History
Who Controls the Large Capacity NiMH Batteries for 100% Pure Electric Cars?
A complicated series of corporate mergers, actions, moves, lawsuits, sales and transfers have lead to confusion over the NiMH battery patents ownership. The following history traces the large capacity automotive traction NiMH battery from its inventor to the power currently possessing them.
The NiMH battery started out in the hands of ECD Ovonics, a company founded by the battery’s inventor, Standford Ovshinsky. Ovshinsky received Time Magazine’s “Hero for the Planet” recognition for the NiMH battery invention in 1999.
Mr. Ovshinsky invented small, powerful batteries made from alloys called nickel metal hydrides. American manufacturers did not show a significant interest, but Japanese electronic conglomerates embraced the technology very quickly. In 1998 alone, they made 780 million NiMH batteries for computers and other electronics. Nova aired a documentary on Ovshinsky titled “Japan’s American Genius” (1998).
Prior to this, Ovshinsky discussed the possibility of making large capacity batteries to run cars. Auto corporations rejected that idea as ridiculous. Time Magazine (1999) recorded:
“The auto companies said it wouldn’t work,” he recalls. “Then, after one car got 200 miles on a single charge, they said it couldn’t be manufactured. Now that we are making them, they say it is too costly. But that is a red herring too.” Ovshinsky’s team of engineers and electrochemists claim they have slashed the cost 40% in two years. If automakers would commit to buying tens of thousands, Ovshinsky says, the batteries would make electric cars as cheap as gasoline models.
“Automakers built an industry on gasoline,” says an undaunted Ovshinsky. “And large corporations don’t change easily. But electric cars are here. The genie is out of the bottle.”
And yes, the genie was out of the bottle, but somehow got buried back into the ground.
| 1982 | Energy Conversion Devices (Ovonic) Battery Company is formed. |
| 1990 | California Air Resources Board (CARB) executed the Zero-Emissions Vehicles (ZEV) mandate that forced General Motors (GM) and other automakers to produce zero emission, battery-powered electric cars such as the GM EV-1 and Toyota RAV4-EV. This mandate required 2% of new vehicles sold or leased in the state to be ZEVs by the 1998 model year, and 10% by the 2003 model year. The only option for automotive companies: Pure All Electric Vehicles. |
| 1990 | Energy Conversion Devices (Ovonic) Battery Company starts manufacturing of Electric Vehicles (EV) and industrial Nickel Metal Hydride (NiMH) battery cells. |
| 1992 | Energy Conversion Devices (Ovonic) Battery Company is awarded the first USABC contract to develop EV batteries. |
| 1993 | First application of NiMH batteries in Chrysler’s TE Van. |
| 1994 | Ovonic Battery Company formed a joint venture with GM, called GM Ovonic Battery, to manufacture NiMH batteries for electric vehicles. GM was given a 60% share of the venture while Energy Conversion Devices (Ovonic) Battery Company was given 40%. With this joint venture, GM acquired a controlling interest in NiMH battery development and manufacturing including control of NiMH battery patents. |
| 1996 | Four-passenger Electric Car with Ovonics NiMH batteries wins Tour de Sol Race – 373 miles on single charge. |
| 1996 | Panasonic EV Energy (PEVE), a joint venture between Matsushita and Toyota begin production of several advanced large-capacity NiMH batteries suitable for 100 % electric vehicles. |
| 1997 | Panasonic starts production of small capacity NiMH batteries for hybrid vehicles that are used in Toyota Prius and many other hybrid vehicles today. |
| 1999 | Alan Lloyd, Chairman to the California Air Resources Board was appointed by Governor Gray Davis. |
| 2000 | Hundreds of pure Electric Vehicles powered by NiMH large capacity batteries are cruising the roads in California. Ford Ranger Pick-Ups, GM EV1′s, Chevrolet S-10′s, Toyota RAV4 EV’s … ranging from 50 – 130 miles per battery charge. |
| 2000 | Rick Wagoner becomes GM’s president and chief executive officer (CEO). |
| 2000 | May 1, Texaco purchases a 20% equity stake in Energy Conversion Devices (Ovonic) Battery Company for $67.4 million. Under the terms of the agreement, Texaco has rights to purchase additional shares to maintain its 20% equity interest. |
| 2000 | October, Texaco buys GM’s 60% share in GM Ovonics Battery Systems, adding to their existing 20% share in the Energy Conversion Devices (Ovonic) Battery Company. They immediately restructured the old joint venture as a new 50-50 partnership with Energy Conversion Devices (Ovonic) Battery Company now renamed Texaco Ovonic Battery Systems LLC. |
| 2000 | Less then a week after Texaco acquired control of the NiMH batteries from GM, Chevron Oil Company buys Texaco in a $100 billion merger forming Chevron Texaco. The NiMH battery patents and manufacturing rights, previously owned by GM now belong to Chevron. In addition to holding 50% share in Texaco Ovonic Battery Systems LLC, Chevron holds a 20% interest in Energy Conversion Devices (Ovonic) Battery Company and maintains veto power over any sales of Texaco Ovonic Battery Systems NiMH technology. In addition, Chevron maintains the right to seize all of Texaco Ovonic Battery Systems’ intellectual property rights in the event that Energy Conversion Devices (Ovonic) Battery Company does not fulfill its contractual obligations. In 2004 this joint venture was renamed Cobasys LLC. |
| 2001 | Alan Lloyd was responsible for the amendment to the ZEV mandate that essentially made that mandate unenforceable because only the federal government can regulate miles-per-gallon guidelines. This effectively undermines the existing mandate, opening the door for the automotive industry to sue and win the case prohibiting enforcement of the ZEV mandate. |
| 2001 | Energy Conversion Devices (Ovonic) Battery Company and Texaco Ovonic Battery Systems (owned by Chevron) file a patent infringement lawsuit against against Matsushita, Toyota, and PEVE effectively stopping use of the large capacity NiMH batteries in 100% Electric Vehicles and settle a “behind closed doors deal” with a court gag order in 2004. |
| 2003 | Alan Lloyd is also the Chairman of the California Fuel Cell Partnership. This Partnership established and represents an on-going collaboration between Big Oil, automakers, fuel cell companies, other collaborative partners, and government agencies to promote hydrogen technologies. |
| 2003 | Rick Wagoner becomes elected chairman of General Motors. |
| 2003 | Alan Lloyd Chairman of the California Air Resources Board (CARB) pushes for the end of the zero-emissions vehicles mandate (ZEV). |
| 2004 | Energy Conversion Devices (Ovonic) Battery Company and Chevron’s Texaco Ovonic Battery Systems settle the lawsuit with Matsushita, Toyota and PEVE stopping production of the large capacity NiMH batteries and killing all electric cars. |
| 2004 | All electric cars in California are destroyed and shredded by the automotive companies that made them. Only approximately 300 Toyota RAV4-EV’s survive because Toyota sold them to private individuals. After 12 years, they are still running strong, some of the having over 150,000 miles without any issues related to the NiMH batteries. |
| 2004 | The Texaco Ovonic Battery Systems joint venture between Chevron and Energy Conversion Devices (Ovonic) Battery Company is renamed to Cobasys LLC. |
| 2004 | Cobasys owns, at this time, between 100 and 200 patents related to NiMH battery technology and approximately 15 patents critical for large capacity NiMH batteries. |
| 2008 | August, Mercedes Benz U.S. International Inc. (MBUSI), files a lawsuit (or two) against Cobasys LLC, accusing Chevron, Energy Conversion Devices (Ovonic) Battery Company and Cobasys LLC, of conspiring. Mercedes also alleges that Cobasys LLC hadn’t begun production on its $6M NiMH contract bringing Mercedes in jeopardy of not been able to produce their hybrid vehicles in accordance with its scheduled launch date. |
| 2009 | July, Energy Conversion Devices (Ovonic) Battery Company and Chevron have sold their respective membership interests in Cobasys LLC to SB LiMotive, an electric vehicle battery joint venture between South Korea’s Samsung SDI and Germany’s Robert Bosch. The transaction coincides with settlement of a pending lawsuit against Cobasys LLC in August 2008 by Mercedes Benz U.S. International Inc (MBUSI). Energy Conversion Devices (Ovonic) Battery Company paid MBUSI $1.1 million from the $1.3 million in royalties distributed to it by Cobasys LLC. No other details are disclosed. |
So what happened to large capacity NiMH batteries?
Did Chevron (the corporation which reported $23.93 billion annual profit in 2008), sell intellectual property rights of the most powerful and reliable traction battery ever invented, because they could not pay $1.1 million and some penalties for the late delivery of the NiMH low capacity hybrid batteries to Mercedes?
What we know for sure is that prior to the sales, serious intellectual property ownership restructuring took place. It is recorded in:
ENERGY CONVERSION DEVICES, INC., FORM 10-Q, QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, For the quarterly period ended September 30, 2009, UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
Excerpt:
On July 13, 2009, Ovonic Battery Company, a 91.4%-owned subsidiary of the Company, and Chevron Technology Ventures LLC completed a sale of 100% of the membership interests in Cobasys to SB LiMotive Co. Ltd. for $1. In connection with the sale of Cobasys, the Amended and Restated Operating Agreement dated July 2, 2004 was terminated effective as of the transaction date. Termination of the Operating Agreement was effectuated by a Termination Agreement dated as of the transaction date. This transaction coincides with settlement of a pending lawsuit against Cobasys filed in August 2008 by Mercedes-Benz U.S. International, Inc. In connection with settling the lawsuit, OBC paid MBUSI $1.1 million from the $1.3 million in royalties distributed to it by Cobasys and entered into a mutual release with MBUSI of all Cobasys-related claims. In addition, Cobasys restructured its intellectual property licenses with the Company and OBC so that OBC has royalty-free, exclusive rights to the technology for defined non-transportation uses and Cobasys has royalty-free exclusive rights for defined transportation uses.
And:
Excerpt:
As described in the press release furnished as Exhibit 99.1, the transaction included a restructuring of the Technology Agreement so that OBC has royalty free, exclusive rights to the technology for defined non-transportation uses, and Cobasys has royalty free exclusive rights for defined transportation uses. Prior to the restructuring, Chevron Technology Ventures LLC (CTV) held the title to the core patents underlying the licenses and, the cost of patent maintenance was paid by Cobasys. As of the closing, the patents will be held in a patent trust with each Cobasys, ECD and OBC responsible for the costs of patent maintenance associated with the patents they originated. OBC and ECD, as the originators of most of the patents, are responsible for a majority of the patent maintenance costs for the trust patents. As part of the restructuring, Cobasys has an option until April 2010 to withdraw from its obligations under the patent trust by surrendering to OBC its exclusive license in the transportation field.
And:
EX-99.1 5 ex99p1_071309release.htm PRESS RELEASE OF JULY 13, 2009
Excerpt:
Energy Conversion Devices Announces Sale of Cobasys to SB LiMotive
Arbitration with Chevron Technology Ventures LLC and Litigation with
Mercedes Benz U.S. International Inc. are Settled
Rochester Hills, Mich., July 13, 2009 – Energy Conversion Devices, Inc. (NASDAQ: ENER) (ECD), a leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today announced that its subsidiary, Ovonic Battery Company, Inc. (OBC), and Chevron Technology Ventures LLC (CTV) have sold their respective membership interests in Cobasys LLC to SB LiMotive Co. Ltd. (SBL).
Cobasys designs, develops and manufactures integrated energy storage systems principally for hybrid electric vehicles. Certain elements of Cobasys’ nickel metal hydride technology rely on patents originated by OBC and ECD. SBL is a joint venture between Samsung SDI Co., Ltd. and Robert Bosch GmbH formed to develop, manufacture, and sell batteries for automotive applications.
Prior to the sale, Cobasys assigned to OBC and CTV the right to receive 20% and 80%, respectively, of future royalties payable to Cobasys by Panasonic EV Energy Co., Ltd. (PEVE) under a patent license agreement that provides for royalties through 2014. Royalties totaling approximately $6.5 million received by Cobasys since January 2008 under this license agreement were also distributed to OBC and CTV, with OBC receiving approximately $1.3 million. In addition, Cobasys restructured its intellectual property licenses with ECD and OBC so that OBC has royalty-free, exclusive rights to the technology for defined non-transportation uses and Cobasys has royalty-free exclusive rights for defined transportation uses.
The transaction coincides with settlement of a pending lawsuit against Cobasys filed in August 2008 by Mercedes Benz U.S. International, Inc. (MBUSI). In connection with settling the lawsuit, OBC paid MBUSI $1.1 million from the $1.3 million in royalties distributed to it by Cobasys and entered into a mutual release with MBUSI of all Cobasys-related claims.
In connection with these transactions, CTV and OBC and ECD settled and jointly dismissed their pending arbitration without any finding of financial liability. The parties entered into mutual releases and agreed to the terms of the Cobasys sale transaction.
The legal settlement agreement between parties in not available.
The explanation for “defined non-transportation” and “defined transportation” intellectual property is not available.
The answers from Cobasys’ corporate office and manufacturing facility are not available – nobody’s home.
One thing is certain. Chevron is still there and still rules.
A time of crisis is most invariably a time of opportunity if it can be taken advantage of. Hopefully Toyota will have the vision and foresight to take advantage of this opportunity. I don’t especially care for Toyotas as I have always favored Honda or Nissan over them. Toyota needs to remain a vital entity in the automotive line of business if for no other reason than the people who rely on them for their livelihoods.