An official from the China Battery Industry Association, who refused to be named, yesterday said the Chinese companies involved have formed an alliance and submitted their reply to the US International Trade Commission in Washington DC two weeks ago.

On May 28, the commission accepted a complaint filed by the US company Energizer Holdings Inc and the Eveready Battery Co, its sister firm. The commission then started to investigate whether to ban imports of certain batteries for patent infringements.

The complaint covers certain zero-mercury-added alkaline batteries as well as the zinc powder used to make those batteries, as well as certain toys, games and other products containing the batteries.

Seven Chinese companies are named in the charge - the Fujian Nanping Nanfu Battery Co Ltd, Zhongyin (Ningbo) Battery Co Ltd, Ningbo Baowang Battery Co Ltd, Guangzhou Tiger Head Battery Group Co Ltd, Sichuan Changhong Electric Co Ltd, Zhejiang 3-Turn Battery Co Ltd and Guangdong Chaoan Zhenglong Enterprise Co Ltd.

The official said that, in addition to those seven companies, another seven battery manufacturers also took part in formulating the response.

Otherwise, those other seven companies would automatically suffer from any import ban imposed by the United States.

"It is unfair for Chinese companies as most of them have paid for the relevant technologies," said the official.

The official said the local companies had paid a lot to buy the appropriate equipment and he argued that such payments should have contained any patent fees.

"The US companies are trying to keep out competitive Chinese goods, since these are eroding US manufacturers' profits," he said.

He said the proposed block on imports into the United States of zero-mercury-added alkaline batteries, which causes less damage to the environment, will have a devastating impact on China's battery industry.

According to Section 337 of the United States' 1930 Tariff Act, all goods are banned from being shipped to the United States if those goods are ruled as violating US patent rights.

China is the world's largest manufacturer and exporter of the type of battery involved, with 75 percent of Chinese output of the battery being exported.

Last year, China produced 3.5 billion alkaline batteries, almost all of which were for export.

Insiders said Chinese batteries usually cost between a 10th and a third less than US-made ones, making them very popular in overseas markets.

The case will now go to an International Trade Commission administrative judge, who will make an initial decision on whether Energizer's patent has been infringed.

If the judge rules in Energizer's favor, the case will go to the commission for a final review.

The trade panel has not set a target date for making a final decision. It has 45 days in which to announce that date.

Energizer and Eveready have asked the commission to ban imports of the batteries and to issue a cease and desist order to their competitors.

If the commission takes either of those steps, US President George W. Bush would have 60 days to override the action if he decides that this would be in the public interest.

A spokesman from the Fujian-based Nanping Nanfu Battery Co Ltd, China's largest battery maker, predicted that the Chinese companies would win the case.

"This is just one of the twists and turns in the development of China's battery industry," he said.

Energizer said it was not targeting the Chinese battery industry through its legal action.

Its complaint lists 28 respondents, including Japan's FDK Corp, Singapore's GP Batteries International, and the United States-based Maxell Corp, which is owned by Hitachi.

(China Daily July 10, 2003)