Nippon Steel sues Toyota, Baosteel for patent infringement

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A production line of Nippon Steel & Sumitomo Metal Corp.'s Kimitsu steel plant is pictured in Kimitsu, Chiba Prefecture, Japan, May 31, 2018. REUTERS/Kim Kyung-Hoon/File Photo

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TOKYO, Oct 15 (Reuters) - Japan's Nippon Steel Corp (5401.T) said on Thursday it had filed patent infringement lawsuits against Toyota Motor Corp (7203.T) and China's Baoshan Iron & Steel Co Ltd (Baosteel) (600019.SS) with a Tokyo district court.

Nippon Steel is seeking 20 billion yen ($176 million) in damages from each company, alleging the two firms have infringed on its patents on non-oriented magnetic steel sheets that are used in electric vehicles, it said in a statement.

Two of Japan's manufacturing giants, the country's biggest steelmaker and automaker, slugging it out in court is a rare occurrence and signifies the high stakes involved in materials production as the global low-carbon revolution takes hold.

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"Such expressions of dissatisfaction are unusual in Japan," Thanh Ha Pham, an analyst at Jefferies in Tokyo, said on Friday.

Toyota said in a statement to Reuters the suit was "very regrettable" and that it had found no patent infringement issues.

"Electrical steel sheets are indispensable materials for automobile electrification and are one of our key products aimed at helping decarbonisation for cars, electrical products and power plants" a Nippon Steel spokesperson said.

This is the first time Nippon Steel has filed a patent infringement lawsuit against Toyota, the spokesperson added. Nippon Steel is a longstanding steel supplier for Toyota and other Japanese automakers.

"We confirmed that there was no infringement of another company's patent before concluding a contract" with Baosteel to supply electromagnetic steel sheets, Toyota said.

Baosteel said it did not agree with Nippon's claims and it would "firmly" defend its rights and interests. read more

Nippon Steel, the world's fifth-biggest steelmaker by output, also filed a petition for a preliminary injunction prohibiting Toyota from manufacturing and selling motor-driven vehicles that use the electrical steel sheets allegedly violating its patents.

The company decided to take legal action after it could not reach a resolution through discussions with both companies, it said.

The steelmaker declined to give further details, including the names of the Toyota products and the size of their sales.

Nippon Steel shares rose 0.1% on Friday, while Toyota was up the same amount as the Nikkei 225 rose more than 1%. Baosteel was down 0.3%.

($1 = 113.4700 yen)

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Reporting by Ritsuko Ando, Ju-min Park, Maki Shiraki, Yuka Obayashi and Aaron Sheldrick in Tokyo; additional reporting by Min Zhang in Taiyuan; Editing by Mark Potter, Kirsten Donovan, Christian Schmollinger

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