Battery Market Challenges: Causes and Context

The battery sector has been experiencing significant turbulence. Various factors have led to extreme competition in the industry, especially in the United States, such as the slowing pace of electric vehicle adoption, persistent overcapacity in Asian supply chains, compressed margins, and evolving government subsidy frameworks. Western and Asian manufacturers are facing similar pressures to secure profitability and defend strategic market positions in the midst of this volatility.

Real-World Cases: IP as a Tool for Profitability and Competitor Control

In view of these market challenges, battery and battery materials companies increasingly have been using intellectual property to protect revenues and deter rivals. Notable recent examples include:

• Tulip Innovation vs. Sunwoda (Germany):

Tulip Innovation manages a large portfolio of LG Energy Solution (LGES) and Panasonic battery patents, offering licensing to global manufacturers and streamlining access to essential lithium-ion technology. Tulip Innovation's business success has been highlighted by real litigation outcomes: for example, Tulip Innovation successfully enforced separator and module patents against Chinese cell maker Sunwoda, resulting in German court-ordered sales bans and product recalls, which demonstrates the power of a targeted IP portfolio for reshaping supply relationships and protecting profits when market share is under threat. One of the key patents used by Tulip Innovation in its recent infringement lawsuits against Sunwoda in Germany—EP 2 378 595 B1 (electrode assembly and coated separator structure)—was previously at the center of global patent disputes between LGES and SK Innovation, including cases before the US International Trade Commission (ITC) and other jurisdictions.
 

• LG Chem vs. Ronbay (Korea/China):

LG Chem brought infringement actions against Ronbay, a major Chinese cathode supplier, targeting their advanced NCM cathode technology, while Ronbay responded by challenging the validity of LG Chem's patents. This ongoing dispute involves major suppliers in the EV battery sector and highlights the competitive and legal tensions in securing technology leadership and market access for cathode materials, and underscores the need for activity in multiple jurisdictions for successful patent assertion and defense.
 

• SK Nexilis vs. Solus Advanced Materials (Korea/US/EU):

Two Korean copper foil makers, SK Nexilis and Solus Advanced Materials, have been involved in ongoing patent and trade secret disputes relating to copper foil technology for lithium-ion batteries. The conflict has spanned multiple jurisdictions, including Korea, the U.S., and Europe, in which SK Nexilis has filed lawsuits claiming patent infringement and trade secret misappropriation, while Solus Advanced Materials has responded with counterclaims and patent invalidation actions. As both companies are key global suppliers of copper foil, the conflict has significance in that the outcome will directly impact supply contracts, market share, and the competitive landscape in advanced battery manufacturing.
 

• LG Chem vs. CAMX Power (Korea):

CAMX Power has achieved significant success through battery cathode technology licensing. Its flagship GEMXTM cathode platform engineering the grain boundaries of high-nickel, low-cobalt materials with cobalt enrichment is protected by over 30 patents globally, and has been licensed to multiple major industry players, including LG Energy Solution, Samsung SDI, Panasonic Energy, BASF, Umicore, EcoPro BM, L&F, and the EV metal group. However, LG Chem was able to successfully challenge and invalidate a key cathode patent held by CAMX Power in Korea on the basis that the patent was an obvious variation on an earlier CAMX patent using the same examples, though this decision has been appealed by CAMX. If upheld, this action has the potential to eliminate future royalty payments in Korea and substantially strengthen the negotiating position of Korean suppliers.
 

• CATL vs. CALB (China) 

Two of China's leading battery makers have been engaged in multiple ongoing patent lawsuits. CATL has accused CALB of infringing patents relating to battery modules and thermal management, and is seeking injunctions and significant damages. CALB has responded with counterclaims of invalidity and has filed separate lawsuits against CATL involving other battery-related technologies. CATL has filed patent lawsuits in China against several other Chinese battery manufacturers as well, and has thus far prevailed in most of these cases. Given the recent rapid increase in CATL's overseas applications and the fact that it is building factories overseas, it seems likely that CATL will continue to aggressively pursue patent enforcement overseas as part of its business strategy.

The Importance of Strong IP in Korea

As the above summary of patent disputes clearly shows, Korean companies in particular have been very actively involved in global battery patent disputes. Strong IP in Korea is therefore increasingly important for defending battery market share and negotiating leverage both in Korea and globally, in view of Korean battery companies' technological prowess and the broad reach of their supply chains. Korean battery companies increasingly seem to recognize the use of patents as a potential additional revenue stream in addition to being a tool to defend their businesses, particularly after the patent/trade secret battle between LG ES and SK Innovation, which was settled in April 2021 for $1.8 billion. As a result, Korean battery companies have been steadily growing their patent portfolios both in Korea and in other major markets such as the US, Europe, Japan, and China, distinguishing them from Chinese companies who have largely only recently begun to focus on acquiring foreign patents, as well as from Japanese companies who have tended to be reluctant to engage aggressively in patent litigation.

Korea also recently made available expedited patent examination for applications relating to certain green technologies, including secondary batteries, which is likely to be very useful to Korean battery companies in obtaining early patent protection and supporting their global patent strategies based on allowed Korean patents. Such expedited examination is potentially available to all applicants, not just Korean entities, and may be a useful tool for any industry players seeking to rapidly grow their battery portfolios.

On the other hand, battery inventions commonly involve claiming specific parameters or specific ranges of known values/properties, but it can be difficult to obtain or defend such claims in Korea due to strict patentability standards for these types of claims under Korean practice. Successful prosecution and enforcement of battery patents in Korea is therefore likely to require careful review and preparation in order to successfully comply with such Korean patentability requirements.

Conclusion

As the competitive landscape shifts, profitability and strategic advantage likely will favor firms that invest in robust, dynamic patent portfolios, including a particular focus on Korean IP, since having IP available to use as both a shield and sword will be key to surviving market challenges and seizing future opportunities in a rapidly evolving industry.