The licensing of Standard Essential Patents (SEPs) in battery technology has become a critical issue as the industry evolves toward standardized fast-charging protocols and other interoperable systems. Fair, Reasonable, and Non-Discriminatory (FRAND) commitments are intended to ensure that patented technologies essential to industry standards are accessible to all market participants without unfair restrictions. However, disputes frequently arise between SEP holders and implementers over licensing terms, royalty rates, and compliance with FRAND principles. These conflicts are particularly pronounced in battery technologies where standardization is accelerating to support electric vehicles, grid storage, and consumer electronics.
Standardization in battery technology covers areas such as fast-charging protocols (e.g., CCS, CHAdeMO, and GB/T), communication interfaces, and safety specifications. These standards enable interoperability, reduce fragmentation, and lower costs for manufacturers and consumers. However, when a company’s patents are included in a standard, they gain significant leverage, as implementers must license these patents to comply with the standard. This dynamic has led to contentious negotiations, litigation, and regulatory scrutiny over whether SEP holders are adhering to FRAND obligations.
Key SEP holders in battery-related standards include major automotive manufacturers, battery producers, and electronics firms. Companies like Tesla, Panasonic, LG Energy Solution, and Siemens hold patents covering fast-charging technologies, battery management systems, and thermal regulation methods. These entities often participate in standard-setting organizations (SSOs) such as the International Electrotechnical Commission (IEC), the Society of Automotive Engineers (SAE), and the CharIN association, which governs the Combined Charging System (CCS). By contributing their patented technologies to these standards, they commit to licensing them under FRAND terms.
Implementers, including smaller battery manufacturers and automotive startups, frequently face challenges in negotiating FRAND licenses. One major issue is the lack of transparency in royalty rates before a technology is adopted into a standard. Some implementers argue that SEP holders exploit their position by demanding excessive royalties or bundling non-essential patents into licensing agreements. Others claim that delayed licensing discussions force them to risk infringement lawsuits after investing heavily in production.
A recurring dispute involves the calculation of royalty rates. SEP holders often prefer a percentage of the end product’s value, such as the entire electric vehicle, while implementers argue that royalties should be based on the value of the battery or the specific component using the patented technology. Courts and regulators in different jurisdictions have taken varying approaches to this issue. For example, some U.S. courts have favored the “smallest saleable patent-practicing unit” principle, whereas European courts have been more open to considering the overall product value.
Another contentious area is portfolio licensing, where SEP holders offer licenses covering large groups of patents rather than individual technologies. Implementers sometimes allege that this practice forces them to pay for non-essential patents or outdated technologies. In response, some SSOs have introduced policies requiring greater specificity in patent disclosures to prevent overreach. However, enforcement remains inconsistent across regions.
Litigation over FRAND disputes is common, with cases frequently filed in jurisdictions known for their patent enforcement systems, such as the U.S. District Court for the Eastern District of Texas, the German courts, and the UK High Court. Some SEP holders seek injunctions to block the sale of infringing products, while implementers counter by filing antitrust complaints or seeking declaratory judgments on FRAND terms. Regulatory bodies, including the European Commission and the U.S. Department of Justice, have issued guidelines to discourage the misuse of injunctions in FRAND disputes, but legal battles persist.
The global nature of the battery industry further complicates FRAND licensing. Differing legal interpretations across regions create uncertainty for both SEP holders and implementers. For instance, Chinese courts have become increasingly active in setting global FRAND rates for telecommunications patents, and similar trends could emerge in battery technology disputes. Some industry participants advocate for international arbitration mechanisms to streamline resolutions, but progress has been slow.
Emerging battery standards, such as those for wireless charging or solid-state batteries, may introduce new FRAND challenges. As these technologies mature, SSOs will need to balance innovation incentives with fair access to prevent monopolistic behaviors. Some experts suggest that clearer ex-ante licensing disclosures—where SEP holders declare maximum royalty rates before standard adoption—could reduce disputes. However, SSOs have been cautious in mandating such measures due to concerns over discouraging participation in standardization efforts.
The role of patent pools in battery technology is another evolving area. Patent pools aggregate SEPs from multiple holders into a single licensing package, simplifying negotiations for implementers. While pools exist for some charging standards, their adoption in broader battery technologies remains limited. Proponents argue that pools increase efficiency and reduce litigation risks, while critics warn they may facilitate collusion or suppress competition if not properly managed.
Looking ahead, the growing importance of battery standardization in achieving climate goals adds urgency to resolving FRAND disputes. Policymakers, industry groups, and courts must collaborate to establish clearer frameworks that balance the rights of innovators with the needs of implementers. Without such measures, protracted legal conflicts could slow the deployment of advanced battery technologies and hinder the transition to sustainable energy systems.
The FRAND licensing landscape for battery standards remains complex and highly contested. While standardization drives interoperability and market growth, disputes over fairness and transparency persist. SEP holders seek to monetize their innovations, while implementers demand accessible and predictable licensing terms. As battery technologies continue to evolve, the industry must address these challenges to ensure that standardization efforts benefit all stakeholders without stifling competition or innovation.