Nippon Steel Sues Japan Business Partner Toyota Over Patent

Tokyo-based Nippon Steel filed the lawsuit Thursday in Tokyo District Court, demanding compensation for damages totalling 20 billion yen ($177 million). Also named in the lawsuit is Baoshan Iron & Steel Co., or Baosteel, a Chinese steelmaker that produces and supplies the steel that allegedly violates the patent.

Toyota said it learned of the lawsuit “with great regret,” stressing it had checked on possible patent conflicts with Baosteel. Toyota sees Nippon Steel as an “important business partner,” supporting the Japanese auto industry for years, the maker of the Prius hybrid and Lexus luxury models said in a statement.

At the centre of the lawsuit is the Japanese patent for non-oriented electrical steel sheets, an indispensable component in electric motors used in EVs, power plants and mobile phones, according to Nippon Steel.

Nippon Steel officials said its prized technology is critical to its competitiveness, as the world shifts to “a carbon-neutral society” and innovations that reduce emissions are increasingly needed in steel manufacturing.

Nippon Steel is also demanding a court injunction against Toyota from manufacturing and selling vehicles in Japan EVs equipped with motors using the steel sheets suspected of violating its patent. That would include its hybrid models. Nippon Steel said there is no change to its plans to continue working with Toyota overall.

Baosteel did not immediately respond to a request for comment.