Magnetics Business & Technology - Winter 2013 - (Page 6)

FEATURE ARTICLE Hitachi Metals, Ltd. - The Magnet Industry Newsmaker By Walter T. Benecki In 1983, NdFeB rare earth permanent magnets were invented independently by two teams, one headed by Dr. Masato Sagawa of Sumitomo Special Metals and the other by Dr. John Croat of General Motors (now Magnequench). In the late 1980s, the first legal issue regarding NdFeB magnets surfaced between Sumitomo and GM. The two companies settled their differences early, with Magnequench having the rights to bonded and hot pressed NdFeB, while Sumitomo obtained domain over the sintered version of the new magnet material. So here we are, 30 years after the invention of NdFeB and today, Hitachi Metals (the successor to Sumitomo Special Metals) continues to pursue patent and licensing issues related to sintered NdFeB magnets. And there is a lot at stake. Hitachi Metals, Ltd. Hits the Limelight In December, 2011 Hitachi Metals first made the following announcement: "Tokyo, Japan, December 21, 2011- Hitachi Metals, Ltd. has today announced plans to construct a new plant in the United States that will produce neodymium magnets designed for use in hybrid and electric vehicles. The facility will be located at Hitachi Metals North Carolina, Ltd., the company's magnet manufacturing base in the United States. The launch of this neodymium magnet production facility will bolster the ability of Hitachi Metals to satisfy the expanding demand projected for this type of magnet not only in the United States, but throughout the rest of North America and Europe as well." The above announcement was well received by many industry participants and magnet users because it represented the first domestic production of sintered NdFeB magnets since the US magnet industry, under intense competitive pressures from Chinese magnet producers, were forced to shut down production operations more than 10 years ago. Hitachi's new NdFeB magnet operation in North Carolina has now been in operation for about six months. Then, in August of 2012, the permanent magnet community was rocked with the following announcement: "Tokyo, Japan, August 20, 2012 -Hitachi Metals, Ltd. announced today that on August 17, 2012, it filed a formal complaint with the United States International Trade Commission (ITC) against 29 manufacturers and importers of sintered rare earth magnets and products containing sintered rare earth magnets. Hitachi Metals 6 Magnetics Business & Technology * Winter 2013 seeks exclusion orders from the ITC prohibiting the entry into the United States of unlicensed, infringing sintered rare earth magnets and products containing those magnets and cease and desist orders prohibiting certain activity within the United States." The Battle Begins In the August 20th announcement, Hitachi listed four issued US patents (Patent Nos. 6,461,565; 6,491,765; 6,527,874 and 6,537,385), which they considered key to their position. These patents were filed during the period March, 2001 to July, 2002 and have a lifespan of 20 years. At least three of these patents are "process patents" that detail a wide variety of process claims, which Hitachi argued were essential to the production of highperformance sintered NdFeB magnets. It is worth noting, however, that the '874 patent does have a composition of matter claim. In addition, Hitachi no longer referenced the "651 patent" (which expires in July 2014) under which their previous licensees were authorized to produce sintered NdFeB magnets. One assertion reportedly made by Hitachi's lawyers was that Hitachi could determine, by examining a finished magnet, whether it was manufactured in violation of the Hitachi patents. A number of technical magnet experts (with much more technical savvy than this writer) were skeptical of this claim, particularly as it related to the "process" patents. Shortly after the ITC filing, a number of the 29 manufacturers, distributors and users of NdFeB magnets quickly "settled" with Hitachi. The details of these settlement agreements are not available to the public, but many industry followers have speculated that some of the early settlements involved companies who did not have the financial capability to engage in the anticipated legal process. As the months wore on, the five Chinese companies who had originally been Hitachi licensees gradually agreed to new licensing agreements that permitted them to manufacture and sell NdFeB magnets under the newly cited Hitachi patents. As the traditional licensees began announcing their new agreements with Hitachi, the momentum clearly began to favor Hitachi. However, some of the "named companies" who did not settle were apparently willing to launch a legal challenge to the four patents cited in Hitachi's ITC complaint. Technical experts were lined up by both sides and a lengthy period of discovery and depositions began. It has been reported that two camps actually formed to challenge the four Hitachi patents, one group of

Table of Contents for the Digital Edition of Magnetics Business & Technology - Winter 2013

Editor's Choice
Hitachi Metals, Ltd. - The Magnet Industry Newsmaker
Research & Development
Magnets • Materials • Measurement
Application • Component Developments
Magnetics 2014 Conference Preview
Industry News
Marketplace/Advertising Index
Spontaneous Thoughts: NdFeB: The First 30 Years and the Next 30 Years

Magnetics Business & Technology - Winter 2013