortion caused by unlicensed use
of patented technology, calls for strong countermeasures to level
the playing field
- LG Energy Solution believes that at least 500 patents directed
to its first through third-generation battery technologies cover
the current state-of-the-art battery products
- The company intends to lead the establishment of a battery
patent licensing market by creating a global patent pool
SEOUL,
South Korea, April 23,
2024 /PRNewswire/ -- LG Energy Solution (KRX:
373220), a battery pioneer that has led technology innovation and
development in the global battery industry over the past 30 years,
announced it will take strong countermeasures against "patent free
riders."
LG Energy Solution is evaluating all options in this regard,
including issuing warning notices or filing patent infringement
lawsuits against those infringing on its patents. At the same time,
it will also commit to driving fair competition in the industry by
establishing a legitimate battery patent licensing market.
The company sees a rising tide of latecomers' deliberate
and blatant unauthorized use of its patents across a wide
range of commercialized products, including batteries for consumer
electronics, energy storage systems (ESS), and electric
vehicles (EV).
[Example 1] EVs. Battery
manufacturers supplying batteries to automakers that
market EVs in Europe. After
only a preliminary review of competitor EV batteries, LG Energy
Solution has discovered these manufacturers may have violated more
than 30 of its patents covering major components and manufacturing
technologies, including coated separator, cathode material,
structures of battery cells and electrodes. Analysis is
on-going.
[Example 2] Consumer devices. Battery
manufacturers supplying batteries to world-renowned
electronics companies. Laptops and cellphones that are powered
by these batteries are actively sold in Europe and China. Again, after only an initial
investigation, LG Energy Solution has identified more than 50
potential instances of unauthorized use of its patents on
technologies including coated separator, cathode material, and
electrolyte additives.
LG Energy Solution has previously taken significant measures
to protect its intellectual property (IP), including filing
successful trade secret misappropriation and patent infringement
lawsuits against its competitors with the United States
International Trade Commission, German courts, and others.
Nevertheless, the company says its patent rights are
continuously being violated by "patent free riders" who reap the
benefits of LG Energy Solution's and other market leaders' R&D
and proprietary rights by offering infringing products without
license. Major multinational manufacturers of end-products
containing these infringing batteries appear to be overlooking
their suppliers' non-compliance with patent rights. Such widespread
disregard within the industry has led to severe market distortions,
now demanding industry leaders like LG Energy Solution to take
action and adopt stronger countermeasures.
"LG Energy Solution is the 'original innovator' in the global
battery industry, and we have pioneered the global market through
continuous technological development and breakthrough innovations
since the inception of the industry," said Han Sun Lee, Head of the IP Center at
LG Energy Solution. Lee further stated, "To safeguard our
technological leadership and promote collective growth in the
industry, we will commit ourselves to establishing a fair patent
licensing system and take strict measures against unlawful
infringements."
- Infringement of LG Energy Solution's core patents are
on the rise, and next-generation technologies may face similar
threat
As a pioneer of the industry, LG Energy Solution has already
secured patent protection for core technologies across all areas of
the battery industry, including battery materials, manufacturing,
battery pack and battery management systems (BMS). From the
first-generation technologies that are already commercialized for
mass-production to cutting-edge third-generation technologies, the
company has filed more than 58,000 patent applications worldwide,
and secured more than 30,000 issued patents.
The global battery industry has also seen exponential
growth in the past decade: the size of EV battery market has
increased by approximately 25 times from 2015 (28GWh) to 2023
(706GWh), and it is expected to reach 5,256GWh in
2035.[1]
Such rapid market growth has intensified the competition,
leading to a surge in IP infringement. Many latecomers have not
been diligent in obtaining patents, and yet, are trying to enter
major markets such as Europe,
China, India, and Southeast
Asia through patent "free riding".
LG Energy Solution has begun review of its portfolio and has
identified over 1,000 patents in its portfolio as being "highly
strategic" patents[2] of which 580 are likely infringed
by competing battery manufacturers. By all indications, it would be
nonsensical for a latecomer to ignore the risk of patent
infringement and develop batteries without licensing LG Energy
Solution's foundational patent rights. Some examples of this
include:
- LG Energy Solution's patents relating to increased adhesiveness
of the ceramic coated separator, which enables the adaptation of
various sophisticated designs of electrode assembly
structures;
- LG Energy Solution's patented Double Layer Slot Die Coating
(DLD) process for anode (world's first commercialization by LG
Energy Solution in 2018) and pre-dispersion process for carbon
conductive materials in their electrode design;
- LG Energy Solution's patents on electrolytes for high voltage
and high efficiency batteries and Mid-Ni NCM[3] (NCM523, 622) cathode materials;
- LG Energy Solution's patents on important surface treatment
methods for cathode materials and useful compositions of mixed
cathode materials (NMC mixed with LFP[4],
LCO[5], and/or LMO[6]), both of which LG
Energy Solution was the first to commercialize; and
- LG Energy Solution's patents on silicon anode
technologies.
The risk of patent infringement by latecomers extends to
next-generation battery technologies, as the company holds many
core patents in these areas. For example, LG Energy Solution has
secured core patents directed to the dry coating process, an
environment-friendly and price-competitive technology that does not
use organic solvents, and the next-generation cylindrical 46-Series
battery technology. It also holds core patents on BMS, with key
emphasis on safety diagnosis technology developed using decades of
accumulated R&D data, all of which will be essential for the
growth of EV market in the future.
- LG Energy Solution to lead the establishment of a global
patent pool in the battery industry
After decades of market leadership, LG Energy Solution now aims
to lead the establishment of a fair battery patent licensing market
to protect its innovative technologies and uphold fair market
competition. To achieve this objective, the company will consider
utilizing various patent monetization models such as patent pooling
or sales.
The company will first form a global patent pool using its
patents that are currently believed to be infringed by
commercialized products in the market, and then efficiently manage
its licensing activities by licensing out key patent portfolios in
phases. Similar to how patent licensing has taken an active role in
the advancement of major industries including semiconductors and
IT, LG Energy Solution believes that a fair patent licensing
opportunity is essential for the overall advancement of the global
battery industry.
Such fair licensing would lead to a virtuous cycle, as leading
players will be able to utilize their royalty proceeds to increase
their investments in new technologies, while latecomers could
further enhance their product competitiveness by adopting advanced
technologies through licensed use, eliminating their exposure to
patent infringement risk.
However, if LG Energy Solution's patent licensing efforts
are not appreciated by latecomers to the market, it will have to
resort to other countermeasures to aggressively enforce its patent
rights, including filing patent infringement lawsuits in a court.
To this end, LG Energy Solution will enhance its global
litigation capabilities by securing experts in major markets such
as the U.S., Europe, and
China. At the same time, it will
expand and invest in its regional IP offices abroad in charge of
the systematic management and oversight of global IP prosecution
and enforcement activities.
"Respecting intellectual property rights is essential for
fostering fair competition in the global market. To ensure the
advancement of the overall industry and the company, we will
protect our intellectual properties and take bold countermeasures
on patent infringements," said David
Kim, CEO of LG Energy Solution. "As an industry leader, we
will also lead the establishment of a legitimate battery patent
licensing market. By utilizing fair return on our IP, we will
actively pursue the development of core future technologies,
providing differentiated values to our customers."
About LG Energy Solution
LG Energy Solution (KRX: 373220), a split-off from LG Chem, is a
leading global manufacturer of lithium-ion batteries for electric
vehicles, mobility, IT, and energy storage systems. With 30 years
of experience in revolutionary battery technology and extensive
research and development (R&D), the company is the top
battery-related patent holder in the world with over 58,000
patents. Its robust global network, which spans North
America, Europe, and Asia, includes battery manufacturing
facilities established through joint ventures with major
automakers. Committed to building sustainable battery ecosystem, LG
Energy Solution aims to achieve carbon neutrality across its value
chain by 2050, while embodying the value of shared growth and
promoting diverse and inclusive corporate culture. To learn more
about LG Energy Solution's ideas and innovations, visit
https://news.lgensol.com.
[1] Reference: SNE
Research
|
[2] Strategic patents:
Patents on which infringements were found or are expected, based on
the benchmark analysis on competitors' products, market
information, or technological information
|
[3] NCM: nickel cobalt
manganese
|
[4] LFP: lithium iron
phosphate
|
[5] LCO: lithium cobalt
oxide
|
[6] LMO: lithium
manganese oxide
|
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SOURCE LG Energy Solution