Patent attorney Ben Lincoln of Potter Clarkson reports on the dispute between ATL and CosMX which puts a spotlight on the power of patents and the typical counterclaims that are put up against a patent holder when they attempt to enforce their rights.
April saw the issue of a decision from the United States District Court for the Eastern District of Texas relating to an intellectual property and competition dispute between Ningde Amperex Technology Limited (ATL) and Zhuhai CosMX Battery Co., Ltd (CosMX).
ATL is a leading producer and innovator of lithium-ion batteries known for developing, producing and packaging rechargeable lithium-ion battery cells and packs. ATL works closely with world-renowned branded smartphones, tablets and notebooks OEMs. CosMX is headquartered in Zhuhai, China.
CosMX is also a major global supplier of consumer lithium-ion batteries and is known for developing, producing, and packaging lithium-ion battery cells and packs used in various consumer electronics devices, including laptop PCs, notebooks, tablets, smartphones, smart wearables, power tools and drones.
The dispute between the two involves the sale of lithium battery technology for use in laptops and whether it infringes US patent numbers US 10,964,987 (the ’987 patent), US 10,833,363 (the ’363 patent) and US 11,329,352 (the ’352 patent) – see The Patents below. A European patent EP 3 627 606 B in the same family as the ‘363 patent was also litigated in Germany.
In the litigation in the US, ATL also alleged that the infringement by CosMX was wilful and should therefore carry a harsher penalty. In response to these accusations, CosMX claimed that the patents were invalid and therefore not enforceable against them. They also made claims that ATL had engaged in anticompetitive conduct, including threatening baseless patent litigation in China.
The Patents
US patent no. 10,964,987 relates to a separator and an energy storage device. The patent describes a separator that comprises a porous substrate and a porous layer arranged on the surface of the porous substrate. The porous layer includes inorganic particles and a binder.
The ratio of Dv90 of the inorganic particles to the thickness of the porous layer is in a range from 0.3 to 3.0. As will be understood, Dv90 relates to the particle size distribution. The patent explains that the porous layer is arranged on a surface of the separator, and the inorganic particles contained in the pores in the porous layer can serve to support the pores, and therefore the pores can be well protected from being destroyed.
The advantageous separator is capable of reducing the gap between the separator and the electrode of the energy storage device, hence improving the service life of the lithium-ion battery. In the prior art, as lithium-ion batteries are charged and discharged, a gap forms between a battery’s electrode and the separator. To solve this problem, the ’987 patent provides a separator that maintains an excellent adhesion between the separator and the electrode, thus preventing the formation of the gap as well as the reduction in battery capacity.
US patent no. 10,833,363 relates to an electrolyte, comprising a dinitrile compound, a trinitrile compound, and propyl propionate, wherein, based on a total weight of the electrolyte, a weight percentage of the dinitrile compound is X and a weight percentage of the trinitrile compound is Y, where X and Y meet the conditions:
(1) about 2 wt % ≤ (X+Y) ≤ about 11 wt %; and
(2) about 0.1 ≤(X/Y) ≤ about 8,
and wherein, based on the total weight of the electrolyte, a weight percentage of the propyl propionate is Z, where Y and Z meet the condition:
(3) about 0.01 ≤ (Y/Z) ≤ about 0.3.
The patent explains that use of such an electrolyte in an electrochemical device electrode leads to good electrical conductivity and the effects of the cathode and anode active materials are well exerted, which is important for controlling the expansion of electrochemical devices. Therefore, the electrochemical device according to the embodiments of the present application achieves high capacity density and has excellent cycle and storage performances.
US patent no. 11,329,352 relates to a secondary battery cell and its winding formation system. The patent describes a secondary battery that comprises a first electrode tab and a first electrode plate. The first electrode plate comprises a first current collector, a first active layer, a first electrode tab receiving groove and a first electrode plate notch.
The first active layer is disposed on a surface of the first current collector. The first electrode tab receiving groove is configured to receive the first electrode tab, and the first electrode tab is electrically connected with the first current collector through the first electrode tab receiving groove. The first electrode plate notch is disposed on an edge of the first electrode tab receiving groove.
This structure and associated manufacturing process is said to increase energy density and remove burrs on the current collector reducing the chance of short circuit.
‘Infringing acts’
In the initial submissions, ATL identified infringing acts performed by CosMX as directly shipping sample lithium-ion battery cells to certain OEM customers, such as Dell and HP; sending battery cells to Texas Instruments in Dallas, Texas, for chemical and safety analysis and/or compatibility testing; providing lithium-ion battery products to BTI Solutions, Inc.; and entering into agreements with Lenovo Inc., to include CosMX lithium-ion batteries within Lenovo’s products.
In the submissions of ATL, to support its arguments that infringement was wilful, it was explained that on 24 June 2021, ATL sent CosMX written correspondence informing CosMX that its making, using, or selling of products infringed the ’987 patent and that CosMX continued to induce customers, distributors, and/or importers to use, import, purchase or sell the potentially infringing products.
With reference to the ‘987 patent, ATL analysed CosMX’s CA3862E1 battery cell and presented images that allegedly showed a porous layer comprising inorganic particles (seen as white specks) and a binder. Their analysis revealed that Dv90 was approximately 2.3 micrometres and that the thickness of porous layer was measured to be approximately four micrometres. Thus, they concluded that the ratio of Dv90 to porous layer = (2.3)/(4) = approximately 0.6 and therefore the ratio falls within the claimed range of 0.3 to 3.0.
‘Invalid’
In order to prove that the patents were invalid, CosMX submitted prior art documents to show the claimed subject matter was not new and/or inventive. The validity of a patent is dependent on its claims defining new and inventive subject matter. The US Patent Office will have examined the patents when they were in the application process to verify novelty and inventiveness. However, the validity of patents can be challenged even if they are granted, because the search of the prior art performed by the patent office can never be completely exhaustive.
Against the ’987 patent, the submissions included US patent US 7 976 987 and publication US 2014/248525 relating to a ‘Separator for Non-Aqueous Secondary Battery and Non-Aqueous Secondary Battery’ assigned to Teijin Limited. Against the ‘352 patent, several Chinese patents were cited in the names of Hunan Keba Automobile Power Battery Limited and Shandong Qixing New Energy Technology Limited.
The trial by jury commenced on 1 February 2024. In conclusion, it was found that CosMX had infringed claims one and 17 of the ’987 patent, claim one of the ’363 patent, and claim one of the ’352 patent, and CosMX had done so wilfully. Also, it was decided that CosMX did not prove ATL had engaged in anticompetitive conduct.
However, it did not all go ATL’s way, as the jury found that claim one of the ’363 patent was invalid and that claim one of the ’352 patent was invalid.
Wilful infringement
Nevertheless, it was decided that ATL should recover from CosMX $3.7 million for the infringement. Considering the jury’s finding of wilfulness, the court enhanced the damages award by $1 million.
In Europe, ATL believed that CosMX subsidiaries were infringing its European patent EP 3 627 606 B1 by providing its lithium-ion laptop batteries. ATL also challenged German, Italian and Dutch subsidiaries of the computer manufacturer Acer, which is said to install CosMX batteries in its laptops. It has been reported that Acer may no longer sell laptops containing lithium-ion batteries from CosMX.
The dispute between ATL and CosMX is significant in the world of battery technology and put a spotlight on the power of patents and the typical counterclaims that are put up against a patent holder when they attempt to enforce their rights. This legal dispute underscores the importance of intellectual property rights in fostering innovation and competition in the battery technology sector and standing firm when those patent rights are infringed.
