Ben Lincoln of Potter Clarkson examines intellectual property enforcement and reports how strategies can vary significantly.

A portfolio of intellectual property (IP) rights can be used to protect the spoils of research and development, secure market share and generate revenues from licensing the technology to others.

One company may have a focus on exclusivity. Accordingly, its patent enforcement strategy will be focussed on shutting down competing products by obtaining injunctions and seeking damages for infringement. Another company may not be interested in market share and will instead accumulate IP rights simply to collect licensing revenue from others and to enforce rights aggressively to win settlements.

Enforcement strategies can also change over time as different threats emerge or may be defined by current market conditions.

For example, in 2014 Tesla summarised its patent enforcement strategy with a ‘Patent Pledge’ explaining “that it will not initiate patent lawsuits against anyone who, in good faith, wants to use its technology. Tesla was created to accelerate the advent of sustainable transport, and this policy is intended to encourage the advancement of a common, rapidly-evolving platform for electric vehicles, thereby benefiting Tesla, other companies making electric vehicles and the world.”

However, the patent pledge was not an open invitation to infringe Tesla’s IP and only those Tesla deemed to be acting in good faith would be free of enforcement. It has been well publicised that Tesla does enforce its rights when it believes it has been wronged with several lawsuits filed between Tesla subsidiary Maxwell Technologies Inc. and CAP-XX, the Australian supercapacitor company. In June 2024 Tesla filed a $1 billion lawsuit against Matthews International for ‘stealing trade secrets in relation to its dry-battery electrode technology.

Evolving enforcement

The battery market has changed dramatically in recent times and therefore we should expect to see evolving patent enforcement strategies.

LG Energy Solution issued a strong statement on 24 April, stating it would take a firm stance against patent infringers. The statement explains that LG has identified a surge in patent infringement by latecomers in the battery industry and that this is justification for strong countermeasures to level the playing field.

In terms of technology, proprietary component and manufacturing technologies including rights covering coated separators, cathode material, the structure of battery cells and electrodes have been identified by LG as being infringed by suppliers to EVs marketed in Europe.

LG’s statement suggests their enforcement strategy will be to establish a fair battery patent licensing market by the formation of a global patent pool. The so-called latecomers to the industry can then easily obtain a licence and eliminate their patent infringement risk. This all sounds very reasonable, but the royalty level of the patent licence and what will happen if a party wishes to negotiate the terms is less well explained.

So, what about the other players? Samsung SDI announced in May 2024 that it had held an intellectual property (IP) fair to promote executives’ and employees’ understanding of intellectual properties and encourage patent application efforts.

To rally the employees, Samsung SDI president and CEO Yoon-ho Choi reportedly stated “Competitiveness in intellectual properties is a key element for Samsung SDI’s growth to become a global top-tier company.” Securing competitive IPs is essential to the company’s Super Gap technological competitiveness, he added.

Innovation and patent rights

Thus, Samsung SDI clearly wants to keep up the innovation and obtain patent rights. Clues as to how Samsung intends to enforce its rights are less easy to come by.

The fact that there are not many publicised patent battles involving Samsung SDI may be telling of its approach to patent enforcement. It is possible that it very selectively enforces its rights or focuses on private negotiation with any infringers. In March 2022, Ascend Performance Materials Operations announced it and Samsung SDI had reached an agreement to end their ongoing global patent invalidation proceedings and enter into a patent licence agreement. Terms remain confidential.

CATL has been involved in patent disputes on both sides. In 2023, it was defending against demands made by MU Ionic regarding infringement of its European patent. However, in July 2024, it was reported that CATL was on the attack against China Aviation Lithium Battery (CALB) for infringement of its Chinese Utility model on the back of an earlier win against the same manufacturer in December 2022.

Nevertheless, CATL’s enforcement strategy outside China is, at least publicly, much quieter. Looking at its patent filing statistics, it is said to have 9,987 granted patents in 2023 but only 1,850 of those are granted outside China.

In CATL’s 2023 Environmental, Social and Governance (ESG) report, it states it upholds the principle of respecting others’ IP rights and safeguarding its own. It also stated it actively carries out IPR protection work to ensure fair competition. The company’s market and technology investigation department is set up to track products in the market, issuing timely warnings for any malicious patent infringements. The internal structure is in place for CATL to identify infringers and take action.

BYD embroiled

BYD has also been embroiled in patent disputes with Sanyo Electric, Apple and Sony, although in these actions it has been defending. In terms of public announcements, BYD is happy to mention it has patents for its technology, but less so on how it will enforce its rights. Like CATL, much of the patent portfolio has a domestic focus.

All of the companies mentioned proudly cite their pedigree and strategy for obtaining patent rights, but only LG Energy Solution has been vocal about patent enforcement. There are many strategies for making patent rights work for you and the deciding factors will be different for each company.

For some, using the threat of judicial enforcement and patent licensing may enable enforcement with a lower overall burden. Others may prefer to use more private, alternative dispute resolution or take a defensive approach in which their patent rights can be used as bargaining chips in business negotiations. Whichever approach is chosen, having the IP in the first place is essential if you want to be in a strong position when enforcement occurs.