The owners of the intellectual property of Better Place, a defunct Israeli start-up that innovated in the late 2000s and early 2010s in electric-vehicle battery-swap systems, filed a lawsuit against a $16 billion Chinese EV maker for intellectual property infringement, The Financial Times reported on Thursday night.

The warning letter, which The Jerusalem Post verified, claims that Chinese automaker Nio has been using Better Place's intellectual property to establish its electric vehicle systems in Europe.

“The opposition period has expired; no oppositions were filed. The patent is in force,” read the warning letter sent to Nio.

“The entire EV industry knows that Better Place pioneered and registered the foundational patents for battery swap even before Nio was incorporated,” Yosef Abramowitz, an officer of Charge Peak, which owns the Better Place IP portfolio, said..

According to the FT, Nio denied the patent infringement allegations, saying that it had filed more than 2,200 patents related to battery charging and swapping, which are “materially different from the three patents referenced in the claim.”

The letter offered Nio the opportunity to buy the IP portfolio from Charge Peak, with the minimum acceptable offer being 2 percent of Nio’s global revenue for 2025.

“Israeli EV know-how was unfairly exploited to build a $16 billion company, so asking for 2% of Nio’s 2025 revenues is not unreasonable,” Abramowitz said. “We are ready to negotiate in good faith for the acquisition of the entire portfolio.” 

“The European Union, especially in Germany, provides exceptional protections for foundational IP that we couldn’t get in China,” he added. “Nio’s expansion plans in Europe are driving its share price and so it’s time to make a deal.”

According to the warning letter, Nio currently has at least 20 battery-swap stations in Germany (where the Better Place patents were originally published), 60 in Europe covered by European Union patent protections, and over 3,700 in China.

With a reported annual revenue of $12.5 billion, the 2% compensation would amount to $250 million.  Charge Peak expects to resolve the situation by World Environment Day on June 5 of this year.