The patent encumbrance of large automotive NiMH batteries refers to allegations that corporate interests have used the patent system to prevent the commercialization of nickel metal hydride (NiMH) battery technology. Nickel metal hydride battery technology is potentially important to the development of battery electric vehicles (BEVs or EVs), plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs). Others hold that the commercial development of nickel metal hydride batteries is the result of the inability of the technology to compete with lighter weight lithium batteries.
Background
The modern nickel-metal hydride (NiMH) electric vehicle battery was invented by Dr. Masahiko Oshitani, of the GS Yuasa Corporation, and Stanford Ovshinsky, the founder of the Ovonics Battery Company, and granted a patent. The current trend in the industry is towards the development of lithium-ion (Li-Ion) technology to replace NiMH in electric vehicles. In 2009, Toyota tested lithium batteries as a potential replacement for the nickel metal hydride batteries used in its Prius model gasoline-electric hybrid. The company said that it would continue to use NiMH batteries in the Prius, but would introduce an all-electric vehicle based on lithium technology. Li-Ion technology, while functionally superior due to its higher specific energy and specific power, it is more expensive and, as of 2009, relatively untested with regards to its long-term reliability. In 2007, the National Renewable Energy Laboratory said that Li-Ion batteries may be subject to dangerous overheating and fire if cells are controlled incorrectly or damaged. In 2011, the National Highway Traffic Safety Administration investigated the safety of lithium battery powered vehicles and concluded that they pose no more risk of fire than other vehicles.
According to the United States Department of Energy. the primary advantages of lithium batteries include their high power-to-weight ratio, high energy efficiency, good high temperature performance, and low tendency to spontaneously discharge when left unused for extended periods of times. Nickel hydride batteries have higher self-discharge, tend to generate heat at high temperatures, and have problems with hydrogen loss.
General Motors and the US Auto Battery Consortium
In an interview in the 2006 documentary Who Killed the Electric Car?, Ovshinsky stated that in the early 1990s, the auto industry created the US Auto Battery Consortium (USABC) to stifle the development of electric vehicle technology by preventing the dissemination of knowledge about Ovshinky's battery-related patents to the public through the California Air Resources Board (CARB).
According to Ovshinsky, the auto industry falsely suggested that NiMH technology was not yet ready for widespread use in road cars. Members of the USABC, including General Motors, Ford, and Chrysler, threatened to take legal action against Ovshinsky if he continued to promote NiMH's potential for use in BEVs, and if he continued to lend test batteries to Solectria, a start-up electric vehicle maker that was not part of the USABC. The Big Three car companies argued that his behavior violated their exclusive rights to the battery technology, because they had matched a federal government grant given to Ovonics to develop NiMH technology. Critics argue that the Big Three were more interested in convincing CARB members that electric vehicles were not technologically and commercially viable.
In 1994, General Motors acquired a controlling interest in Ovonics's battery development and manufacture, including patents controlling the manufacture of large NiMH batteries. The original intent of the equity alliance was to develop NiMH batteries for GM's EV1 BEV. Sales of GM-Ovonics batteries were later taken over by GM manager and critic of CARB John Williams, leading Ovshinsky to wonder whether his decision to sell to GM had been naive. The EV1 program was shut down by GM before the new NiMH battery could be commercialized, despite field tests that indicated the Ovonics battery extended the EV1's range to over 150 miles.
Chevron and Cobasys
In 2001, oil company Texaco purchased General Motors' share in GM Ovonics. Texaco was itself acquired by rival Chevron several months later. The same year, Ovonics filed a patent infringement suit against Toyota's battery supplier, Panasonic, that led to a negotiated settlement in 2004. The agreement included extensive cross-licensing of each company's patents, a joint research venture to improve nickel hydride battery technology, and restrictions on Panasonic's use of its large format NiMH batteries for certain transportation uses until 2007. In 2003, Texaco Ovonics Battery Systems was restructured into Cobasys, a 50/50 joint venture between ChevronTexaco and Ovonics, now known as Energy Conversion Devices (ECD) Ovonics. Energy Conversion Devices announced that they had exercised an option to purchase back 4,376,633 shares of stock from a Chevron subsidiary, and would cancel and return them to authorized-unissued status. This is the exact number of shares that was listed as owned by ChevronTexaco in the January 15, 2003 filing.
ChevronTexaco also maintained veto power over any sale or licensing of NiMH technology. In addition, ChevronTexaco maintained the right to seize all of Cobasys' intellectual property rights in the event that ECD Ovonics did not fulfill its contractual obligations. On September 10, 2007, ChevronTexaco (now known as simply "Chevron") filed suit claiming that ECD Ovonics had not fulfilled its obligations. ECD Ovonics disputed this claim. The arbitration hearing has been repeatedly suspended while the parties negotiated with General Motors over the sale of Cobasys back to GM. As of March 2008, no agreement had been reached with GM.
In her 2007 book Plug-in Hybrids: The Cars that Will Recharge America, Sherry Boschert argues that large-format NiMH batteries (i.e., 25 amp-hours or more) are commercially viable but that Cobasys would only accept very large orders (more than 10,000) for these batteries. The effect is that this policy precludes small companies and individuals from buying them. It also precludes larger auto manufacturers from developing test fleets of new PHEV and EV designs. Toyota employees complained about the difficulty in getting smaller orders of large format NiMH batteries to service the existing 825 RAV4 EVs. Since no other companies were willing to make large orders, Cobasys was not manufacturing nor licensing any large format NiMH battery technology for automotive purposes. Boschert quotes Dave Goldstein, president of the Electric Vehicle Association of Washington D.C., as saying this policy is necessary because the cost of setting up a multimillion-dollar battery assembly line could not be justified without guaranteed orders of 100,000 batteries (~12,000 EVs) per year for 3 years. Boschert concludes that, "it's possible that Cobasys (Chevron) is squelching all access to large NiMH batteries through its control of patent licenses in order to remove a competitor to gasoline. Or it's possible that Cobasys simply wants the market for itself and is waiting for a major automaker to start producing plug-in hybrids or electric vehicles."
In an interview with The Economist, Ovshinsky subscribed to the former view. "I think we at ECD made a mistake of having a joint venture with an oil company, frankly speaking. And I think it's not a good idea to go into business with somebody whose strategies would put you out of business, rather than building the business." In the same interview, however, when asked, "So it’s your opinion that Cobasys is preventing other people from making it for that reason?", he responded, "Cobasys is not preventing anybody. Cobasys just needs an infusion of cash."
In October 2007, International Acquisitions Services, Inc. and Innovative Transportation Systems AG filed suit against Cobasys and its parents for refusing to fill a large, previously agreed-upon, order for large-format NiMH batteries to be used in the Innovan electric vehicle. In August 2008, Mercedes-Benz sued Cobasys for again refusing to fill a large, previously agreed-upon order for NiMH batteries.
Timeline of legal status of the Ovonics battery technology
Multiple companies have tried to develop NiMH battery technology without making use of Ovonics' patents. Electro Energy Inc., working with CalCars, converted a Toyota Prius from a hybrid electric vehicle to a PHEV using its own bipolar NiMH batteries. Plug-In Conversions uses Nilar NiMH batteries and the EAA-PHEV open source control system in its Prius PHEV conversions. These organizations maintain that these developments are allowable because their NiMH battery technologies are not covered by Cobasys' patents. These batteries became commercially available in late 2007.
On July 28, 2009, Automotive News reported that Cobasys would be bought from Chevron and Energy Conversion Devices by battery maker SB LiMotive, a joint venture of Bosch and Samsung. At the time of the 2009 Cobasys sale, control of NiMH battery technology transferred back to ECD Ovonics. In October 2009, ECD Ovonics announced that their next-generation NiMH batteries will provide specific energy and power that are comparable to those of lithium-ion batteries at a cost that is significantly lower than the cost of lithium-ion batteries.
On February 3, 2010, patent JP2003504507 was refused, hence removing any patent encumbrance in Japan.
On July 2, 2010, patent US6413670, expired due to lack of fee payments for the 8th year from filing the patent, hence removing any patent encumbrance in the USA.
On February 14, 2012, BASF announced that it had acquired Ovonic Battery Company from Energy Conversion Devices Inc. But Chevron Corp. still holds the patent US6969567 for the NiMH multi-cell battery pack for cars.
There may be other patents which are still current and may affect the production of NiMH multi-cell battery packs, such as patent US6969567, which covers a multi-cell battery pack and expires 20 years from its priority date, on August 23, 2018. The patent payments for the 4th (2008) and 8th (2012) years were paid.
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