Patent encumbrance of large automotive NiMH batteries
Encyclopedia
Encumbrance
Encumbrance is legal technical terminology for anything that affects or limits the title of a property, such as mortgages, leases, easements, liens, or restrictions. Also, those considered as potentially making the title defeasible are encumbrances...
of the commercialization of nickel metal hydride (NiMH) battery
Nickel metal hydride battery
A nickel–metal hydride cell, abbreviated NiMH, is a type of rechargeable battery similar to the nickel–cadmium cell. The NiMH battery uses a hydrogen-absorbing alloy for the negative electrode instead of cadmium. As in NiCd cells, the positive electrode is nickel oxyhydroxide...
technology by corporate interests. Nickel metal hydride battery technology is important to the development of battery electric vehicles (BEVs or EVs), plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs).
Background
The modern nickel-metal hydride (NiMH) electric vehicle batteryElectric vehicle battery
An electric vehicle battery or traction battery is a rechargeable battery used for propulsion of battery electric vehicles...
was invented by Dr. Masahiko Oshitani, of the GS Yuasa Corporation, and Stanford Ovshinsky, the founder of the Ovonics Battery Company
Ovonics
Energy Conversion Devices is headquartered in Rochester Hills, Michigan.United Solar Ovonic, LLC is its wholly owned subsidiary located in Auburn Hills, Michigan...
. The current trend in the industry is towards the development of lithium-ion (Li-Ion) technology to replace NiMH in electric vehicles. Some manufacturers maintain that NiMH batteries are important to the commercialization of plug-in hybrid electric vehicles (PHEV)s and battery electric vehicles (BEVs) because Li-Ion technology, while functionally superior due to its higher specific energy
Specific energy
Specific energy is defined as the energy per unit mass. Common metric units are J/kg. It is an intensive property. Contrast this with energy, which is an extensive property. There are two main types of specific energy: potential energy and specific kinetic energy. Others are the gray and sievert,...
and specific power
Specific power
In physics and engineering, surface power density or sometimes simply specific power is power per unit area.-Applications:* The intensity of electromagnetic radiation can be expressed in W/m2...
, is prohibitively expensive and relatively untested with regards to its long-term reliability.
General Motors and the US Auto Battery Consortium
Who Killed the Electric Car?
Who Killed the Electric Car? is a 2006 documentary film that explores the creation, limited commercialization, and subsequent destruction of the battery electric vehicle in the United States, specifically the General Motors EV1 of the mid 1990s...
, 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
California Air Resources Board
The California Air Resources Board, also known as CARB or ARB, is the "clean air agency" in the government of California. Established in 1967 in the Mulford-Carrell Act, combining the Bureau of Air Sanitation and the Motor Vehicle Pollution Control Board, CARB is a department within the...
(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
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
, Ford, and Chrysler
Chrysler
Chrysler Group LLC is a multinational automaker headquartered in Auburn Hills, Michigan, USA. Chrysler was first organized as the Chrysler Corporation in 1925....
, 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
Solectria Sunrise
The Solectria Sunrise was an innovative electric passenger car, designed to be as efficient as possible to produce long range from available battery technology....
, 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
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
acquired a controlling interest in Ovonics
Ovonics
Energy Conversion Devices is headquartered in Rochester Hills, Michigan.United Solar Ovonic, LLC is its wholly owned subsidiary located in Auburn Hills, Michigan...
's battery development and manufacture, including patents controlling the manufacture of large NiMH batteries
Nickel metal hydride battery
A nickel–metal hydride cell, abbreviated NiMH, is a type of rechargeable battery similar to the nickel–cadmium cell. The NiMH battery uses a hydrogen-absorbing alloy for the negative electrode instead of cadmium. As in NiCd cells, the positive electrode is nickel oxyhydroxide...
. 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 TexacoTexaco
Texaco is the name of an American oil retail brand. Its flagship product is its fuel "Texaco with Techron". It also owns the Havoline motor oil brand....
purchased General Motors' share in GM Ovonics. Texaco was itself acquired by rival Chevron
Chevron Corporation
Chevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
several months later. The same year, Ovonics filed a patent infringement suit against Toyota's battery supplier, Panasonic
Panasonic
Panasonic is an international brand name for Japanese electric products manufacturer Panasonic Corporation, which was formerly known as Matsushita Electric Industrial Co., Ltd...
, that ultimately succeeded in restricting the use of its large format NiMH batteries to certain transportation uses. In 2003, Texaco Ovonics Battery Systems was restructured into Cobasys
Cobasys
Cobasys LLC supplies nickel metal hydride batteries, battery control systems, and packaged solutions for automotive applications, uninterruptable power supplies, telecommunications applications, and distributed power generation...
, a 50/50 joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
between ChevronTexaco and Ovonics, now known as Energy Conversion Devices (ECD) Ovonics. Chevron's influence over Cobasys extends beyond a strict 50/50 joint venture. Chevron held a 19.99% interest in ECD Ovonics as of a public filing made January 15, 2003. In a later filing on May 17, 2005, 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
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
over the sale of Cobasys back to GM. As of March 2008, no agreement had been reached with GM.
Cobasys contracts demonstrated that the company was willing to sell smaller NiMH batteries (less than 10 amp-hours) for use with hybrid electric vehicles (HEV)
Hybrid electric vehicle
A hybrid electric vehicle is a type of hybrid vehicle and electric vehicle which combines a conventional internal combustion engine propulsion system with an electric propulsion system. The presence of the electric powertrain is intended to achieve either better fuel economy than a conventional...
. For instance, in March 2007, GM announced that it would use Cobasys NiMH batteries in the model year
Model year
The model year of a product is a number used worldwide, but with a high level of prominence in North America, to describe approximately when a product was produced, and indicates the coinciding base specification of that product....
2008 Chevrolet Malibu hybrid. Toyota uses NiMH batteries in all of its HEV models. However, Cobasys' sales policies raised questions about its willingness to sell larger format batteries for use in EVs and PHEVs.
In her 2007 book Plug-in Hybrids: The Cars that Will Recharge America, Sherry Boschert
Sherry Boschert
Sherry Boschert is a reporter and co-founder of the non-profit organization and of the . She is the author of the book Plug-in Hybrids: The Cars that Will Recharge America. She is a senior reporter and San Francisco bureau chief of the International Medical News Group, a division of Elsevier,...
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 EV
Toyota RAV4 EV
The RAV4 EV was an all-electric version of the popular RAV4 SUV produced by Toyota. It was leased from 1997 to 2003, and at the lessees request, many units were sold after the vehicle was discontinued. A total of 1,485 were leased and/or sold in California to meet the state’s mandate for...
s.
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
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
, 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."
Critics also argue that historical evidence demonstrates the willingness of the oil industry to engage in such anti-competitive behavior. In 1949, the U.S. Supreme Court found Chevron (then known as Standard Oil of California) guilty of conspiring to buy and dismantle the Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
electric street car system, in what became known as the Great American streetcar scandal. In an effort to prevent the passage of California's zero emission mandates in late 1993 and early 1994, oil companies also funded a series of advertisements that questioned the viability of electric vehicles.
Cobasys' problems with other potential customers also raised questions about the company's sales policies. 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
Mercedes-Benz
Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. Mercedes-Benz is a division of its parent company, Daimler AG...
sued Cobasys for again refusing to fill a large, previously agreed-upon order for NiMH batteries.
Current 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 CalCarsCalCars
CalCars is a charitable, non-profit organization founded in 2002 to promote plug-in hybrid electric vehicles as a key to addressing oil dependence and global warming both nationally and internationally...
, converted a Toyota Prius
Toyota Prius
The Toyota Prius is a full hybrid electric mid-size hatchback, formerly a compact sedan developed and manufactured by the Toyota Motor Corporation...
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. However, these batteries did not become commercially available until late 2007. The technical capabilities of current bipolar NiMH technology are also significantly more limited than those of the ECD Ovonics technology. For example, the operating temperature
Operating temperature
An operating temperature is the temperature at which an electrical or mechanical device operates. The device will operate effectively within a specified temperature range which varies based on the device function and application context, and ranges from the minimum operating temperature to the...
range for ECD Ovonics NiMH batteries, an important consideration for their use in consumer road vehicles, is -30 C, while the operating temperature range for Nilar's bipolar batteries is a more limited -6 C.
On July 28, 2009, Automotive News
Automotive News
Automotive News is a weekly newspaper written for 65,000 automotive retailers, suppliers and manufacturers. It is based in Detroit and owned by Crain Communications Inc. The brand has a team of more than 50 editors and reporters worldwide.- History :...
reported that Cobasys would be bought from Chevron and Energy Conversion Devices by battery maker SB LiMotive
SB LiMotive
SB LiMotive is a 50:50 joint company of Bosch and Samsung SDI founded in June 2008. The joint venture develops and manufactures lithium-ion batteries for use in hybrid-, plug-in hybrid vehicles and electric vehicles.-Milestones:...
, a joint venture of Bosch
Robert Bosch GmbH
Robert Bosch GmbH is a multinational engineering and electronics company headquartered in Gerlingen, near Stuttgart, Germany. It is the world's largest supplier of automotive components...
and Samsung
Samsung
The Samsung Group is a South Korean multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea...
. 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.