The next ZTE event? The lack of battery material core patents

The ZTE event has taught the nation how painful the lack of core technology behind a booming economy. When the Americans waved the stick of trade sanctions, we were able to give counter-measures to each other and win the applause of the people of the country. However, the Americans immediately sacrificed the ZTE incident and immediately caught us by surprise. In order to save ZTE, we had to make a huge compromise with the United States.

The lesson of the ZTE incident is profound. It has made the people aware of the importance of the core technology. No matter how much it costs, they must control the core technology in their own hands, or they will always be subject to control.

Speaking of lithium ion batteries, East Asia's top three China, Japan, and South Korea firmly occupy the first echelon of lithium ion batteries, and domestic CATL, BYD and other giants have rapidly emerged. In particular, CATL has ranked first in the world in power battery shipments in 2017. Everyone thinks China's lithium-ion battery industry is about to dominate the world, and no one thinks we need to look at Americans in the lithium-ion battery industry. But we have all overlooked an important problem -- the lack of core patents.

The author once saw in a WeChat group that someone was asking who had "patent powder". The author was very curious about what "patent powder" was. It was only after the online inquiry that we learned that such a painful fact-our great country has no core patent for lithium iron phosphate material! Any export of lithium iron phosphate related products must pay a high patent fee to be authorized.

Let's start with the patent issue of lithium iron phosphate.

In 2003, the patent rights holders such as Quebec Hydroelectric Corporation of Canada entered China on the basis of an international patent for lithium iron phosphate with the application number PCT/CCA 2001/001349, and filed an invention patent application with the State Intellectual Property Office of China, and was authorized in September 2008(ZL01816319.X).

Since then, the LiFePO4 material has quickly occupied the power battery market with its low cost and high safety advantages. The market demand has increased year by year, and after the lamb to be slaughtered has been fattened, the rights companies of Quebec Hydro, Paris CNRS, and Montreal United require all manufacturers of lithium iron phosphate materials in China to pay a patent entry fee of US$ 10 million or pay a patent fee of US$ 2,500 per ton. This has exceeded the profits that material manufacturers can obtain per ton of lithium iron phosphate, and it is undoubtedly a disaster for the domestic lithium iron phosphate industry.

Forced by desperation, the China Battery Industry Association filed an application for the invalidation of the patent of lithium iron phosphate held by the rights holders of Quebec Hydropower of Canada. On May 28, 2011, the Patent Re-examination Commission made a final ruling-Canada. The patent of lithium iron phosphate held by Quebec Hydroelectricity Co., Ltd. is invalid!

However, at the same time as everyone was relieved, Canada's Quebec Hydroelectric Company immediately filed a lawsuit with the Beijing Intermediate Court to sue the Chinese Patent Review Commission for invalidating the patent for lithium iron phosphate held by it and listed the China Battery Industry Association as a co-defendant.

In this lawsuit concerning the death and death of the lithium iron phosphate industry in China, the China Patent Review Commission and the China Battery Industry Association argued that they had put forward solid and powerful evidence. The court finally found that the scope of patent protection requested by the rights holders of the Quebec Hydroelectric Company in Canada was too large. In addition, several amendments to the patent expression attempt to expand the scope of protection, clearly beyond the scope of the legal provisions, so that the patent is considered invalid.

Rights holders such as Canada's Quebec water and electricity company, still reluctant, appealed to the Beijing high court, which in 2014 finally handed down a ruling upholding the original verdict, leaving Chinese producers of lithium iron phosphate materials to escape punishment.

This patent event for lithium iron phosphate can be said to have been given to lithium iron phosphate manufacturers. If the patent authorization fee is imposed according to the requirements proposed by Quebec Hydro, Canada, half of the material manufacturers will be unable to pay the patent authorization fee. Bankruptcy, Serious drag on the development of China's new energy industry.

Although the vast majority of Chinese lithium iron phosphate manufacturers have avoided paying high royalties to the three patent holders in China, they still need to pay royalties when exporting lithium iron phosphate products to the United States and other countries. This also divides lithium iron phosphate materials into two categories., One is patented and the other is not. lithium iron phosphate batteries exported to the international market must use patented lithium iron phosphate materials. Otherwise, they will face patent lawsuits.

After we thought the lithium iron phosphate incident was over, the domestic power cell market changed direction. Under the guidance of the National subsidy policy, the passenger car power battery quickly turned to the more energy-dense ternary material.

On the ternary materials, we still face the problem of the lack of core patents. At present, the core patents of ternary materials are in the hands of 3M in the United States and Argonne National Laboratory in the United States. It is generally believed that the patents held by 3M are routine. Stoichiometric NMC materials, while Argonne National Laboratory patents are layered lithium-rich materials, currently used in power batteries are basically conventional stoichiometric NMC materials, including Samsung, LG, Panasonic and Hitachi. Mainstream battery manufacturers, such as Belgium's Umicore, South Korea's L&F, SK and Hunan Ruixiang, have purchased relevant patent licenses from 3M.

The seemingly calm ternary material patent field is actually undercurrent. In 2015, the new lithium battery material, BASF, unilaterally filed a patent lawsuit against the Belgian lithium material giant Umicore to the International Trade Commission (ITC) in the United States, accusing the production of Umicore. The NMC material infringed the relevant patents of the Argonne National Laboratory (ANL) and won a lawsuit in December 2016. The ITC ruling prohibits the manufacture, production or importation of products manufactured or produced by Umicore. The infringing lithium metal oxide cathode material is sold in the United States without permission.

The patents used by Umicore are actually ternary material patents authorized by 3M Company of the United States. That is to say, BASF and ANL may file patent litigation against any ternary material manufacturer using 3M authorized patents.

Actually, with the growing popularity of China's ternary power battery market and the surge in demand for ternary materials NMC, the patented black hand of multinational companies has begun to reach the domestic ternary material manufacturers. Since last year, there have been many materials. The manufacturer received a letter from the lawyer accusing the ternary material produced by the Argonne National Laboratory (ANL), although we have indicated from the structure of the material that the currently used stoichiometric ratio NMC is not part of the ANL application. The category of layered lithium-rich materials has not produced a huge crisis similar to the lithium iron phosphate patent.

But this event still makes us realize the importance of core patents. With the rapid rise of China's ternary power battery market, 3M, the owner of the core patent of ternary materials, may increase patent licensing fees and royalties at any time. The U.S. government may also at any time prohibit 3M from licensing Chinese material manufacturers because of national security and interests, thus interrupting the development of the new energy industry in China and impeding the internationalization of battery and material manufacturers.

What is distressing is that the development of the lithium battery industry in China still lacks core patents today. This will become a huge gap in the face of competition from international giants. Last year, LG Chemical sued ATL for infringing its patent on a ceramic diaphragm. The demand to ban the sale of ATL lithium-ion batteries and ATL lithium-ion battery products in the United States is an attempt to hinder the internationalization of ATL, a rapidly emerging lithium power rookie, and protect its precarious market position.

Core technology has become the core competitiveness of the lithium-ion battery industry. The lack of core technology and patents may still be able to hide under the umbrella at home, but when a company really wants to go abroad and enter the international market, the lack of core technology patents will make it impossible to move.

We hope that the large number of lithium ion battery material manufacturers and battery manufacturers in China will learn lessons from the ZTE incident, invest more time and funds in the development of core technologies, and carry out the layout of core patents as soon as possible to avoid repeated mistakes. Let China make this huge ship can really go out of the country, to the world!

The page contains the contents of the machine translation.