Chinese rivals battle in US court as solar patent war hits Tesla rumor

An unusual situation has unfolded in which Chinese companies are facing off in a U.S. court over the U.S. solar market. One of China’s two major solar equipment makers has filed a patent infringement lawsuit against a rival. As China’s solar industry slows and equipment makers turn to overseas markets, competition in the U.S. market appears to have elevated patents into a new flashpoint.

On the 30th, according to China’s business outlet Jiemian, Linton Crystal Technology, the U.S. subsidiary of Liancheng CNC (连城数控), a maker of solar-grade silicon material manufacturing equipment such as monocrystalline furnaces, filed a patent infringement suit on the 23rd in the U.S. District Court for the Eastern District of Texas against rival Jingsheng Mechatronics (晶盛机电). Jiemian said, “This is the first time Chinese solar equipment makers have waged a patent battle in the United States.”

What Linton took issue with is certain solar-grade silicon production equipment (monocrystalline furnaces) that Jingsheng Mechatronics sold in the United States. Linton argued that Jingsheng Mechatronics’ equipment infringed two of its U.S. patents. Linton is said to have asked the court to confirm infringement, award damages equivalent to patent royalties, and bar future sales of related products in the United States.

Jingsheng Mechatronics denies any infringement. In a disclosure on the 24th, the company said the technology applied to its products and the patented technology are “completely different,” adding that “there is no evidence the products infringed the patents.” The company said it would respond proactively through its legal and intellectual property team and an external advisory group as soon as it receives the complaint.

What draws attention in this case is that both the plaintiff and the defendant are rival Chinese solar equipment makers. Linton’s parent Liancheng CNC is a producer of solar and semiconductor equipment listed on the Beijing Stock Exchange. It acquired a U.S. business unit in 2013, secured local technology and a business base, and has continued its U.S. operations.

The defendant Jingsheng Mechatronics, a rival of Liancheng CNC, was founded in 2006 and is listed on the Shenzhen Stock Exchange. Jiemian said, “The two companies’ product lines overlap considerably, and both center on monocrystalline furnaces.” However, Jingsheng Mechatronics’ results are far ahead. It has long maintained a market share of more than 60% in the global monocrystalline furnace market for solar and its revenue is five times that of Liancheng CNC.

Analysts say the backdrop to the two companies clashing over patents in the United States is Chinese solar equipment makers’ expansion into overseas markets. As oversupply and price competition persist in China’s solar industry, equipment makers are seeking new orders abroad, including in the United States. In particular, as solar manufacturing facilities expand in the United States, competition is intensifying to supply equipment such as monocrystalline furnaces for local production lines.

The industry also noted the possibility that the lawsuit is tied to order competition in the U.S. market. Citing an industry source, Jiemian said, “The lawsuit was filed as Jingsheng Mechatronics was delivering monocrystalline furnaces worth 3 billion yuan (about 606.6 billion won) to Tesla’s solar factory in Texas,” adding, “Competitive considerations are likely reflected in this filing.”

It added, “According to prior cases, if the court issues an injunction against Jingsheng Mechatronics, Tesla’s Texas solar plant could be directly affected,” and “The outcome of the suit between the two companies will determine who holds the upper hand in the U.S. market going forward.” However, because neither Tesla nor Jingsheng Mechatronics has officially disclosed whether the order exists, it is hard to conclude there is a direct link to the lawsuit.

The Marshall Division of the U.S. District Court for the Eastern District of Texas, where the case was filed, is known as the court with the most patent suits in the United States in 2023–2024. Linton filed a total of seven claims, including a request to determine whether infringement occurred. These include a permanent injunction to stop Jingsheng Mechatronics from selling the disputed equipment, suggesting the case may take a long time to conclude.