Patent Wars: How CATL's Legal Offensives Secure EV Dominance

The global electric vehicle (EV) battery market is no longer just a race for technological superiority—it’s a high-stakes battle for intellectual property (IP) dominance. At the epicenter of this clash is CATL, the world’s largest EV battery manufacturer, whose aggressive patent enforcement against rivals like CALB underscores a strategic shift: IP is now the ultimate moat in a sector where market share and innovation are zero-sum games. For investors, the implications are clear: CATL’s legal offensives are not just defensive maneuvers but powerful catalysts for sustained growth and value creation.

The Litigation Landscape: A Strategic Showcase of IP Power

CATL’s patent war with CALB, which has escalated dramatically in 2025, is emblematic of the broader trend in China’s EV industry. As of May 2025, CATL has filed seven patent infringement lawsuits against CALB, seeking over ¥700 million (US$95.6 million) in damages. The most recent case, filed in the Hangzhou Intermediate Court, targets a key battery component—the “top cap subassembly”—under patent No. 202210514746. CATL’s demand for ¥90 million in damages reflects its willingness to weaponize its IP portfolio, which includes over 20,000 active patents, to block competitors.

CALB, meanwhile, has shifted from defendant to aggressor, filing its first-ever counterclaim in October 求1000字的中文回答 2024 seeking ¥1.007 billion (US$136 million) for alleged infringements of its own patents. Yet this counteroffensive has stumbled: two of CALB’s patents were invalidated by China’s National Intellectual Property Administration (CNIPA), highlighting the risks of overreliance on weaker IP. The outcome? A lopsided battlefield where CATL’s deep patent trenches outmaneuver CALB’s attempts to challenge its dominance.

Why IP Is the Ultimate Weapon in This Race

The CATL-CALB feud is not merely legal theater—it’s a masterclass in how IP can be deployed to cement market leadership. Consider the stakes:
1. Market Share as a Moat: CATL commands 36.8% of the global EV battery market, nearly double its nearest competitor. Its IP portfolio acts as a barrier to entry, deterring rivals from replicating its innovations.
2. Patent-Driven Profitability: By enforcing its IP, CATL can extract licensing fees, block competitors’ products, and even disrupt IPO plans of smaller players—a tactic that has foiled 17 out of 33 EV-related IPOs since 2019 due to unresolved IP disputes.
3. Global Reach, Local Leverage: While CALB’s counterclaims have international flair (e.g., targeting Tesla affiliates), CATL’s victories in Chinese courts—where damages awards are rising sharply—are more impactful. Chinese courts have increasingly sided with patent holders, a trend that rewards firms like CATL with both financial penalties and market share gains.

Risks? Yes. But the Reward-to-Risk Ratio Favors CATL

Critics point to risks: the Supreme People’s Court overturned two of CATL’s patents in 2023, and litigation outcomes are inherently uncertain. However, these setbacks are outweighed by CATL’s structural advantages:
- Portfolio Depth: With 20,000+ patents, losing a few is a tolerable cost of doing business.
- Ecosystem Partnerships: CATL’s supply deals with global automakers (e.g., Tesla, BMW) insulate it from short-term disruptions.
- Regulatory Favor: China’s push to become the EV superpower aligns with CATL’s IP-driven growth, as the state prioritizes firms that control critical tech.

The Investment Case: Litigation as a Catalyst, Not a Hindrance

For investors, the CATL-CALB saga is a buying opportunity masked as risk. Here’s why:
1. Barrier to Entry, Not Threat: Every lawsuit CATL wins raises the cost of competition. Smaller rivals like CALB, which must divert resources to legal battles, struggle to scale.
2. Premium Valuation: CATL’s IP arsenal justifies a valuation premium. Its ¥700 million in cumulative claims are trivial against its ¥1.2 trillion market cap, but symbolically reinforce its dominance.
3. Global Expansion Safeguards: As CATL expands into Europe and the U.S., its IP portfolio will deter copycats there too.

Final Call: Bet on the IP Champion

The EV battery market is at a crossroads: either consolidate around IP titans like CATL or fragment into a low-margin, patent-litigation-riddled free-for-all. The former path is inevitable. Investors ignoring CATL’s IP might as well ignore the very forces driving EV adoption—technology control and scale.

While near-term volatility from litigation is possible, the long-term trajectory is clear. CATL’s legal offensives are not distractions but strategic moves to lock in decades of growth. For investors, the message is simple: own the IP, own the future.