Abell Foundation and Paice settle patent case with Volkswagen

A Baltimore-based inventor of hybrid engine technology and the Abell Foundation, which invested in the company, have settled a patent infringement case against Volkswagen AG, which also owns Audi and Porsche.

Paice LLC and Abell filed a complaint against the automakers in April with the U.S. International Trade Commission. The complaint alleged that the automaker imported and sold vehicles that used Paice's hybrid vehicle patents.


Terms of the settlement, which Paice and Abell announced this week, are confidential. A hearing before the trade commission had been scheduled for this month.

Frances Keenan, executive chair for Paice and Abell's senior vice president, said Friday the "confidential global settlement" was reached in December, ending the dispute. Keenan said she could not comment further.

A spokesman for Volkswagen did not respond to a request for comment Friday.

In the complaint, Paice said it spent more than two years around 2001 teaching its patented hybrid technology to Volkswagen and offering its computing modeling and algorithms. Paice had warned the German company that it was not meeting U.S. environmental regulations and would face penalties without Paice's technology. The complaint said Volkswagen had "been skeptical" about the commercial viability of hybrid vehicles before working with Paice.

"After learning everything it needed from Paice, VW abruptly ended their collaboration," the complaint said.

It accused Volkswagen of taking the technology for itself without compensating Paice.

The settlement follows years of similar litigation against other automakers.

In October 2015, Paice and Abell won a $28.9 million jury award in a patent infringement case against Hyundai Motor Co. and affiliate Kia after Paice accused the Korean automakers of using Paice designs in the Hyundai Sonata Hybrid and the Kia Optima Hybrid. In December 2015, Hyundai and Kia agreed to license all of Paice's hybrid technology.

Toyota had settled a Paice lawsuit over technology used in the Prius by agreeing to license the technology in 2010.

Paice sued Ford for patent infringement in 2014, even though Ford signed a limited license that applies to Paice's first patent in 2010. Ford has obtained a stay of that suit, pending a review of issues the automaker raised by the federal Patent Trial and Appeal Board.

Abell, known for initiatives in education, health care and human services to help the underprivileged, also promotes social goals such as increasing energy efficiency and invests in local companies. The charitable organization has invested millions of dollars over 17 years to support Paice's efforts to develop hybrid technology.

Paice, founded in 1992 by Russian native Alexander Severinsky, had built a prototype hybrid-powered car and entered into discussions with major automakers but was turned away.

An electrical engineer, Severinsky 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.

Paice has been awarded a total of 29 U.S. and foreign patents having to do with improving hybrid vehicle performance, fuel economy and emissions efficiency. Abell co-owns the patents.