MAGNETICS 2023

SINTERED Nd-Fe-B PATENTS:

TACKLING RISKS IN THE PATENT SOUP

SINTERED Nd-Fe-B MAGNETS PATENT

ANALYSIS & AUDIT

MAGPAT CONSULTING, a Limited Liability Partnership February, 2023

11 Intention
Who of our
we are work
& Experience

… is to provide a Patent-Infringement-Risks-Free solution for:

✓ Magnet Manufacturers
✓ Magnet Users (TIER I, II, OEM’s)
✓ end-Users (OEM’s)

WITH THE NEED TO DIVERSIFY RE-SOURCES, THE PATENT TOPICS ARE „HOTTEST IN TEN YEARS“

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

 12 Patent
Who welandscape
are & Experience

>200 >200
ROW

>1000

>400
>200

>10

[Values are not absolute & are based on:

Our database & classification]

Global patent distribution map Vital global market segments

GLOBALIZED MARKETS REQUIRE A GLOBAL APPROACH

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

13 Patent
Who welandscape
are & Experience

Only HIGHLY relevant, granted “ FIRST“ PATENTS are counted:

Patent owners by origin (Excluding CN)

HRE-‘free‘ >60 patents Expiration >2039

GBD >250 patents Expiration >2039

POWDER & CONSOLIDATION >190 patents Expiration >2030

ALLOY PREPARATION >40 patents Expiration >2030 Japan

> 97%
COMPOSITION >130 patents Expiration >2030

RECYCLING >60 patents Expiration >2039

and beyond...

1999 2003 2007 2011 2015 2019 2022 2024 … 2034

[Values are not absolute & are based on:

Our database & classification]

A JP’s PATENT “WALL” SURROUNDS THE WHOLE MANUFACTURING PROCESS

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

14 Political
Who we (macroeconomic)
are & Experience entanglement of RE’s and patents

Deng Xiaoping (y.1992): “the Middle East has oil, China has rare earths”.
▪ Started in past decade: Battle for domination in Green technologies
▪ y. 2011: Battle with Japan over the islands
▪ y.2018: Battle with US over the import Quotas
▪ Just started: Battle for the downstream Automotive business

➢ Battle for the patented technologies: are JP patent owners cornered by the global demand and (H)RE-scarcity?
➢ Implications of the recent Ningbo court ruling? (Hitachi appeald to supreme court – no final decision yet)
➢ Why would customers pay for a license, if patents can be avoided for the magnets required by the market?

WHAT WILL THE FUTURE BRING?

▪ Free license for all players?
▪ License to a limited number of privileged companies (against the benefit of the progress and customers)?
▪ World-wide license or regional limitations?
▪ Only Hitachi-license or multi-licensing?
▪ OUR SOLUTION: FREE FROM PATENT (INFRINGMENT) RISKS & LIMITATIONS

IF RARE EARTH’s ARE CN’s WEAPON, THEN PATENTS ARE JP’s COUNTER-STRIKE

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

15 Key patented
Who we are & technologies
Experience for green transition
Cost, cost, cost
• Partial substitution with cheaper LRE’s and HRE’s, HRE-”free”, TM’s
• Optimized Stripcasting, Hydrogen Decrepitation, JET-milling, etc…
• Cost-effective Surface protection

Optimized for high-speed and high-Temperature

• Optimized stripcasting, Hydrogen Decrepitation, JET-milling, etc…
• GBD
• Variable flux magnets
• Smart magnet designs (reduced permeance, increased reluctance torque)

Optimized for low-speed and low-Temperature, exposed to sea water

• HRE-”free”
• Optimized stripcasting, Hydrogen Decrepitation, JET-milling
• Smart magnet designs (reduced permeance)
• Surface protection

Optimized for small(er) size, cost

• GBD, Partial substitution with cheaper LRE’s and HRE’s, HRE-”free”, TM’s
• Optimized stripcasting, Hydrogen Decrepitation, JET-milling, etc…
• Smart magnet designs (reduced permeance)
• Surface protection / Cost-effective surface protection

SMALLER, STRONGER, CHEAPER MAGNETS. LONG-TERM SUSTAINABILITY

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

16 Risks and
Who Liabilities
we are for magnet makers
& Experience

ORIGINAL LICENSE & CROSS-LICENSING EXCLUSIVE LICENSE EIGHT CHINESE HITACHI LICENSEE’s

NO WORRIES SELL WORLDWIDE SELL OUTSIDE OF JAPAN

TECHNOLOGY LEADERS

BENCHMARK TECHNOLOGIES ARE NOT

A PART OF THE “HITACHI LICENSE”

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

17 Risks and
Who Liabilities
we are for magnet makers (non-classical magnets)
& Experience

HITACHI LICENSE OWNERS Non-licensed producers

200+ MANUFACTURERS NEWCOMERS

• IP right enforcement by various patent owners

• Loss of customers & good-name
RISKS

• Bankrupcy in case of law-suits

• Patent owners, apart from Hitachi own an increasing amount of important patents
• Not all the relevant, Worldwide patents are analyzed
• Technological challenges to reduce cost or improve performance often overlap with patent claims
• Several companies own patents – do they actually reduce the Infringment risks or liability?
LIABILITIES

• Indemnification of customers
• Responsible & open comunication with magnet users
• Limitations of the Hitachi license should be openly addressed
• A thorough patent analysis (followed by a third-party patent audit?)

A COMPLETE PATNET LANDSCAPE ANALYSIS IS THE BEST SOLUTION

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

18 Risks and
Who Liabilities
we are for magnet users
& Experience

• Risks depend on the type of technology that is required

• Cost pressures, RE-sustainability, Requirements => benchmark technologies
RISKS

• Incomplete knowledge of the patent landscape and technical implications of patent claims
• Actual value of Indemnity agreements (with manufacturers)
• Actual value of Bank guarantees (with manufacturers)
• Long alternative source validation periods (in case of Infringement)

• Deliver products with ZERO RISK to it’s customers (FULL LIABILITY)

LIABILITIES

• Pay for line stops, law-suit expenses, court related fees, long legal process, loss of good name
• US: Buyer is liable to take all necessary actions to prevent procurement of Infringing products
• Business CASE: BILLIONS of USD at stake

MAGNET UESR’S RISKS & LIABILITIES EXCEED MAGNET MAKERS BUSINESS VOLUME BY MAGNITUTES OF ORDER

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

19 Key risk
Who wemitigation strategies for magnet-buying companies
are & Experience

Cost x (potential) Risk Cost

Buy non-licensed, non-patent-analysed magnets

Buy from a non-licensed manufacturer, who owns a patent (or several patents)

Buy from Second source

Buy from a magnet-processing company
(with licensed magnet origin)
Buy non-classical magnets from a
Licensed manufacturer
Buy from Hitachi /
JP patent owners
Dual-sourcing

Buy Hitachi - licensed

THIRD-PARTY WW-PATENT ANALYSIS + AUDIT magnets (classical)

Risk mitigation strength

BEST SOLUTION IS A THIRD-PARTY AUDIT OF THE MANUFACTURING PROCESS

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

1
10 Our service
Who we arefor s. NFB magnets makers and buyers
& Experience

Patent owners by origin

(Excluding CN)

▪ DETAILED ANALYSIS OF THE WORLDWIDE PATNET LANDSCAPE

▪ TECHNICAL EXAMINATION OF ALL RELEVANT PATENTS

▪ LEGAL EXAMINATION OF ALL RELEVANT JAPANESE PATENTS
Japan
> 97% ▪ ON-SITE PATENT AUDIT (technology, WW-patents)
▪ CLIENT CONSULTATION

▪ FTO, JP PATENT ATTORNEY OPINION (JAPANESE PATENTS)

▪ US, EU PATENT ATTORNEY OPINION BY DEMAND

of which >99% are patented in JP

INFRINGMENT RISKS AVOIDANCE: A HOLISTIC APPROACH, WITH FOCUS ON JP PATENTS

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

1
11 Wrapwe
Who upare & Experience

It is possible to manufacture magnets in y.2023 ✓ Through deep understanding of the

and beyond without violating the IP-rights. whole manufacturing process
How ?
➢ The benchmark grades and technologies ✓ Meticulous patent analysis
included. ✓ Technical + Legal expertise

Best RISK MITIGATION strategy:

Third party, world wide patent analysis & audit of:

✓ Your complete manufacturing process
✓ Your supplier’s manufacturing process

MagPat Consulting: “With us, you take a walk on the safe side”
MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023
1 Our CLIENTS
Who we are & Experience

Magnet manufacturers

world-wide clients: CN, EU, NAFTA, Africa TIER I and TIER II magnet users

WE HELP YOU SECURE YOUR BUSINESS GROWTH

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

1 About
Who weusare & Experience

Shuichiro Kuroiwa, BSc David Sojer, PhD

• Registered Japanese Patent Attorney (No.
16496)
• Over fifteen years of experience in patent
claim analysis including prosecution, licensing,
claim construction, etc.
• Field of technology: automotive, chemical,
consumer electronics, Nd-Fe-B magnets
• Bachelor of chemical engineering, Univ. of
Tokyo (Japan)
• Five years in Patent research and analysis of
sintered Nd-Fe-B magnets
• Ten years of experience in manufacturing of
magnets (R&D&T)
• Four years in corporate procurement of
magnets (Tier 1)
• Four years as magnet expert in E-mobility (Tier1)
• PhD in nano-material science, specializing in
Nd-Fe-B magnets, Josef Stefan Institute
(EU, Slovenia)

MAGPAT CONSULTING, LLP MAGNETICS, 2023 February, 2023

1 Who we are & Experience

Thank you!

MagPat Consulting
E-mail: david.sojer@magpatco.com
Tel: +386 40 323 659
Web: www.magpatco.com