Volkswagen Group Faces ITC Challenge over Hybrid Patents

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.

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.”

From 2001 to 2004, Paice engineers spent over 350 days in Germany sharing its patented hybrid technology with Volkswagen. According to Paice, it 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 emissions.

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.