Paice LLC v. BMW Patent Litigation: An Overview

Discover more about this litigation case, the technology involved, and how Quality Insights by Patentcloud gives you instant access to key data and information for patent validity analysis.

August 25th, 2020 ‧ 11 min read

Table of contents

In November 2019, BMW was hit with a patent infringement lawsuit in relation to hybrid engines. In particular, BMW is accused of stealing the high-voltage technology intended to improve the efficiency of gasoline-electric hybrid powertrains.

Paice LLC and the nonprofit organization The Abell Foundation Inc. filed the suit in the U.S. District Court in Maryland. It’s worth mentioning that the Baltimore-based Abell Foundation is one of Paice LLC’s investors.

In this article, we will explore the case in more detail, and utilize Docket Navigator and Quality Insights to show you how we found this case in the first instance and to highlight how we can use Quality Insights to check patent validity in a matter of moments. 

How we found this case using Docket Navigator

Docket Navigator is a patent litigation intelligence platform that recently expanded to cover trademark, copyright, and antitrust litigation. Docket Navigator reports significant events from patent litigation cases. We used Docket Navigator to find the original Paice LLC v. BMW infringement suit.

Paice LLC and BMW case info. Source: Docket Navigator

Docket Navigator enabled us to take a look at Paice LLC’s case history, in particular, the outcomes of previous patent assertion cases and the case outcomes involving similar technologies.

Paice LLC’s track record. Source: Docket Navigator

It’s a pretty close call when it comes to the previous case outcomes.

Case outcomes relating to similar technologies. Source: Docket Navigator

Docket Navigator also helped us to discover whether or not Paice LLC was experienced with patent litigation and the top technologies involved in Paice LLC’s patent cases.

Litigation case experience. Source: Docket Navigator
Technology split. Source: Docket Navigator

From the pie chart, we can see that the split between the patent classifications is almost identical.

What is interesting about the Docket Navigator data is that while searching for the original case, we stumbled upon three subsequent IPR cases involving Paice LLC and BMW:

IPR2020-01386 (PTAB)

PR2020-01299 (PTAB)

IPR2020-00994 (PTAB)

Is BMW trying to invalidate the patents it was originally being sued for? It certainly looks like it.

What do we know about Paice LLC?

Paice LLC is considered to be one of the earliest leaders in electric vehicles and was granted its very first hybrid vehicle patent back in 1994, this was way before most of the other automakers started to seriously focus their attention on figuring out ways to enhance and improve fuel efficiency while reducing emissions. Paice’s technology proved valuable and helped accelerate the growth of the hybrid vehicle industry.

Paice LLC has licensed its hybrid vehicle technology portfolio to some of the most important automakers from across the globe, including:

  • Toyota
  • Ford
  • Hyundai/Kia
  • Honda
  • GM

Together, these automakers make up more than 80% of all hybrid vehicle sales in the United States.

Paice LLC’s deal history. Source: PitchBook

Patent troll activity in the automotive industry

Some may consider Paice LLC to be a patent troll, some may not. However, Paice LLC is an NPE.

Patent trolls have been a constant source of irritation for technology companies since the 1990s, and the automotive industry is just another target. Between 2010/01/01 and 2020/01/01, there have been 779 Campaigns and 1,634 Litigations in the automotive industry.

According to a report by Automotive World, the bulk of patent litigations over the last 15 years have involved patent troll cases. The automotive industry has seen patent trolls rapidly attempting to exploit the many high-technology aspects of cars. Some of these patent trolls hold just one patent, whereas some notorious patent trolls, hold many.

There’s no doubt that the patent trolls will continue to seek out and use older patents that car companies have abandoned and try to spin the claims to cover newer technologies or try to assert patents that have broad claims that may seem unrelated to cars and dispute that they actually cover car technology.

The accelerated adoption of new technologies by the automotive industry will increase the focus on exploiting and protecting intellectual property, and the patent litigation landscape is likely to grow proportionately. By preparing in advance, carmakers can potentially minimize the effect of such lawsuits on the development and production of future vehicles.

The case, the technology, and the patents involved

Paice claims that it disclosed information about its hybrid engine technology with BMW in the early 2000s. These discussions finished, and BMW strived to team up with General Motors and DaimlerChrysler to produce a hybrid engine. Still, those discussions ended when it was decided the technology was too costly. The next year, BMW released its first attempt at a hybrid electric vehicle but then decided to take it off the market.

BMW went on to release hybrid vehicles over the next few years, allegedly using Paice LLC’s patented technology—without a license. Paice claims that BMW took advantage of the licensing discussions to obtain access to documents and knowledge from its engineers to develop its own hybrid vehicles.

“Paice shared intimate details of our hybrid vehicle technology with BMW in good faith. Rather than negotiate a license for our technology, BMW took what it learned from Paice and used it for its own gain.”

– Robert Oswald, CEO of Paice LLC

Eight BMW hybrid and plug-in hybrid vehicles were involved in this patent infringement case, including the 330e iPerformance, 530e iPerformance, 750e xDrive iPerformance, i8 Roadster Plug-in, and Mini Countryman Plug-in.

Let’s take a look at the two types of hybrid vehicle technology at the center of this legal dispute — hybrid and plug-in hybrid.


Hybrid electric vehicles are powered by both an internal combustion engine and an electric motor that works by utilizing energy stored in batteries. Unlike the plug-in hybrid electric vehicles, a hybrid electric vehicle is incapable of being plugged in when the battery requires charging. Rather, the battery is charged via regenerative braking and by the internal combustion engine. The additional power afforded by the electric motor has the potential of allowing a smaller engine. Additionally, the battery can also power auxiliary loads and reduce engine idling when stopped. Collectively, these features enable increased fuel economy without losing performance.

The key components of a hybrid electric vehicle. Source: U.S. Department of Energy

Plug-in hybrid

Plug-in hybrid electric vehicles usually use batteries that power an electric motor and utilize fuel, such as gas, to power an internal combustion engine. The batteries that plug-in hybrids use may be charged by either a wall outlet or charging station, via the internal combustion engine, or by regenerative braking. The plug-in hybrid electric vehicle typically runs on electric power until the battery is drained, then the car will change over to use the internal combustion engine automatically.

The key components of a plug-in hybrid electric vehicle. Source: U.S. Department of Energy

The patents involved in the case are as follows:

To view the patents with Patent Search by Patentcloud, simply click on the patent numbers and sign up for free.

Quality Insights overview and expert opinions

For the purpose of this article, we took one of the patents involved in this case and ran it through Quality Insights, the one-click solution for patent validity analysis. We chose US8630761 (‘761) as this patent might be easier to challenge as it has only been challenged once before. US’347 and US’634 have been challenged by others since 2014. There are 9 IPR cases related to US’347 and 27 IPR cases related to US’634, this could indicate that they are not easy to invalidate.

To view the Quality Insights reports of all three of the patents involved in this case for free, simply fill out your email address at the end of this article.

To demonstrate just how much information you can extract from Quality Insights in a matter of moments, we used the Overview tab for our preliminary investigation. Quality Insights helped us to examine the patent’s file wrapper data and instantly enabled us to establish the following:

  • All notable events that have occurred from the application date to the expiry date of the patent.
  • All related documents and the dates that these documents were issued, e.g. non-final rejections, applicant arguments, remarks, and amendments. The documents are displayed as the original office action (OA) and as a searchable document, allowing the user to optimize their valuable time.
  • The prior art cited by the examiner and the legal basis of each challenge, e.g. § 102 and § 102.

The fact that the patent was only rejected once in its history could potentially indicate that the patent’s quality could be good.

The event history in the overview tab. Source: Quality Insights

The family status shows us that there are 20 family members of the patent at issue, you can click on the family members to check their geographical distribution and legal status. The main purpose of this tab is to check the status of the other patents in the family. This is important because, in the case of abandoned patents in the same family, we can check the references used to invalidate those family members and see if they can be used to invalidate the patent at issue as well.

We can see that all of the family members are either abandoned or lapsed. With this legal status information, you can conduct a deeper analysis to find out why these family counterparts were abandoned. When viewing the family members, we can see  7,104,347 and 7,237,634 (the other two patents involved in the case).

Quality Insights displays key information that could be used to potentially invalidate a patent, information that would traditionally take hours, or even days to locate.

The family status in the overview tab. Source: Quality Insights

The prior art status indicates that Quality Insights has picked up 767 potential prior art references and 205 instances of non-patent literature (publications and scientific papers etc.) Both of which could be used to potentially invalidate the patent.

The prior art status. Source: Quality Insights

We asked Eugene Lu, an analyst at WISPRO Technology Consulting Corporation, for his expert analysis and opinion on the findings from Quality Insights and the validity of the patent.

“Using Quality Insights to observe the prosecution history of US’672, few rejections were realized. However, I would say that these rejections are not harmful since the application was granted without substantial limitation. The Quality of US’672 looks pretty good, but it doesn’t mean that BMW should lose hope. BMW still has a chance to win.”

Double Patenting

With US6209672 (US’672), the examiner asserted that the US’761 patent has the problem of double patenting. In fact, US’761 patent is a CIP application (continuation-in-part) of the US’672 patent. Related problems are also resolved through the Terminal Disclaimer.

102 Rejections of independent claims (and some dependent claims)

With US5343970 (US’970), US’761 was rejected according to 102(b). Using the File Wrapper Search function of Quality Insights, it can be grasped that, in fact, the technical features proposed in US’761 have not been anticipated by US’970. So after the amendment of the claims, the patent application was approved. It is believed that the granted claims were actually the scope expected by the applicants. This OA process does not limit what they really want at all.

103 Rejections of some dependent claims

These rejections are with the assertion of anticipation of US’970. So these rejections were solved with the 102 rejections.

Using Patent Search and Quality Insights to speculate the reasoning of BMW’s action:

Considering that Paice is the pioneer of this hybrid powertrain technology and that Paice has licensed to many big EV players, it looks like it would not be so easy to win. However, it is definitely worth fighting in front of the license agreement. What might BMW think? According to Patentcloud’s Patent Search and Quality Insights, we think BMW believes that it is not infringing and is questioning the patentability of the US’761 to develop its strategy.

BMW may not infringe

Although Paice has successfully licensed to many hybrid electric vehicle manufacturers, it is worth considering why the assertion to BMW was so late? In addition, the patent portfolio filed against BWM this time includes the following three patents:

According to Patent Search, US’347 patent and US’634 have been asserted to most of the companies that have settled. However, this is the first time that US’761 has been used to file a complaint. This may mean that this time Paice did not have confidence in the US’347 and US’634 which have made great achievements. Instead, Paice may think the US’761 patent is relatively close to the technology used by BWM.

It’s possible that US’761 will be invalidated

As discussed earlier, US’761 is actually a CIP application of the US’672. In other words, the US’761 proposes some New Matters relative to the US’672. However, this time Paice claimed US’761 but not US’672, which implied that Paicer thinks that BMW’s products are only related to these New Matters. However, the filing date of the two cases differed by more than ten years. During these ten years, the New Matter proposed by the US’761 had a high chance of being disclosed by others.

For example, using the Prior Art Finder in Quality Insights, and Second Degree Prior Art, we found that the US’672 patent was once used as the 103 previous prior art of the US20040060751 (US’751) application.

Prior art finder. Source: Quality Insights

For a legal perspective on the case, we consulted with attorney-at-law, Tony Tu, of Wispro Technology Consulting Corporation for his opinion on Paice LLC’s activity and the predicted outcome of the Paice LLC v. BMW case.

“BMW is not the only car manufacturer to be sued by Paice. Paice has been taking action against other car manufacturers since 2004. Paice, an NPE, has previously filed similar lawsuits against Ford, General Motors, Honda, Hyundai, Kia, Toyota, and Volkswagen Group. Such litigations seem to have had Paice’s desired effect.

Paice’s record of granting licenses to other companies in the automotive industry may indicate that a settlement with BMW is the most likely outcome, but there’s also a broader trend at play. When an increasing number of large manufacturers announce that they are paying more attention to pure electric vehicles, hybrid technology seems to be declining in the automotive field.

Both General Motors and Volkswagen Group have disclosed that they are concentrating their investment on fully electric cars, viewing hybrids as only a bridge to meeting tougher tailpipe-emissions requirements, particularly in China and Europe.”

Free Quality Insights reports for the patents involved

Take a look at the Quality Insights reports for the three patents involved in this case for free. To view the reports, simply submit your email address here.

You can also examine Quality Insights reports for other patents by signing up for our free trial.

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