Toyota sued for patent infringement on electromagnetic steel sheets

Toyota Motor Corporation faces patent infringement charges over electromagnetic steel sheets used in manufacturing its electrified vehicles. The suit was filed by Nippon Steel, Japan’s biggest steelmaker.

This is the first time that Japan's top steelmaker is taking one of its biggest customers to court [Image: Reuters]

In a report by Reuters, Nippon Steel is seeking damages of 20 billion yen (almost Php 8.9 billion) each against the world’s number two automaker and one of its suppliers, Baoshan Iron & Steel Co. Ltd. of China. The charges were filed with a Tokyo district court, alleging that the two companies violated Nippon Steel’s patents concerning non-oriented magnetic steel sheets. 

“Electrical steel sheets are indispensable materials for automobile electrification and are one of our key products aimed at helping decarbonization for cars, electrical products, and power plants,” a spokesperson for Nippon Steel said. Recent negotiations have seen Toyota and Nippon Steel struggle to reach an agreement over steel product prices, after the latter raised the possibility of supply cuts due to a rise in the cost of raw materials. 

Both Toyota and China's Baosteel have denied the allegations

The lawsuit claims that Baoshan violated the Japanese steelmaker’s patents regarding components and thickness necessary to produce the steel sheets for Toyota, forcing Nippon Steel to take legal action after three-way talks with Toyota and Baoshan failed to resolve the matter. In addition to the lawsuit, Nippon Steel also filed for an injunction to prevent Toyota from manufacturing and marketing its electrified vehicles that use the steel sheets in question. The exact models using the material were not disclosed. 

Observers note that the case is unprecedented as this is the first time the company has filed a patent infringement lawsuit against Japan’s biggest automaker. A long-standing customer of Nippon Steel, Toyota issued a statement and countered that it scrutinizes contracts with its material manufacturers to ensure that no patent infringement takes place.  

Toyota sold over 500,000 hybrids and other electrified vehicles in Japan in 2020

“It is with great regret that we have learned that Nippon Steel, which has supported the Japanese automobile industry and our company’s automobile manufacturing for many years and is an important business partner of ours, decided to file such a lawsuit against us, as we are a material user,” the carmaker said, reiterating that such matters should be discussed privately. 

For its part, Baoshan also denied any wrongdoing in its dealings with Toyota, saying that it disputes Nippon Steel’s allegations and that it will ‘firmly’ defend its interests.    

There are no patent infringements on our industry updates at Philkotse.com.