Last November this blog reported a milestone for LG Chem, which launched its first US patent suit against an alleged Chinese infringer. The enforcement campaign, in which the Korean firm teamed with Japan’s Toray, centered on a Lithium-ion battery technology that plays a key role in the electric vehicle sector. Now, the company has enlisted patent fund Intellectual Discovery (ID) to carry out a battery technology licensing programme in China, which it hopes will result in it finding an exclusive licencee.

LG Chem is one of the big incumbent players (along with Panasonic) in the market for Lithium-ion vehicle batteries. The technology it wants to license is a safety-related feature it calls Safety Reinforced Separator (SRS). In October, it accused Chinese competitor Amperex Technology Ltd (ATL) of infringing three SRS-related patents while “flooding the US market with inexpensive, low-quality batteries” in both a district court lawsuit and an ITC complaint.

While LG has reached past deals with firms including Japan’s UBE Maxell, its new effort in China is focused on finding an exclusive licensee there. “We are aiming to find a good partner in China who can make use of this technology,” explains Kyunghwa Min, LG Chem vice president and head of IP. And what’s more, he says: “We can help our partner make use of this technology.” Min explains the door is open to any firm that wants to discuss a potential deal – including the company it is currently litigating with: “I have full intention to talk about whether ATL is interested."

Intellectual Discovery, South Korea’s sovereign patent fund, will lead the effort. “I believe it would be a win-win situation for the patent holder and potential licencees,” says Dongsuk Bae, who heads ID’s licensing division. Bae adds that LG Chem is open to discuss a range of licence terms apart from just exclusion of competitors. Like many large Korean corporates, LG Chem has not previously focused on licensing out technology. Min says the decision to engage ID came down to both the firm’s international experience and its ability to act as an intermediary: “We want someone who can help us find a partner in China, as well as someone who can help a partner understand our intentions and the benefits of a deal."

Min stresses that the company is not going to be taking an aggressive approach in China – LG Chem is mainly focused on making money from its operating business, not its patent portfolio. That may be the decisive factor in why the firm wants an exclusive Chinese partner. A local Chinese company with an exclusive deal, after all, would have every incentive and every right to go after any other infringers in the market. That is a path that LG Chem itself would clearly rather not tread. It has enough on its hands navigating the politically tricky but commercially vital auto supply chain in China.

For ID, the initiative will provide a chance to demonstrate its dealmaking bona fides in a neighbouring market that's absolutely crucial to domestic businesses. If this approach proves to be a winner, there are no doubt other major Korean industrials who could benefiit from it.