Patent War Situation

- Oct 07, 2020-

    Solaria's lawsuit against Canadian Solar for infringement has not yet been resolved, and Zhonghuan's heavy punch is already on the way.

    On September 29, Zhonghuan issued an announcement stating that the company’s Singapore subsidiary Maxeon was patent infringed by Canadian SolarJapan KK, Canadian Solar Japan’s subsidiary of Canadian Solar. The patent number is JP6642841B2 ("shingled solar cell modules"). In addition, it filed a patent infringement lawsuit against Canadian Solar Japan KK in the Tokyo District Court of Japan to assert its rights.

    This is the second time Canadian Solar has recently faced a patent lawsuit related to shingled components.

    According to foreign media reports, as early as March 31, Solaria filed a patent infringement claim against Canadian Solar for US Patent No. 10,522,707, which involved the process of separating photovoltaic strips from solar cells and using them in shingled modules.

    On June 3, Solaria revised the petition and added a second patent. The patent number is 10,651,333 and is related to the same technical process.

    A week ago, Solaria filed a lawsuit with ITC and added a third patent-the patent number 10,763,388 relates to shingled module technology, which has multiple battery strings formed by overlapping photovoltaic strips. Solaria requested ITC to issue an exclusion order prohibiting Canadian Solar from selling products in the United States that is claimed to infringe the company's patents.

    On September 25, Canadian Solar stated that since April this year, Solaria has been suing the company for infringement. Canadian Solar now filed a counterclaim in the case, requesting the court to declare the following points: (1) None of the products involved in this case infringed Solaria's patent; (2) Solaria refused to provide key evidence to the US Patent Office when applying for a patent; 3) Unless there are other reasons, Solaria's previous requirements are invalid and unenforceable.

    It can be said that a wave of unrest has occurred again.

    Why is shingled technology the hardest hit area of patent lawsuits?

    According to statistics from the New Era Securities Research Institute, shingled technology has now entered mass production and currently accounts for 5% of exported components. At the Shanghai SNEC exhibition in 2019, more than 10 companies exhibited shingled components. Shingled shingling is also the most certain technology for the layout of component companies after half a piece. At the end of 2018, the shingled module production capacity was around 3GW, and the current expansion is expected to be around 10GW, and the planned production capacity will exceed 20GW.

    However, in the short term, patents may be an important bottleneck restricting the development of shingles. The main patents are in the hands of foreign-funded enterprises. The expiration of shingle patents reported in the market refers to the expiration of Shin-Etsu’s shingle design patents. Process patents, such as battery cell layout, appearance, connection, and other aspects have not expired. The main holder of this patent is Sunpower, and Solaria also has some patents.

    Maxeon was spun off from SunPower. In other words, the two major patent holders are suing Canadian Solar

    In 2019, SunPower split its solar cell module business to Maxeon, and Zhonghuan subsequently subscribed for 28.848% of its shares for US$298 million and became its second-largest shareholder. This incident even caused an uproar. A snowball netizen once accused Zhonghuan that this action would cause the loss of state-owned assets, and Zhonghuan stated in the subsequent announcement that one of the main purposes of the acquisition was to value SunPower's various items. patent.

    Today, Canadian Shingles have been sued by Maxeon and Solaria at the same time. Will it affect the advancement of Canadian Shingles?

    The original text of the Central Announcement is as follows:

    Tianjin Zhonghuan Semiconductor Co., Ltd. (hereinafter referred to as the "Company") joint venture company Maxeon SolarTechnologies, Ltd. (Nasdaq: MAXN) (hereinafter referred to as "Maxeon") is headquartered in Singapore and is responsible for the design, manufacture, and sales of solar cells and modules. Its business covers more than 100 countries in Africa, Asia, Oceania, Europe, and the Americas. Its products cover the global photovoltaic roof and power station market. It has more than 900 patents and two first-class solar module product lines. Among them, Total Solar International SAS (Chinese name: Total Solar International Corporation) holds 39.2034% as the largest shareholder. The company’s wholly-owned subsidiary ZHONGHUAN SINGAPORE INVESTMENT AND DEVELOPMENT PTE. LTD. (Chinese name: Zhonghuan Singapore Investment Development Pte. Ltd. The company's shareholding ratio is 28.8480%, making it the second-largest shareholder.

    Recently, the company received a notice from Maxeon that Canadian SolarJapan KK, a wholly-owned subsidiary of Canadian Solar Inc., has used Maxon's Japanese patent number JP6642841B2 ("shingled solar cell module") without permission This patent is the patented and basic shingled battery module technology used in the manufacture of SunPower® Performance modules. Maxeon plans to take legal measures to protect its intellectual property rights and filed a patent infringement lawsuit against Canadian Solar Japan K.K in the Tokyo District Court of Japan to assert its rights.

    Shingled solar cell modules divide the entire solar cell into smaller solar cell strips and then overlap and connect the solar cell strips to obtain higher power and efficiency modules, and have stronger reliability and process than traditional modules The proven durability is superior to traditional components in terms of efficiency, power, reliability, and aesthetics. This technological innovation is protected by more than 150 international patents and patent applications, including battery and component design as well as key manufacturing equipment and processes. Maxeon has installed more than 3GW of shingled modules in more than 60 countries and is the most installed shingled module technology in the industry. The company's joint venture with Maxeon, Huansheng Photovoltaic (Jiangsu) Co., Ltd. (the company holds 77% of its shares), produces the shingled modules. It is the only manufacturer in China that has obtained its legal intellectual property license and is committed to having a globally differentiated competitive advantage. The manufacturing of high-efficiency shingled solar modules.

    Respect for intellectual property is essential to the orderly and sustainable development of the solar energy industry. As a publicly listed company and an innovative company, the company adheres to the concept of "respecting knowledge, advocating innovation, and honesty and abiding by the law" and always firmly believes in respect for intellectual property.

    Intellectual property rights are to maintain market order; as a shareholder of the joint venture Maxeon, the company fully supports Maxeon’s above-mentioned rights protection activities. At the same time, when similar intellectual property infringements involve damage to Maxon's legal intellectual property licensing authorization, it will fully support Maxeon. Adopt including but not limited to legal means to protect its legal rights and interests.

    The company will perform its information disclosure obligations in a timely manner in accordance with the "Securities Law of the People's Republic of China", "Administrative Measures for Information Disclosure of Listed Companies" and other relevant laws, regulations, regulatory documents and relevant regulations of the Shenzhen Stock Exchange. Investors pay attention to investment risks.

Special announcement

Board of Directors of Tianjin Zhonghuan Semiconductor Co., Ltd.

September 29, 2020

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