The global electric vehicle (EV) revolution hinges on battery technology. As competition intensifies, intellectual property (IP) has become a critical battleground. Nowhere is this clearer than in China, the world’s largest EV market. The high-stakes patent war between Contemporary Amperex Technology Co. Limited (CATL) and China Aviation Lithium Battery Co., Ltd. (CALB, now known as 中创新航 or Zhongxin Hang) offers a powerful case study in corporate strategy, legal enforcement, and the vital importance of IP due diligence.
The Contenders and the Stakes
- CATL: The undisputed global leader in lithium-ion batteries, supplying giants like Tesla, BMW, and NIO. Holding thousands of patents, CATL aggressively protects its technological edge.
- CALB (中创新航): A rapidly rising challenger, securing major customers like GAC Aion and XPeng. Its ambitious growth and IPO plans made it a direct competitor.
The Core Conflict: CATL alleged CALB infringed multiple core patents covering essential battery technologies vital for performance, safety, and manufacturing efficiency.
Timeline of a High-Profile Dispute
- July 2021: CATL files lawsuits against CALB in the Fujian Provincial High Court, alleging infringement of 5 utility model patents and 3 invention patents. The claims covered critical areas:
- Battery Cell Design: Electrode assemblies, top covers, and explosion-proof components.
- Module/Pack Design: Structural components for safety and thermal management.
- Manufacturing Processes: Techniques for improving yield and consistency.
- May 2022: The Fujian High Court issues a preliminary injunction, ordering CALB to immediately halt production and sales of the infringing batteries – a major operational blow.
- August 2022: CALB countersues, seeking a declaration that CATL’s patents are invalid. They argued the patents lacked novelty or inventive step.
- November 2022: CALB achieves a partial victory as the China National Intellectual Property Administration (CNIPA) invalidates one of the contested CATL utility model patents. Other validity challenges continued.
- February 2023: In a landmark ruling, the Fujian High Court finds CALB liable for infringing two key CATL patents. The court orders CALB to:
- Cease infringement immediately.
- Pay CATL 5.18 million RMB (approx. $750,000 USD) in damages.
- Pay 500,000 RMB (approx. $72,000 USD) in legal fees.
- July 2023: Both companies announce a global settlement, ending all pending lawsuits in China. Key terms included:
- CALB paying an undisclosed sum to CATL.
- CALB securing non-exclusive licenses for CATL’s disputed patents.
- CALB agreeing to withdraw all pending invalidation requests against CATL’s patents.
Why This Case Matters: Key Implications
- Heightened Enforcement & Damages: Chinese courts are increasingly willing to grant preliminary injunctions and award significant damages in complex technical IP cases. The $750k+ award, while lower than some Western cases, signaled a shift towards stronger patent holder protection. The injunction demonstrated the real-time business impact of infringement findings.
- Strategic Use of Patent Portfolios: CATL leveraged its vast patent portfolio not just defensively, but offensively to hinder a major competitor’s momentum during a critical growth and IPO phase. This showcases IP as a core competitive weapon.
- The Critical Role of Patent Validity: CALB’s partial success in invalidating one patent highlights the importance of rigorous patent search and validity analysis. Challenging weak patents remains a viable defense strategy, but requires deep technical and legal expertise.
- Settlement as Strategic Resolution: The global settlement, while costly for CALB, allowed both parties to avoid protracted, expensive litigation and business uncertainty. It secured CATL compensation and licensing fees, while giving CALB freedom to operate with the necessary licenses.
- Due Diligence is Non-Negotiable: This case underscores the critical importance of comprehensive IP due diligence for any company operating in or engaging with China’s high-tech sectors. This includes:
- Freedom-to-Operate (FTO) Analysis: Thoroughly searching active patents to assess infringement risks before launching products or technologies.
- Patent Landscape Analysis: Understanding competitors’ patent portfolios and strengths.
- Patent Strength Assessment: Evaluating the validity and enforceability of key patents, both your own and competitors’.
- Robust IP Strategy: Developing clear policies for creation, protection, and enforcement of IP rights.
Lessons for the Global Market
The CATL vs. CALB battle is not an isolated incident. As global EV and battery competition intensifies, similar disputes are likely to erupt worldwide. Companies must:
- Invest Proactively in IP: Build strong, defensible patent portfolios around core innovations.
- Conduct Rigorous Due Diligence: Never assume FTO. Comprehensive patent search and verification is essential before market entry, partnerships, or major investments.
- Develop Enforcement Readiness: Have a clear strategy and resources for enforcing rights or defending against allegations.
- Monitor the Competitive Landscape: Continuously track competitor patenting activity and litigation trends.
Navigating China’s Complex IP Terrain Requires Expertise
Understanding the validity, scope, and enforcement landscape of Chinese patents is complex. Partnering with experts who possess deep knowledge of China’s IP system, access to authoritative databases like the CNIPA, and experience in technical analysis is crucial for mitigating risk and making informed strategic decisions. Thorough IP verification provides the foundation for market confidence.