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Baltimore-based tech firm and Abell Foundation file lawsuit against Volvo over hybrid engine technology

Baltimore-based technology firm Paice LLC and the Abell Foundation have filed a patent infringement lawsuit against Volvo over the automaker’s use of hybrid engine technology.

Paice, a pioneer in hybrid engine systems that grew out of a University of Maryland incubator, licenses technology used in most gasoline-electric hybrid vehicles on U.S. roads, including the Toyota Prius, Honda Insight and Ford Fusion Energi. Besides Toyota, Honda and Ford, hybrid vehicle makers Hyundai/Kia, Daimler, Mitsubishi and others pay to use Paice technology.

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The Abell Foundation, a charitable organization that co-owns the firm’s U.S. patents, has invested millions of dollars over more than two decades to support Paice’s efforts to develop and protect its hybrid technology. Paice also owns foreign patents.

The plaintiffs accuse the Swedish automaker of selling hybrid vehicles in the U.S. without compensating Paice and Abell for their patented hybrid technology.

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“As more and more automakers have licensed Paice and Abell’s patents over the last decade, Volvo now finds itself as one of the last few holdouts, continuing to sell hybrid vehicles that violate Plaintiffs’ patent rights,” says the lawsuit, filed Wednesday in federal court in Baltimore.

Paice and Abell said they tried for more than a year to discuss licensing with Volvo and made the automaker a licensing offer. But Volvo refused to negotiate unless the Baltimore firms first disclosed the license fees paid by Volvo’s competitors, the lawsuit said. Those licensing agreements are subject to strict confidentiality terms, the lawsuit said.

Representatives of Volvo did not respond Monday to a request for comment on the lawsuit other than to say Volvo Car USA, named in the lawsuit, is closed through Jan. 3 for the Christmas and New Year holidays.

The inventor and the charitable organization filed the lawsuit as a last resort, said Frances Keenan, a senior vice president of Abell and executive chair of Paice.

“We had hoped we would not have to file a lawsuit against Volvo,” Keenan said Monday. “But it became clear it was necessary for us to file the lawsuit.”

Many automakers that now license Paice’s technology spent years scrutinizing its patents or working closely with Paice’s engineers to learn about the technology, the lawsuit says. Paice was forced to file lawsuits against most of them, including against BMW of North America in November 2019..

But others, including Honda, Daimler and Mitsubishi, agreed to license the technology without litigation. Paice reached agreements with Mitsubishi in August and with Daimler in May.

The lawsuit against Volvo says the automaker has refused to provide a counteroffer “on the basis that Paice and Abell had not shared its confidential licenses with Volvo — something that Volvo knows Paice and Abell are incapable of doing.”

The plaintiffs are seeking damages of an unspecified amount.

Sales of hybrid vehicles, which combine the use of an internal combustion engine and one or more electric motors to improve fuel efficiency, have grown as the selection of vehicles has increased and prices have become more competitive.

Paice was started in 1992 by Alexander Severinsky, a Russian native who built a prototype hybrid-powered car and entered into discussions with major automakers but was turned away. Severinsky, an electrical engineer, started the company at the University of Maryland’s small-company incubator program and was awarded a hybrid vehicle patent in 1994. He came up with the idea to make cars more fuel-efficient in 1979, a year after moving to the United States, while waiting in long gas lines.

Abell, which invests in local companies focused on environmental issues, has backed Paice since 1998. Severinsky and Paice have secured 30 hybrid vehicle patents worldwide.

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Abell does not disclose its revenue from the Paice patents, but Keenan has called the licenses “very meaningful to the foundation,” allowing it to give away more money.

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