BALTIMORE—Paice, a pioneer in the development of hybrid vehicle technology, has filed a complaint against the Volkswagen Group with the U.S. International Trade Commission (ITC). The complaint alleges patent infringement by VW, Audi and Porsche and asks the ITC to issue an exclusion order that would prohibit the companies from importing certain hybrid vehicles, including the VW Jetta Hybrid, Audi A3 e-tron Hybrid, Audi Q5 Hybrid, Porsche Cayenne S E-Hybrid, and Porsche Panamera S E-Hybrid.
Read the complaint here.
Paice currently has global licensing agreements with Toyota, Hyundai and Kia, who collectively account for 70% of all hybrid vehicles sold in the U.S. this year. Paice also previously licensed portions of its technology to Ford.
“When foreign companies like Volkswagen take American technology, they must be held accountable,” said Robert Oswald, Paice chief executive officer and an automotive executive with 50+ years experience. “Paice had a long-term relationship with VW and shared its hybrid vehicle technology in good faith with the expectation that VW would do the right thing and lawfully license Paice’s patent rights. Years later, VW began introducing hybrids that used our technology without a license.”
Paice’s Collaboration with VW
From 2001 to 2004, Paice engineers spent over 350 days in Germany sharing its patented hybrid technology with Volkswagen. Paice performed extensive modeling and provided VW all of Paice’s computer modeling and control algorithms. But after learning everything it needed from Paice, VW abruptly ended the collaboration and never licensed Paice’s technology.
VW ultimately chose to focus on developing its “clean diesel” vehicles instead of investing adequately in hybrids. However, these diesel vehicles were unable to meet U.S. emissions regulations, and VW installed defeat devices to mask the illegal levels of harmful emissions. In the end, VW had to cheat in its efforts to achieve the same results that Paice’s technology delivered.
Now that the VW Group has been forced to stop selling its current diesel vehicle models in the U.S., it has committed to focusing a large part of its future development on hybrid vehicles for the VW, Audi and Porsche brands. Given its refusal to license Paice’s technology, the company believes VW, Audi & Porsche must be excluded from importing hybrid vehicles into the U.S.
A Leader in the Hybrid Industry
Paice is the creation of inventor Dr. Alex Severinsky, who founded the company in 1992 with the support of the University of Maryland incubator program. Led by an innovative and experienced team of automotive veterans, Paice made its mark in the hybrid industry by discovering new ways to maximize fuel efficiency and reduce harmful emissions without sacrificing driving performance.
Paice has been awarded 29 U.S. and foreign patents. An independent analysis of 58,000 hybrid vehicle patents found that Paice owns the most dominant hybrid vehicle patent in the world due to its fundamental importance in the development of hybrid vehicles. The study also found that Paice owns four of the Top 10 most influential hybrid vehicle patents in the world – more than Toyota, Ford and Honda combined.
The Abell Foundation, a Baltimore-based charitable organization dedicated to fighting urban poverty and promoting social objectives by investing in progressive local start-up companies, is a co-owner of the Paice patents and a co-complainant in the ITC filing. Since 1999, Abell has invested millions of dollars to support Paice’s efforts to develop and promote its innovative hybrid technology.
A History of Successful Patent Infringement Litigation
Paice has been successful in previous patent infringement lawsuits against Toyota, Hyundai and Kia. In October 2015, a Baltimore jury found Hyundai and Kia liable for patent infringement and awarded Paice $28.9 million. The parties later reached a confidential settlement that included a global license for Paice’s patented technology.
“It’s unfortunate that small companies like Paice are often forced to pursue legal action against major automakers,” Oswald said. “Despite the widespread recognition of Alex Severinsky’s inventions, large automotive companies with internal development staffs often refuse to acknowledge their use of technology not invented in-house.”
Paice is currently involved in a patent infringement lawsuit against Ford, which signed a limited licensing agreement in 2010 that applied only to Paice’s first patent. When the companies were unable to reach a licensing agreement on subsequent patents, Paice was forced to pursue legal action in 2014. That lawsuit has been stayed pending the resolution of inter partes review proceedings before the U.S. Patent Office.