Nippon Steel Corp. said Thursday it has filed lawsuits against Toyota Motor Corp. and Chinese steel-maker Baoshan Iron & Steel Co. alleging infringement of a patent related to a key steel product for electric vehicles, in a rare legal battle between a Japanese steel-maker and one of its major customers.
The steel-maker said it is seeking damages of ¥20 billion ($176 million) from each company and has also asked the Tokyo District Court for an injunction prohibiting Toyota from manufacturing and selling in Japan electrified vehicles made with motors using nonoriented electrical steel sheets suspected of violating its patent.
Toyota sold over 500,000 hybrids and other types of electric motor-driven vehicles in Japan in 2020, when its global sales totaled 8.69 million vehicles.
Japan's largest steel-maker did not disclose the details of its injunction request, such as targeted brands or the number of vehicles it covers.
Nippon Steel said in a statement that it had discussed the matter with the two companies but failed to reach a resolution, leading it to take legal action to "protect its intellectual property rights."
The company claims the major Chinese steel-maker has violated its patent related to components and thickness necessary to produce the nonoriented electrical steel sheets.
It is quite rare in Japan for industry leaders engaged in mutual business transactions to be involved in a legal battle, and the first time for Nippon Steel to sue an automaker for patent infringement.
"Such matters should be discussed between material manufacturers, and we have learned of this lawsuit with great regret," Toyota said in a press release.
The automaker said it had confirmed there was no patent violation with the material manufacturer before signing a contract for the nonoriented electrical steel sheets with Baoshan while also receiving a written statement from the Chinese manufacturer regarding the same.
Nippon Steel and Toyota struggled in recent negotiations on steel product prices after the former proposed it might limit its supply to the Japanese automaker in the face of a surge in raw materials prices.
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