LG Energy Solution to license out battery patents to block tech infringement, exec says

By Heekyong Yang

SEOUL (Reuters) - LG Energy Solution said on Wednesday it would launch a new business model of licensing out its battery technologies next month, as infringements of the South Korean company's patents surge with competition to supply electric vehicle makers. LGES, the world's second-largest EV battery producer after China's CATL, will also consider issuing warning notices or suing those it suspects are infringing its patents, Lee Han Sun, head of LGES' intellectual property center, said in an interview. "Over the past two or three years, myriads of latecomers have sprung up in the EV battery sector globally, resulting in the spread of a price war and patent infringements," Lee said. LGES has evidence of patent infringements in many countries including the United States, India and China, Lee said. He declined to name the companies involved but claimed that about 580 of LGES' patents have been infringed and the number of violations would likely increase. LGES, which supplies batteries to Tesla, General Motors, Volkswagen and other automakers, said in a statement on Wednesday that patents were infringed in a wide range of technologies involving cylindrical battery manufacturing processes, electrolytes for high nickel batteries and silicon anode technology. LGES said it plans to use various patent monetization models by forming a global patent pool, aggregating patents it believes have been infringed, and licensing out the technology in phases. Demand for EV batteries reached more than 750 Gigawatt hours (GWh) in 2023, up 40% relative to 2022, according to the International Energy Agency. However, global battery demand is set to weaken sharply this year as EV demand cools, squeezing margins and cashflow of many battery makers. Earlier this month, Tesla said quarterly EV deliveries declined for the first time in nearly four years. Legacy automakers are slashing investment in EVs and doubling down on gasoline-powered vehicles, as consumer demand switches back to more affordable options. Lee said LGES has seen rivals which had infringed its technology win battery supply orders by offering products at lower prices. "Without patents, we could never justify spending fortunes on new products," Lee said. "There were times when we had to pour a lot of money (into research and development). For instance, about 20%-30% of our revenue went into research to develop lithium-ion batteries." LGES said it had spent about $4.5 billion in its battery research and development over the past decade.

(Reporting by Heekyong Yang; Editing by Miyoung Kim, Richard Chang and Lisa Shumaker)