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The Dukovany nuclear power plant in Kraj Vysočina, the Czech Republic. (courtesy of KHNP)

The US nuclear power company Westinghouse filed an appeal with the Czech anti-monopoly watchdog over alleged violations of its intellectual property rights in Korea’s bid to construct two nuclear reactors in the Czech Republic.

The company’s move comes on the heels of a lawsuit it filed in the US. Observers are watching closely to see if the situation can be resolved before the main contract is signed next March.

In its appeal to the Czech Office for the Protection of Competition on Monday, Westinghouse asserted that it holds intellectual property rights on the source technology for the APR1000 reactor that Korea Hydro & Nuclear Power (KHNP) is attempting to build in the Czech Republic, and that this technology cannot be transferred to a third party without its permission.

According to reports, the CEZ energy group running the tender subsequently stated that Westinghouse was not eligible to object as a losing bidder. But the company appears likely to continue asserting its intellectual property rights, with a legal case already underway in the US.

Since October 2022, Westinghouse has been waging a legal battle in the US, arguing that KHNP’s nuclear power exports should be subject to US export control regulations.

According to the guidelines of the Nuclear Suppliers Group formed in 1978, KHNP must receive US government approval to export nuclear power plant technology. Westinghouse is responsible for reporting as the party that transferred technology to KHNP — but that reporting has not yet taken place.

Korea’s APR1000 and APR1400 reactors are based on Generation II System 80 technology licensed by Westinghouse.

At the time of the 2009 order for the Barakah nuclear energy plant in the United Arab Emirates — Korea’s only previous nuclear power plant export — an agreement was reached where KHNP would pay Westinghouse a technology consulting fee while assigning it orders for turbines and other key equipment.

But in the case of the Czech nuclear power plant order, KHNP and Westinghouse did not reach any technology transfer agreement. This explains the claims by some in the Korean nuclear power industry who are arguing that Westinghouse is angling for more beneficial royalty conditions in the order process while keeping the Korean nuclear power industry in check.

The problem is that a failure to resolve the dispute could end up causing problems in the final bidding negotiations.

In late April 2023, the South Korean and US heads of state issued a joint statement that included an agreement on “mutually respecting each other’s [. . .] intellectual property rights” in the area of nuclear power. Analysts have suggested that this may have reflected Westinghouse’s aims at the time of blocking KHNP’s exportation of nuclear power plants to Poland.

In June 2023, Westinghouse representatives visited South Korea to hold intellectual property rights discussions with KHNP. According to reports, they were unable to reach agreement after KHNP declined to meet demands from Westinghouse that included royalty payments and cooperation under a format of subcontracting portions of the plant construction.

Energy Transition Forum Korea expert committee member Seok Kwang-hoon warned, “If KHNP ends up not being able to resolve the intellectual property rights risk, the Czech government is not likely to approve nuclear power plant construction by Korea when that process could end up being suspended.”

Lee Jeong-yun, the president of the organization Nuclear Power Safety and the Future, stressed, “There needs to be a thorough investigation of the procedural issues raised by [KHNP] entering a bidding war without first resolving an intellectual property rights dispute that began several years ago.”

By Ock Kee-won, staff reporter

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