China leads the world in both steel production and sales. With an impressive annual output of approximately 1 billion tons, China accounts for nearly half of the global steel production. Following China, India ranks second with around 100 million tons produced annually. Japan and the United States each produce between 70 to 80 million tons, while the European Union's total production is under 150 million tons.

As of 2020, among the top 50 steel companies globally, 27 are based in China, with six of the top ten also being Chinese firms. Baowu Steel holds the top position, producing nearly double the amount of its closest competitor, India's ArcelorMittal. Other notable companies include Nippon Steel in fourth place, South Korea's POSCO in seventh, and Germany's Thyssenkrupp at 43rd. Recently, these leading steel companies have found themselves embroiled in patent disputes in China.

ArcelorMittal vs. Thyssenkrupp and Nippon v. Baoshan

On February 18, 2024, the National Intellectual Property Administration announced that ArcelorMittal had initiated a challenge against a Chinese patent (ZL201710983910.X) held by Thyssenkrupp Steel Europe AG, which pertains to a "Method for Producing Coated Steel Components." An oral hearing is set for February 29, 2024. Additionally, a Chinese patent (ZL201280016850.X) owned by Nippon Steel, which covers "High-Strength Components with Excellent Corrosion Resistance After Coating and Their Manufacturing Method," is facing invalidation challenges from both Baoshan Iron & Steel Co., Ltd. and POSCO.

This situation marks the beginning of a significant global patent disputes among steel industry leaders in China. While the reasons behind Nippon Steel's lawsuit against Baoshan Iron & Steel are well-known, the details surrounding the other patent disputes involving Germany, India, Japan, and South Korea have not yet been disclosed.

Nippon v. Toyota Motor & Baoshan

On October 14, 2021, Nippon Steel announced it had filed a patent infringement lawsuit against Toyota Motor Corporation and Baoshan Iron & Steel Co., Ltd. in the Tokyo District Court, alleging infringement of its patent for non-oriented electrical steel sheets used in electric vehicles. Nippon Steel is seeking 20 billion yen (approximately $176 million) in damages and has requested a preliminary injunction to halt the production and sale of the allegedly infringing electric vehicles. The company decided to pursue legal action after unsuccessful negotiations with both defendants. 

After nearly a year, Baoshan Iron & Steel confirmed on August 17, 2022, that it had received three lawsuits from Nippon Steel, with the total compensation claim amounting to 20.42964 billion yen, equivalent to approximately 3 billion yuan.

On November 2, 2023, Nippon Steel issued a statement regarding the patent lawsuit for non-oriented electrical steel sheets, announcing the termination of its lawsuits against two Japanese defendants—Toyota Motor Corporation and Mitsui & Co.—while continuing its litigation against Baoshan Iron & Steel in China to protect its intellectual property rights.

Some experts speculate that Nippon Steel's decision to file patent lawsuits against Baoshan Iron & Steel in Japan rather than in China may be due to the relevant technology not being patented in China. However, Baoshan Iron & Steel's recent invalidation request against Nippon Steel's patent suggests that Nippon Steel may also be pursuing rights protection in China.

Interestingly, South Korea's POSCO has also challenged the same patent held by Nippon Steel, indicating that Nippon Steel may be leveraging this patent to assert its rights against both Baoshan Iron & Steel and POSCO.

ArcelorMittal v. Thyssenkrupp

In another development, ArcelorMittal's challenge against Thyssenkrupp Steel Europe AG's patent marks the first public disclosure of a patent dispute between these two companies, although the specific reasons for the challenge remain unclear.

This is not the first instance of Thyssenkrupp Steel Europe's patents facing challenges in China. Several of its patents have previously been subjected to invalidation requests, with unfavorable outcomes for Thyssenkrupp. For instance, three invalidation decisions made at the end of last year declared all of Thyssenkrupp Steel Europe's patents invalid. However, as the invalidation requester was an individual employing a "strawman strategy," it remains uncertain whether there is a direct link to ArcelorMittal from India.