ECD Nets $30M in Battery Dispute

Some three years after Energy Conversion Devices filed suit against Matsushita, Panasonic EV Energy Co., and Toyota Motor Corp. for patent infringement on its nickel-metal-hydride (NiMH) battery technology used in hybrid electric vehicles, the dispute and accompanying counterclaims have been resolved. According to papers filed with the U.S. Securities and Exchange Commission, Energy Conversion Devices (ECD Ovonics) and COBASYS LLC, its 50-50 manufacturing joint venture with ChevronTexaco Technology Ventures LLC, will receive a $30 million settlement. No party admitted liability.

The suit was heard before the International Chamber of Commerce, International Court of Arbitration. Under the terms of the settlement, COBASYS and Panasonic EV Energy will cross license their current and future patents to avoid the potential for future legal entanglement. Also, the two companies have agreed to collaborate on development of next-generation NiMH batteries for hybrid vehicles, a move that can only be viewed as a positive thing for furthering the commercial success of high fuel efficiency, low emission hybrids.

This is not the first time that Energy Conversion Devices has vigorously sought to defend its advanced battery patents, which are based on the pioneering work of ECD founder and president Stanford Ovshinsky in the 1950s. After warnings from ECD that Matsushita was infringing on its patents in early 1996, Matsushita filed suit against ECD in U.S. District Court in Delaware seeking to have some of ECD's NiMH patents declared invalid. ECD answered that action by filing for a preliminary injunction in federal district court in Detroit that sought to enjoin Toyota from fleet testing its Matsushita NiMH-equipped RAV4 electric vehicles. A year earlier, ECD filed an unrelated patent infringement suit against Sanyo Electric, Toshiba, and Yuasa Battery Co. that went before the Federal Trade Commission, resulting in the three companies settling with ECD.