Nippon Steel. is seeking an injunction in Tokyo District Court against Toyota to prevent the automaker from manufacturing and selling electric and hybrid vehicles that use a type of steel critical for the performance of motors.
The Japanese steelmaker is alleging an infringement of its patent relating to electrical steel sheets, seeking damages of around 20 billion yen ($177 million), according to a statement Thursday.
Electrical steel sheets are a type of high-grade steel with enhanced magnetic properties that help to limit energy loss. They are widely used as “iron cores” for electric generators in power plants, electrical products, cars and even vibration motors in mobile phones.
Tatsuo Yoshida, a Bloomberg Intelligence analyst, said it’s extremely unusual for a domestic steel supplier to sue an automaker. Electrical steel sheets are a critical part of motors that have a significant impact on performance and efficiency, he said. “I have never heard of anything like this.”
Nippon Steel also Thursday said it’s taking similar action against China’s Baoshan Iron & Steel, seeking compensatory damages of around 20 billion yen.
“Nippon Steel conducted discussions with each of Baosteel and Toyota based on its belief that its patent relating to non-oriented electrical steel sheets, which are indispensable materials for automobile electrification, has been infringed,” the Tokyo-based company said.
“However, Nippon Steel was unable to reach a resolution of the matter. Nippon Steel is taking these legal actions to protect its intellectual property rights on the alleged products.”
A spokesperson for Toyota said the automaker had confirmed in an earlier contract the patents were not infringed, adding it was “very regrettable that we are being sued.”
A representative from Baoshan Iron & Steel was not immediately able to comment.