Call it coincidence or inevitability, but since we published our last article on Electric Vehicle (“EV”) technology, I ended up purchasing an electric vehicle - a Tesla Model Y, to be exact. This experience has only deepened my fascination with the universal shift towards EVs. Recently, our Clean Tech sub-committee at the American Intellectual Property Law Association had the pleasure of hosting my friend and colleague, Kyle Vallecillo, Senior IP Counsel at LG Energy Solution. Kyle presented on the colorful, yet surprisingly dramatic, history of EVs and the significant impact the IP system has had on the evolution of the batteries that literally drive this technology.
Inspired by this captivating presentation, and the love I have for my Tesla, we decided to team up with Kyle to co-author this article and share the fascinating story of EV development, set against a backdrop of research labs, patent offices, backdoor misappropriation, and courtrooms. Think batteries are boring? Think again! We hope you enjoy our article.
In a bit of foreshadowing into the critical role patents will play in the evolution of EV technology, the term "battery" was originally coined by Benjamin Franklin. By linking multiple Leyden jars together, Franklin discovered that he could increase their storage capacity. This new assembly of Leyden jars was the original battery. Today, batteries can be divided into two categories: primary (single-use) and secondary (rechargeable). With all due respect to the man featured on the $100 bill, this article will focus exclusively on the latter.
The first rechargeable batteries date back to the early 1900s. These lead-acid batteries were used in early vehicle technology and are still in limited use today. In the late 1940s, nickel-cadmium (NiCad) batteries gained popularity. However, due to environmental and health risks, as well as performance issues, these were replaced by nickel-metal hydride (NiMH) batteries, which offered a cleaner alternative. Despite their advantages, NiMH batteries struggled to meet the increasing energy demands of rapidly evolving mobile computing devices. This led to the emergence of the battery type we are all now intimately familiar with: lithium-ion batteries. Lithium-ion batteries provide three times the voltage of nickel-based batteries, making them well-suited for devices requiring high capacity and power. Due to their high capacity, power, and longer usage times, lithium-ion batteries are currently the most widely used secondary batteries.
Lithium-ion batteries are used in most mobile electronic devices today, from smartphones to EVs. The unsung hero in the development and proliferation of lithium-ion batteries, particularly in the EV space, is LG Energy Solution (LGES) - and I’m not just saying that because Kyle co-wrote this article! Among LGES’s most notable accomplishments are delivering the world's first automobile battery in 2009, which was adopted by the world's first mass-produced EV (General Motors’ “Volt”), and developing the world's first Nickel Cobalt Manganese Aluminum (“NCMA”) high-capacity battery in 2021. LGES has also established four EV battery joint ventures with key players such as General Motors, Hyundai Motor Company, Stellantis NV, and Honda. As of December 2023, it was reported that since 2009, a total of 1.2 billion LGES cells have been used in more than 7.5 million EVs.
LGES has established itself as a pivotal player in the EV battery market by developing various types of advanced lithium-ion batteries. These batteries feature high-tech materials, such as a high-capacity NCMA cathode (incorporating nickel, cobalt, manganese, and aluminum) and an efficient silicon anode to ensure longer driving distances, faster charging, and longer product life. LGES’s application of ceramic coated separators, unique flexible pouch cell design, and a two-layer coating for electrodes, has maximized energy density and battery lifespan, while minimizing charging time and space utilization. LGES’s innovative track record and expertise in material engineering, design, processing, and quality management have earned them the reputation of being a true “battery pioneer” in the global battery industry.
With an impressive portfolio spanning over 30,000 patents globally, LGES has leveraged the global patent system to protect its valuable innovations. A quick search on NLPatent reveals that nearly half of this portfolio is related to the structure and application of lithium-ion batteries.
Strong IP rights have supported LGES’s investment in R&D and subsequent commercialization of its battery technology. However, patents are not the only form of IP valuable to EV innovators like LGES. Trade secrets around the manufacturing processes, formulas, designs, and practices play an equally important role in protecting competitive advantage in the EV space. Trade secret misappropriation can lead to significant financial losses and diminish a company's ability to capitalize on its innovations, a reality with which LGES is unfortunately familiar.
In 2017, around 100 LGES employees were lured to join the Korean energy company SK Innovation (SKI) to develop EV batteries. As the ensuing litigation revealed, these employees leveraged considerable LGES trade secrets related to LGES’s manufacturing processes and virtually every aspect of its EV battery design. During discovery, a critical piece of evidence was uncovered: a spreadsheet labeled “6125” found in SKI’s electronic recycling bin, detailing thousands of LG documents and their planned destruction order. This discovery underscored the severity of the misappropriation and ultimately contributed to a landmark $1.8 billion settlement.
Trade secret theft is more common, and the ensuing consequences are more dire than most people realize. Tesla, another key player in the EV space, and the maker of my beloved Model Y, has been dealing with trade secret misappropriation issues of its own. In a recent case, Tesla accused its “trusted supplier,” Matthews International, of betraying their confidentiality agreement regarding Tesla’s proprietary dry-electrode manufacturing process. As a trusted supplier, Matthews had access to some of Tesla’s most valuable trade secrets, which they agreed in writing to keep in strict confidence.
All was well until Matthews allegedly used this proprietary information to file their own patent applications attempting to claim ownership and inventorship of Tesla's trade secrets. This led to the public disclosure of a subset of Tesla's extremely valuable technology, causing direct and serious harm to Tesla’s business. Since discovering Matthews’ improper conduct, Tesla has been working to block and delay publication of the affected applications, and only a subset of Tesla’s confidential information regarding dry-electrode manufacturing has been published thus far.
To make matters worse, Matthews is accused of disclosing this information to other companies, including competitors, and selling equipment used for dry-electrode battery manufacturing embodying these trade secrets. Tesla never authorized, and in fact expressly prohibited, any inspection or demonstration of any equipment or machines incorporating Tesla trade secrets by or to any competitor. That’s the thing about trade secrets - they must be kept confidential or they become worthless; an outcome devastating innovative businesses such as Tesla.
As both a victim and observer to the aforementioned IP theft, LGES, as a leading battery innovator for over 30 years, continues to face issues with “free riders” exploiting its technologies in consumer electronics, energy storage systems, and EVs. The rapid growth of the global EV battery market has led to increased competition and IP infringement, particularly from new entrants bypassing patent regulations.
Rather than retreat, LGES is charging ahead with a modern approach to counteract unauthorized use of its patents. LGES has teamed up with another powerful industry leader, Panasonic Energy, to establish a global patent pool with fair licensing practices, aiming to foster industry growth and ensure proper returns on its inventions for reinvestment into future innovation. This strategic licensing partnership is designed to create new revenue streams, accelerate the adoption of innovative solutions, and has proven to be a force multiplier where one plus one equals three.
To stake a claim in this rapidly evolving and highly competitive space, companies need to develop an IP strategy focused on maximizing the value of their R&D, facilitating collaborations, and ensuring compliance with regulations. After all, the patent system was devised to encourage public disclosure of inventions by providing legal rights that incentivize companies to innovate. In the EV battery sector, this means that cutting-edge technologies, like solid-state batteries or advanced recycling methods, can be developed with the assurance (or at least the hope) that they will be shielded from imitation.
On top of that, intellectual property rights are, by definition, property rights. They can be sold, traded, licensed or even pooled together to facilitate fair collaborations by clearly delineating the ownership and usage rights of shared technologies. This flexibility allows companies to access a broader range of technologies and avoid litigation.
The role of IP, including patents and trade secrets, in protecting and promoting innovation cannot be overstated. Despite the legal foundations for protection of IP being laid hundreds of years ago, the innovations driving us forward have been rapidly evolving, much like the best-in-class tools used to conduct IP research in this domain (like NLPatent). Whether you’re working on new EV battery technology (like LGES) or developing AI systems to search and analyze patent information (like us), the IP system is designed to protect, monetize, and incentivize R&D efforts in every field. Stay innovative out there, folks!
Sign up to receive alerts when we publish more blog posts about how NLPatent has brought success to the field of IP and AI.
.svg)
.png)
.svg){kind=small}
