China Rare Earth Alliance: Countering Japanese Enterprises' Patent Monopoly

Abstract Recently, seven NdFeB companies from the downstream of China's rare earths decided to break the Japanese rare earth patent barrier and join hands with Japanese companies to file a lawsuit. Sun Baoyu, chairman of Shenyang Zhongbeitong Magnetic Technology Co., Ltd., told 21st Century Economic Reporter that China's seven rare earth enterprises are composed...
Recently, seven NdFeB companies from China's rare earth downstream decided to break the Japanese rare earth patent barrier and join hands with Japanese companies to file a lawsuit. Sun Baoyu, chairman of Shenyang Zhongbeitong Magnetic Technology Co., Ltd., told 21st Century Business Herald that the alliance of seven rare earth enterprises in China will participate in a rare earth industry exhibition held in Japan on July 23, when it will be at the exhibition. Launched products and sought customers. If Japanese companies refused Chinese exports on the grounds of patent infringement, they were ready to respond.

Selling patents only to 8 Chinese companies

Hitachi Metals has applied for more than 600 patented technologies for NdFeB worldwide.

Among them, there are 149 patents authorized by 8 Chinese companies.

Magnetic materials are in the downstream of rare earths, and NdFeB materials are widely used in motors, wind power, automobiles and electroacoustics. The NdFeB material industry has long been firmly controlled by Japan’s Hitachi Metals with its patented technology. It only sells patents to eight Chinese companies and allows its products to be exported. In addition to the inability of Chinese companies to export products in China, The state of existence is also at stake.

The beginning of the event was August 17, 2012, Hitachi Metals and its sintered NdFeB magnet factory in Japan, Hitachi Metals North Carolina, applied to the US International Trade Commission (ITC) to include four NdFeBs in China. 29 companies around the world initiated “337 investigations”. The four companies are Yantai Zhenghai Magnetic Materials Co., Ltd. (Zhenghai Magnetic Materials), Ningbo Jinji Nippon Boron Strong Magnetic Materials Co., Ltd. (Ningbo Jinji), Anhui Dadi Xiong New Materials Co., Ltd. (Anhui Dadi Xiong) and Hong Kong Chuangke Industrial Co., Ltd. (Hong Kong Chuangke).

Since then, Zhenghai Magnetic Materials, Ningbo Jinji and Anhui Dadi Bear have reached a settlement with Hitachi Metals through response. In addition, the company has purchased Japanese patents such as Zhongke Sanhuan, Ningbo Yunsheng, Beijing Jingshi, Yinshenjinke and Antai Technology. At present, Hitachi Metals has applied for more than 600 patents of NdFeB in the world. Among them, there are 149 (with 4 expired) US patents authorized by China's eight NdFeB enterprises, and these 8 companies also constitute the first echelon in the industry.

Since then, the second echelon companies in the industry have begun to discuss the formation of alliance counterattacks. In August 2012, the “Rare Earth Permanent Magnet Industry Technology Innovation Strategic Alliance” was established. The member units include Shenyang Zhongbeitong Magnetic Technology Co., Ltd., Ningbo Tongchuang, Ningbo Permanent Magnetic Industry Co., Ltd., Ningbo Ketian Magnetic Industry Co., Ltd., Hangzhou. Seven companies, such as Permanent Magnet Group Co., Ltd., Ningbo Huahui Magnetic Industry Co., Ltd. and Guangdong Jiangmen Magnetic Source New Materials Co., Ltd., aim to jointly invest, research and develop, and jointly develop and jointly deal with intellectual property rights.

"337 investigation" period impact

If this patent issue is not resolved, future products will be exported to the United States, and patent problems of traceable materials may also be traced.

Sun Baoyu believes that the “337 Investigation” has clearly stated that the NdFeB patents in the US are valid from July 8, 1999 to July 8, 2014, so after July 8, other Chinese companies should sell. No longer affected by the “337 investigation”,

"We respect intellectual property very much, because we also have our own technology at present, and we will protect our intellectual property rights in the future, but since the validity period is until July 8, then we should abide by the regulations." Sun Baoyu told reporters.

Sun Baoyu stressed that the reason why this patent problem must be solved now is that the future manufacturing market of NdFeB will be in China, and the use of NdFeB in China has reached 70,000-80,000 tons per year, far exceeding The foreign use amount is 20,000-30,000 tons. If the patent problem is not solved, the future use of NdFeB materials for export to the United States may also be traced to the patent of the material, so that they can not only export the products abroad. Sales in the country will be affected.

In addition, Sun Baoyu told reporters that China's NdFeB products are exported to foreign countries, which has a huge price advantage compared with foreign products. Due to the different products, the prices of some products are slightly lower than those of foreign countries, and some products cost only half of foreign countries. He also stressed that because Chinese companies have already established R&D organizations, the quality of their products is similar to that of foreign countries. According to the analysis of Guohai Securities, the gross profit of domestic NdFeB enterprises' overseas business is higher than the domestic business gross profit by more than 10%.

The reporter was informed that there are no other associations and organizations that have practical support for the “Technical Innovation Strategic Alliance of Rare Earth Permanent Magnet Industry”.

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