Cobasys - Patent Dispute With Panasonic EV Energy

Patent Dispute With Panasonic EV Energy

Panasonic EV Energy (PEVE), a joint venture between Matsushita and Toyota begun in 1996, pioneered several advances in large-format NiMH batteries suitable for electric vehicles.

PEVE supplied higher capacity (28Ah-95Ah) NiMH batteries for use in Toyota, Honda, and Ford battery electric vehicles (BEVs) that began production in 1997. PEVE's lower capacity batteries powered the hybrid electric vehicle (HEV) Toyota Prius, which was introduced in Japan in 1997, and sold 18,000 units in its first year of production, as well as the first Honda Insight and, with Sanyo Electric Co, first generation Civic hybrid models. BEV production by major automakers ceased in the early 2000s, with most leased BEV vehicles crushed by their manufacturers, and replacement batteries unavailable for remaining vehicles.

A 2001 patent infringement lawsuit brought by ECD Ovonics and Ovonic Battery Company, Inc. against Matsushita, Toyota, and PEVE was settled in July 2004. Settlement terms called for cross-licensing between parties of current and future NiMH-related patents filed through December 31, 2014. The terms prevented Matushita, Toyota, and PEVE from selling certain NiMH batteries for transportation applications in North America until the second half of 2007, and commercial quantities of certain NiMH batteries in North America until the second half of 2010. Additionally, Ovonic Battery Co. and ECD Ovonics received a $10 million patent license fee, Cobasys received a $20 million patent license fee, $16 million of which was earmarked to reimburse legal expenses, and Cobasys would receive royalties on certain batteries sold by Matushita/PEVE in North America.

Licensing terms were expanded in 2005, with PEVE granted further license to sell NiMH batteries for certain transportation applications in North America, in exchange for royalties paid to Cobasys through 2014.