Context: Chinese automaker BYD, which went from tiny numbers to mid-seven-figure annual sales volumes in only a few years, has yet to license cellular standard-essential patents (SEPs). It is being sued in the Unified Patent Court (UPC) and German national courts by Sol IP (May 30, 2025 ip fray article) and IP Bridge (April 2, 2025 ip fray article). It is possible that other cases are pending but have not become discoverably yet.
What’s new: Brazilian automotive website CPG (Click Petróleo e Gas) discusses a preliminary injunction (PI) that the Justiça do Rio de Janeiro (Rio de Janeiro Judiciary) granted IP Bridge against BYD over a 4G SEP. The non-compliance fine amounts to R$20K (approximately US$3.5K), initially capped at R$600K (approximately US$107K).
Direct impact: According to the same report, BYD denied knowledge last month and just said it would take the appropriate measures to protect its rights. Given what happened in other Brazilian PI cases, it is unlikely that BYD would stop selling its products. Typically, companies appeal and make temporary payments. However, the court requested a compliance report, and by refusing to comply, BYD incurs the risk of a severe penalty at the end of the proceedings.
Wider ramifications: As the report also notes, about 85% of the cars sold in Brazil with the same type of connectivity are licensed. That fact will complicate any FRAND (fair, reasonable and non-discriminatory licensing) defense by BYD in the further Brazilian proceedings. At this point, Tesla (July 2, 2025 ip fray article) and BYD are the only car makers to pursue litigation over cellular SEPs rather than licensing. It would be an overstatement to say that two are a minority. Two are still outliers while most of the market is apparently satisfied with the status quo (which does not mean that companies wouldn’t always be looking for ways to reduce costs of whatever kind, such as through joint purchasing (July 9, 2025 ip fray article).
Past automotive SEP lawsuits were brought in Germany, the UPC, and sometimes also in U.S. district court. Tesla filed its FRAND action in the UK, and now the first non-German SEP injunction agianst a car maker has come down in the form of IP Bridge’s Brazilian win.
BYD is in a hamster wheel. It must keep growing at a fast pace, but has recently experienced some degree of saturation in its home market, China. It is increasingly reliant on markets like Europe and Latin America. And in those markets, it now risks being enjoined, which could have a major disruptive impact (not today or tomorrow, but in the not too distant future).